Tuesday, April 24, 2007
Research ICT Africa (RIA!) has published their 2006 South Africa Telecommunications Sector Performance Review. The tone of the fourth edition is worrying. The authors urge for measures that prevent South Africa from further lagging behind its natural competitors in terms of access to services, cost of usage and competitiveness.

The telecommunications sector in South Africa is not doing well. This is the clear message that speaks from the 2006 South Africa Telecommunications Sector Performance Review 2006 by RIA!. Once South Africa had the leading and trendsetting telecommunications sector on the Africa continent, now this position is slowly being challenged by other countries. Morocco already has more fixed broadband connectivity than South Africa and the Tunisia mobile market is now the fastest growing in Africa, besides the island states.
The fourth edition of the South African ICT and Telecommunications Sector Performance Review (SPR) seeks to measure and assess some of these market developments against national policy objectives such as access to services, cost of usage and competitiveness. It is not a conventional market analysis. These tend to be concerned with overall growth or growth of different market segments and the profitability of companies. This study is concerned with such data only as indicators of delivery on national objectives. So, for example, while the overall ICT sector in South Africa has continued to grow significantly in the last year, this review considers how this relates to improvement in penetration rates and costs of telecommunications to consumers and users and as a major business input, and to the introduction of new services for effective participation in the global economy.
The review is divided into eight chapters which take the reader from global policy and regulatory trends, through a detailed analysis of the sector in South Africa, to conclusions and recommendations to improve the sector performance.
The telecommunications sector is dominated by rapid technological and economical changes. Convergence of technologies has a revolutionising impact on the costs, scale and scope of service provision. Internet Protocol (IP) based technologies are able to offer new, innovating and low-cost services to the customers. This happens at a global level, and also affects the South African ICT and telecommunication sector. However, as observed by the authors of the SPR, the South African 'managed liberalisation' process has created a market that has only been opened up incrementally, with few opportunities to see the benefits of lower prices, service and billing innovation, and choice of services associated with open markets in other parts of the world.
The impact of this market structure on the development of the South African telecommunications sector is assessed in terms of penetration and pricing. While fixed-line growth is negligible, the growth of data services, particularly through the introduction of ADSL (Asynchronous Digital Subscriber Line), has been significant, despite the high costs associated with these services. Although these costs have come down in recent periods, they continue to be far above other lower to middle income countries and even developing countries such as Morocco. The mobile market grows astronomically, with subscriber numbers over 30 million. At the same time, interconnection and facilities leasing continue to be significant bottlenecks in the introduction of a fair competitive market and major contributors to the high input costs of telecommunications in business. On top of that, the exclusivity Telkom has over the SAT-3 landing station is making international bandwidth cost considerably more than its real cost. Although positive developments are taking place in the last year, serious regulatory action needs to be taken to improve the penetration and costs of telecommunication services in South Africa.
The report provides a wealth of information for who wants to understand the South African telecommunications sector. The sources of the information are well documented and presented with a large number of illustrative tables and figures. Market structure, access to ICT and pricing of different services and providers are covered in detail. However, the lack of a proper definition of the ICT and Telecommunications sectors can easily create confusion. Software and hardware industry, although important driving forces for innovation in the telecommunication sector, are not covered in the report.
In spite of the fact that the conclusions and recommendations in the last chapter mostly address the challenges for the sector in South Africa, they also provide important lessons for policy makers and regulators in other African countries. Many governments are in the process of implementing new policies and regulatory frameworks. In doing so they should learn from the events in South Africa and avoid similar pitfalls.

The development of the East African Submarine Cable System (EASSy) has gradually transformed into a powerplay of an increasing number of stakeholders. The Association of Progressive Communications (APC) has published an analysis of the stakeholders, their power and interest positions and sheds renewed clarity in the complex EASSy discussion.

The establishment of the East African Submarine Cable System, popularly known as EASSy, is important for the further socio-economic development of the eastern part of Africa. The project started approximately four years ago.
EASSy is the proposed US$300 million1, 9,900km fibre optic submarine cable that will connect the east coast of Africa to the world's network of international high capacity submarine cables. Mtunzini (located just north of Durban) in South Africa will host one end of EASSy, and Port Sudan in Sudan the other end. In between, EASSy will have landing points in seven other countries.
This project would greatly increase the accessibility of the connected countries to high speed, high bandwidth connectivity, as well as enable the development of new products and services that would otherwise have not been possible due to bandwidth restrictions. Through the development of back-haul transmission networks, EASSy will be able to improve the connectivity between African countries and reduce the cost of communication within and between them and expand the possibility of intra-Africa trade.
In spite of the high urgency of EASSy, the progress of the project has been slow in coming. In the paper A Stakeholder Analysis of the of the East African Submarine Cable System the APC Policy researcher for the African region, Abiodun Jagun, analises the reasons behind this slow progress. According to the paper the key to the delays is the uncertainty around the ownership and management of the cable, which in turn influence the terms and conditions that will govern access to its capacity by non-members (i.e. entities that do not hold shares in the cable). The ownership of EASSy was initially conceived under a Closed Consortium Ownership, similar to the SAT3/WASC submarine fibre optic cable. Disappointing performance of SAT3/WASC in terms of improved and low-cost broadband internet access has prompted interest groups to urge for the adoption an Open Access model for EASSy.
With the start of the discussion on the modalities of the Open Access model and its operational hybrid variants, the complexity has grown. The new players and the new stakes have created an impasse. Through an analysis of the stakeholders the paper tries to create clarity in understanding and navigating the current state of play and developing scenarios of the future of the project
The author has decided to apply Power-Interest matrices as a tool for analysis to better understand the position of 15 identified stakeholders in the decision making process. The paper first analises individual stakeholders and continues to look at the coalitions that were formed in the course of the Open Access discussion. This last aspect is interesting since it clearly shows that some groups were able to improve their position in the process and and increase their influence in the decision making. In the last of the three matrices the role of NEPAD in the EASSy project is examined. The analysis shows two competing groups; one the NEPAD Protocol coalition, and the other the Submarine Fibre Consortium. It identifies that the powerful position initially held by the Consortium has been diluted, and that the impasse has created high levels of uncertainty about the viability of the EASSy project.
Although the analysis provides interesting insights on the levels of power and interest of the stakeholders, the reader remains in the dark about the data and methodology used to justify the classifications. The identification and grouping of the stakeholder could have been documented better. But also the way in which they were plotted in the Power-Interest matrices definitely needs to be explained in more detail. This would give other researchers an easier possibility to validate and extend on this research.
In spite of these methodological shortcomings of the paper, it provides an important analysis for everyone who wants to understand the process of the development of EASSy. It also shows that times are changing. As Mike Jensen already noted in his APC issue paper on Open Access Models, a growing number of people are painfully aware that the mistakes made with the SAT3/WASC cable should be avoided at all costs if improved access to low-cost internet connectivity is to be realised for Africa.

This review was writen for the World Dialogue on Regulation

In Afrika is er, met uitzondering van Zuid-Afrika, nauwelijks sprake van een volwassen software-industrie. Het ontbreken van geld is een van de redenen. Een ideale markt voor Free en Open Source Software (FOSS), zou je zeggen. Maar dat valt tegen. Het continent lijkt geen haast te maken, gestolen software is er eerder regel dan uitzondering en zolang de lange stoet Europese- en Amerikaanse software-experts die de laatste jaren voorbij is getrokken, vlammende betogen over FOSS houdt met behulp van Powerpoint-presentaties en Word-bestanden, is een doorbraak van FOSS in dit werelddeel niet te verwachten.

In ontwikkelingslanden is er veel aandacht voor het gebruik van Free en Open Source Software. Grote donoren als de United Nation Development Program (UNDP) en de Wereldbank, maar ook de Europese Unie, adviseren een open-sourcebeleid aan de landen in Azië en Afrika en kleinere donoren volgen dit voorbeeld. 'FOSS is goed', zeggen de donoren, want 'FOSS heeft veel voordelen en geeft de mogelijkheid een versnelde groei te realiseren van de ICT-infrastructuur en IT-industrie'. Inderdaad: de voordelen voor de ontwikkelingslanden door FOSS lijken groot te zijn. Zo kost het opzetten van een infrastructuur met FOSS minder geld. In de meeste gevallen kan er een goed alternatief worden gevonden waarbij de investeringskosten voor de software, in vergelijking met proprietary alternatieven, nihil zijn. Met name interessant voor ontwikkelingslanden waar geld voor investeringen vaak moeilijk te vinden is. Ook de onafhankelijkheid van een softwarebedrijf, dat als enige veranderingen kan doorvoeren in de software, is een belangrijk voordeel. Het geeft landen de mogelijkheid om zelf het heft in eigen hand te nemen en software aan te passen aan de lokale condities. Doordat de broncode beschikbaar is, kunnen jonge software engineers leren van het werk van anderen en deelnemen in softwarecommunities die anders buiten hun bereik zouden liggen.
In Afrika, waar met uitzondering van Zuid-Afrika nauwelijks sprake is van een volwassen software-industrie, kan FOSS inspiratie bieden voor het opleiden van de eerste generatie software engineers. Docenten kunnen de broncode of delen ervan laten bestuderen en studenten aanmoedigen deel te nemen in de projecten. Wellicht belangrijkste voordeel van FOSS is dat landen kunnen ontsnappen aan de vicieuze cirkel van de gestolen software. Gestolen software is in ontwikkelingslanden regel en geen uitzondering. Zelfs respectabele organisaties als ministeries en universiteiten hebben hun ICT-infrastructuur gebouwd op illegale software. Vaak komt het voor dat het Windows besturingssysteem, omdat het meegeleverd is met nieuw aangeschafte computers, de enige legale software binnen dergelijke organisaties is. In de meeste gevallen is er geen geld beschikbaar voor softwarelicenties en FOSS zou de enige manier kunnen zijn om deze onwenselijke praktijk te doorbreken.


De open-sourcecommunity heeft in Afrika mooie alternatieven voortgebracht. De trots van Afrika is natuurlijk Ubuntu. Met behulp van de visie en het kapitaal van de Zuidafrikaanse entrepreneur Mark Shuttleworth heeft Afrika haar eigen Linux-distributie. Een betrouwbare en volwassen distributie die gratis voor iedereen beschikbaar is. Voor de geïnteresseerden die niet voldoende bandbreedte heeft om Ubuntu te downloaden - dat geldt voor 99.9% van de mensen in Afrika - wordt de cd-rom, keurig verpakt, gratis op je huisadres of in je postbus afgeleverd. Ubuntu geeft in de 'basisuitvoering' aan de gebruiker alle software die nodig voor zijn of haar dagelijkse werkzaamheden. Ook voor het installeren van een kleine server heeft het alle tools in huis en voor scholen is er een speciale uitvoering: Edubuntu, met educatieve software.
Toch is de adoptie van FOSS in Afrika beperkt. Er zijn maar weinig mensen en instellingen die zich laten overtuigen door de voordelen en kiezen voor een open-sourcestrategie. In de meeste gevallen wordt een computer direct voorzien van alle illegale software die voorhanden is en vaak zijn het de hardwareleveranciers die, tegen een kleine vergoeding, de illegale software plaatsen. Ook in het Afrikaanse onderwijs is nauwelijks aandacht voor FOSS. Daar waar een uitstekende mogelijkheid ligt om jonge mensen de spelregels en alternatieven voor het gebruik van software aan te reiken, wordt klakkeloos gebruikgemaakt van illegale software. Toch zijn er uitzonderingen. Een onderwijsinstelling die het wél heeft aangedurfd om FOSS organisatiebreed te implementeren, is Uganda Martyrs University in Uganda. Door middel van een geleidelijk proces, met veel voorlichting aan staf en studenten, is in een aantal jaren de overstap gemaakt naar FOSS. De migratie van deze universiteit is een van de grootste op het Afrikaanse continent.


In Afrika ontbreekt het computergebruikers vaak aan kennis, maar vooral aan aansprekende voorbeelden en rolmodellen om de stap naar het gebruik van FOSS te maken. De kennis over FOSS moet vooral worden gehaald van Internet en het is vaak even zoeken om de juiste informatie te vinden. Juist dit zoeken is een probleem. Voor mensen in Afrika is Internet een schaars goed. Internet thuis, zoals dat in Nederland gemeengoed is, is voor de meeste Afrikanen onbetaalbaar. Het zoeken moet dan vooral in Internetcafes gebeuren. Ook dit is niet goedkoop en er wordt dan ook meestal niet de tijd genomen om uitgebreid te zoeken tot de juiste informatie is gevonden. In een dergelijke context zouden rolmodellen een belangrijke rol kunnen spelen. Mensen waar tegenop wordt gekeken en een bepaald gedrag vertonen dat kan worden gekopieerd. Zo is het gebruik van rolmodellen in de reclame-industrie een beproefd promotiemiddel. Wat zou het prachtig zijn als bekende voetbalspelers met T-shirts van de Free Software Foundation aan zouden lopen of politici presentaties zouden geven met behulp van OpenOffice.org. Voorlopig is dat nog een droom. Belangrijke rolmodellen in Afrika zijn de representanten van de Europese en Amerikaanse donoren, diplomaten en andere ex-patriates. Deze groepen representeren een levensstijl die door veel mensen als een doel wordt gezien.
De laatste jaren heb ik een lange stoet Europese- en Amerikaanse software-experts voorbij zien trekken. Op één uitzondering na, kwamen ze allemaal met hun laptops met proprietary producten. In het ergste geval gaven deze mensen vlammende betogen over de voordelen van het gebruik van FOSS in Powerpoint-presentaties en lieten flyers en documenten in Word achter voor de participanten. Of ze promoten het gebruik van open content leermaterialen en vertelden daarbij dat (het gesloten) Blackboard de ideale omgeving was om het aan de studenten ter beschikking te stellen. Op de vraag waarom zij zelf geen FOSS gebruikten, verschuilden zij zich achter het beleid van hun organisaties. Hun organisaties kozen niet voor FOSS en dus konden zij ook geen FOSS-applicaties gebruiken. Gelukkig is er ook 'goed' nieuws. Veel van die software-experts zijn bezig om hun organisaties te overtuigen dat FOSS een goed alternatief is. Waarschijnlijk gebeurt dat door middel van Powerpoint-presentaties. Met dergelijke ongeloofwaardige verhalen wordt een Afrikaan niet overtuigd. Hij blijft met de gedachte zitten: als FOSS zo goed voor ons is, waarom gebruiken jullie het zelf dan niet?

Relevante links

This article has also bee published in Livre
The Department of International Development (DFID) and the Information for Development Program (InfoDev) have released a report on the status, opportunities and challenges of Mobile Banking in the Developing World. The report Mobile Banking: Knowledge map and Possible donor support strategies was released in July 2006. Together with Alex Weir I explore possibilities and hindrances for implementation of this promising service in Africa.

With the rapidly increasing penetration of mobile phones in the developing world, new mobile-enabled services are being explored. One of the services that is expected to have an important social and economical impact is mobile-banking. Mobile-enabled financial services (m-banking) are one of the newest approaches to the provision of financial services through ICT. It involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a client’s account. A mobile network offers a high technology platform onto which these new services can be provided at low cost by the network provider. M-banking services which use channels like sms can be carried at a cost of less than US $1c per message. The low cost of using existing infrastructure makes such channels more amenable to use by low income customers.

In spite of the high possible impact of m-banking services, the report Mobile Banking: Knowledge map and Possible donor support strategies notes that donors have given little support to explore its potential and develop solutions. However, according to the authors, there is sufficient theoretical evidence that m-banking will have an impact on the people that do not have access to banking services at the moment. This conclusion is based on two reports: The Enabling Environment for Mobile Banking in Africa and Micro-Payment Systems and their application to mobile networks by InfoDev.

The report identifies three main barriers to the emergence and growth of m-banking:
  1. Uncertainties over the speed and nature of customer adoption

  2. Lack of interoperability with existing payment systems

  3. Regulatory barriers, i.e. lack of openness to new models and lack of policy certainty

Donor support should therefore focus on activities that work towards removing these barriers.
In the recommendations the report states that donors should adopt a strategy that supports activities to improve the informational, policy and regulatory environment in which m-banking initiatives will be appreciated. Direct support to banking institutions and/or telecommunication companies to develop workable solutions is not expected to lead to quick results. At the same time more research is promoted to fill in current knowledge gaps:
  1. Further and ongoing client survey work to monitor adoption, to understand the main drivers especially under the unbanked and poorer people

  2. Systematic analysis of emerging models, and especially the role and business case telcos and banks

  3. Scan of the emerging models outside of well known places

Although the report advocates a clear case for the donors to support the development of a m-banking regulatory environment, it gives surprisingly little attention to the technical infrastructure that is needed to support mobile financial services. Therefore the question remains whether m-banking in the Africa with the current ICT infrastructure is feasible.

Alex Weir is a Zimbabwe-based software designer who has developed several sms-based systems. Over the past period he tried to draw attention to the possibilities of m-banking on the African continent and has proposed a cashless sms-based payment system. In his concept paper Low-cost highly-secure electronic banking for the 3rd world - SPS - SMS Payment SystemWeir explains the workings of such a system. With him I look at the why m-banking has not been adopted on a wide scale in Africa.

VvR: What are the advantages of m-banking for a nation and for Africa?

AW: The provision of cash in an economy has a high but often unseen cost. The Government, the Reserve Bank, and ultimately the citizen do pick up this cost. The expansion of a nation’s banking reach and the minimisation of cash holdings has security benefits for businesses and individuals, benefits for the velocity of circulation of money in the economy, etc.. For example hopefully women who are engaged in business and small business will find it easier to keep money out of the hands of their husbands if that money is in electronic and not in cash form.

VvR: What are in your opinion the most important hindrances for the implementation of m-banking in Africa?

AW: The lack of affordable systems which are also secure. Banks come from a traditionally high cost base, and MPP’s (Mobile Phone Providers) come from a very high-profit environment. Neither of these two are enthusiastic about embracing any low-cost model. There are a few exceptions in the banking arena – Central African Building Society of Zimbabwe and Equity Bank of Kenya are two worth noting.
The possibility of non-banking, non-MPP operators to create m-banking systems is made much less economic by the fact that MPP’s effectively control the pricing of mobile messaging (e.g. sms/text messages) and that they seem unwilling to discount such pricing to levels close to their actual cost. Even banks or building societies are likely to encounter this high pricing policy problem if they try to offer seriously low-cost systems.Governments and regulators and very often closely tied (formally and/or informally) to MPP’s and to banks, and are therefore slow to adopt any drive to lower the costs of banking for the masses.
If one examines most of the present offerings (all of them recent) one sees that they are aimed at the urban middle-class or upper-middle-class – they require up-market phones, existing bank accounts, and often credit cards. Those offerings (like Kenyan Equity Bank’s Easy 24/7 Phone Banking) which are aimed at lower market strata, in fact usually do not yet have any inbuilt payment method – they are effectively passive accounts with sms alerts only. Two relatively middle-range m-banking offerings are South Africa’s Wizzit and Zambia/DRC’s Celpay, but note that even Wizzit’s transaction charge for Wizzit-to-Wizzit account transfers is a hefty US$ 0.43. Therefore Wizzit seems to be selling its service on being urban, fashionable and trendy, and not on being an affordable service for the masses.

VvR: What is the key for success for m-banking?

AW: Low cost combined with high security, ease of use, and a potential or actual large catchment population.

VvR: What regions are most likely to adopt m-banking first?

AW: Possibly regions without a highly entrenched existing banking sector. Possibly even countries like DRC with almost no infrastructure of any kind outside the major urban areas.

VvR: From a technical perspective, what are the challenges?

AW: Security is the major challenge. It is not easy to provide adequate security using the protocols which are available on low-end mobile phones. And even with higher-end mobile phones and their corresponding higher security communication channels, there are still potential loopholes inside the MPP’s who handle the traffic and also inside the National Security Services; this is in addition to the dangers of insider fraud by IT Personnel belonging to the mobile banking organisation/operation itself – a danger which threatens each and every banking operation which relies on computers.

The danger of course lies in the interception and modification of payment instructions whereby the payment recipient is changed and/or the payment amount is inflated. In fact the suspicion of existing mainstream banks (see for example here) towards even their own internet banking offerings is such that they seem to want to disclaim liability for customer loss.
To offer a high level of security for payment transactions over sms protocol on bottom-end mobile phones it is necessary not only to move from the use of PIN numbers to TAN numbers (Transaction Authorisation Number) but also to move further to what I term ‘Dynamic TANs’ (DTANs - dynamic transaction authorisation numbers – which are calculated by simple addition to make what in technical jargon we call ‘checksums’ on the payee’s account number and the payment amount. This process is described in some detail in the SPS concept paper as above.
Since people do not want to spend their entire lives and spare time performing simple arithmetic, then many users of such systems will decide to operate two such electronic accounts – one which holds moderate amounts of money and with which the holder always uses the DTAN method, and another account which only ever holds relatively small amounts of money and with which the holder always uses the much faster alternative TAN method.

VvR: What role do the regulators (ICT and financial sector) have to play?

AW: A major obstacle is the high charges levied by the MPP’s. It would be possible for the regulators to set maximum prices for quota volumes of sms and other mobile messaging systems which are dedicated to m-banking systems.
Another regulatory requirement in most countries is that a bank or building society must be involved in any electronic or mobile banking system; this probably makes a lot of sense and should probably be maintained; alternatively the e or m-banking organisation must follow the same strict regulations governing for example liquidity and liquidity ratios which are followed by existing banks. Possibly even their net deposits can be handled on a daily basis by the country’s Reserve Bank.
Regulators also have a role in extending geographic coverage across a country – i.e., setting mobile phone reception coverage requirements for percentage of total population which MPP’s must attain within set time-frames.
Regulators could even require that MPP’s offer m-banking at or below maximum set rates per transaction, with the minimum number of accounts on offer as a set ratio to their mobile customer base, but that would be quite radical.
As these new low-cost (or even zero-cost) m-banking services emerge, a way for the existing players to keep them out of the game will be to make inter-bank ICT systems unaffordable and/or too complex to be participated in. Regulators can have a role in controlling or eliminating that tendency by setting maximum charges and on insisting on simple but secure interoperability standards. To be practical, these factors can affect whether the low-cost competitors can offer affordable access to competitors’ ATM cash machines.

VvR: What do you expect from the donors and what is it that they should not do?

AW: The donors should stop to support all kind of workshops and seminars - as was suggested in the report. Also I am in favour of setting up a technical African task-force to develop one or several standard recommended solutions.
Donors could integrate m-banking into some of their programs such that the donors themselves, the recipients, and the m-banking operators all benefit. For example, possibly the World Food Program could change their famine relief distribution model in some countries and regions, whereby they issue e-money which is only redeemable with selected food stockists for certain food supplies. Troop demobilisation operations are other obvious targets for e-money systems.
Donors could also assist m-banking start-ups by absorbing some or all of the risk, but then of course m-banking operators may be encouraged to expect failure (and when failure is expected, it often arrives).
Finally, any and every e-money system depends on trust and having a guarantee that if all else fails, someone will convert your e-money into real goods, services or even good old hard cash. Maybe at the start of m-banking projects, some kind of temporary and condition-linked donor guarantee or endorsement will be advantageous.
More information on m-banking in Africa:

This article has also been published for the World Dialogue on Regulation
Thursday, January 11, 2007
Research ICT Africa! (RIA!) has published a new chapter in their e-Index research. At the end of 2006 the report Towards an African e-Index: SME e-Access and Usage Across 14 African countries was published. The SME e- Access and Usage survey was carried out across 14 African countries between the last quarter of 2005 and the first quarter of 2006.

The report explores the impact of ICT on private sector development, and how ICT can contribute to a vibrant SME sector and economic growth in the context of developing economies. The countries covered included Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe.

Research ICT Africa! (RIA!) network seeks to build an African knowledge base in support of ICT policy and regulatory design processes, and to monitor and review policy and regulatory developments on the continent. The establishment of the network originates from the growing demand for the data and analysis necessary for an appropriate but visionary policy required to catapult the continent into the information age. The reports to develop an African e-Index provide an answer to this demand.

The report that was presented in the last quarter of 2006, Towards an African e-Index: SME e-Access and Usage Across 14 African countries, explores the e-access and usage of ICT in the domain of the Small and Medium Sized Enterprises.

The SME sector has an important role to play in the present and future economic development, poverty reduction and employment creation in developing economies. The report notes that the SME sector is the sector in which most of the world's poor people  work. SME sector growth largely exceeds the average economic growth of national economies in many countries and contributes significantly to employment creation. At the same time, little is known about the impact of ICT on the SME-sector.

The literature to date has failed to create a tight link between the use of ICT and issues such as profitability and labour productivity. This survey aims to provide solid empirical evidence of the link between ICTs and business performance based on firm-level evidence. It is interesting that the survey also tries to include informal businesses, that form the core of the small businesses in Africa.

The report is structured as follows: the first chapter introduces the methodology that was used to achieve the objectives of the study, followed by two chapters providing a brief background of the SME sector and the ICT infrastructure in the 14 countries that participated in the survey. The fifth chapter focuses on ICT access and usage. Chapter Six looks at the impact that the usage of ICT has on the profitability and efficiency of SMEs. Chapter Seven summarises the main conclusions and policy recommendations arising from this analysis.

In 140 pages and some appendices, the report certainly provides new and interesting data on the use of ICT in the SME sector in the 14 countries that were surveyed in Africa (Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe). With regard to the impact of ICT the report draws the following main conclusions:

  • ICTs are significant input factors for both formal and informal 
    SMEs and contribute positively to revenue generation;
  • ICT possession and usage is clearly linked to higher labour 
  • Mobile phones have overtaken fixed phones and computers as tools in supporting the running of SMEs, given their prevalence and accessibility;
  • The main constraint to ICT usage remains high investment and/or usage costs.

In line with the last point, the report urges for the development of business applications based on the mobile platform. These provide relatively low-cost solutions with a potentially high penetration. Essential, however, is that a payment mechanism is developed. See also WDR's resource on this issue.

Regulation is considered to be the key issue to increase accessibility and affordability of ICT for the SME-sector. It is critical that governments accept that ICT costs can be reduced by establishing a regulatory environment that facilitates competition in the ICT sector.

Although the report provides a wealth of empirical data for policy makers to support informed decision making, its findings are biased towards Anglophone Africa in South East and Central Africa. The findings may not apply to the Francophone countries located mainly in West and North Africa. We wait eagerly for the next chapter of the African e-Index but we hope that it will also include main Francophone players like Senegal, Mali, Algeria or the DRC.

Related report: Gillwald, A. (Ed.), 2005. Towards and African e-Index: Household and Individual ICT Access and Usage in 10 African Countries.

This article has also been published at the website of the World Dialogue on Regulation (WDR) - www.regulateonline.org

Blogged with Flock

In most countries (developed as well as the developing world) legislators, regulators and policy makers in the telecommunications and media sectors are confronted with the situation that the strict borders between telecommunication, information technology, media and their supporting infrastructure are disappearing. Convergence of technologies, services and industries demand a fundamental re-thinking of the traditional sectorial legislation and regulations. In a time where ICT penetrates the domain of the audiovisual media and vice versa, a new ball game is starting. 
In their research report Régulation des communications électroniques à l’heure de la convergence: enjeux, état des lieux et perspectives en Afrique de l’Ouest et du Centre the Centre sur les politiques internationales des TIC Afrique du Centre en de l'Ouest (CIPACO) examines the implications of this trend for Central and West Africa.
The study is based on a large amount of different sources. The interviews to explore the implications of convergence for regulation were mainly conducted with the regulatory authorities in Senegal (Haut Conseil de l’Audiovisuel, HCA, Agence de Régulation des Télécommunications, ART and Direction de l’Informatique de l’Etat, DIE). Case studies outside the regions are also presented. Finally the study tries to identify the key implied issues and explores ways of addressing the induced new regulatory challenges that
face the countries.
In their recommendations to face the challenges of convergence the CIPACO notes that policy makers, regulators, industry and civil society all have to play their role in moving the convergence agenda forward (page 57-58). The study provides practical guidelines.
Policy makers:
  • Develop regional and sub-regional approaches and harmonize regulatory frameworks and training programs
  • Develop models that can be tailored to countries at different levels of information society development
  • Build convergence into technical cooperation projects addressing information society issues
  • Bring civil society into information society debates to ensure that the interests of society as a whole are adequately addressed
  • Encourage regulatory associations to deepen the understanding of convergence issues
  • Establish channels of communication between telecommunications and media regulators to develop rationale for addressing convergence through single regulatory framework
  • Develop strategic partnerships between infrastructure and content providers
  • Develop economies of scale
Civil Society:
  • Increase understanding of issues by civil society organizations
  • Lobby public and private sector to ensure recognition of social interests
The report provides interesting perspectives on the West and Central African regulatory challenges. We are waiting eagerly for a similar exploration in the East and South African regions by CIPACO's counterpart CIPESA (Collaboration on International ICT Policy for East and Southern Africa).

This article has also been published on the website of the World Dialogue on Regulation (www.regulateonline.org)

Wednesday, December 06, 2006
The African Internet Service Providers Association (AfrISPA) has released the African Regulatory Index Reports for 20 countries in Africa through the website of Catalising Access to ICTs in Africa (CATIA) website. The purpose of the studies is to investigate how regulatory regimes impact the operations and growth of the Internet Service Providers. The reports aim to provide Internet Service Providers with the information needed to lobby for liberalization, resulting in increased competition, higher quality of service, lower costs of Internet access and increase reach of the Internet into under-served areas.

The growth of Internet access on the African continent is slow and unequally distributed over the regions. Large areas of Africa have little or no access to affordable Internet, but also in the urban centers prices for Internet access are high. This has a negative impact on the socio-economic growth and the participation of Africa in the knowledge society. The regulatory bodies in these countries play in important role in facilitating and accelerating (or obstructing) access. In order to better understand the cause of the slow growth the African Internet Providers Association (AfriSPA) commissioned a study of the regulatory regimes in selected African countries, with particular emphasis on how these regulatory regimes impact the operations and growth of the Internet Service Providers (ISP). The research was conducted by the Kenyan based Technology Consulting Group.
AfrISPA provided a list of 34 countries within Africa for the study. It prioritized 14 of these and requested the researchers to cover as many of the others as feasible. At present the reports of 2o countries have been released. According to the researchers four more will follow.
All the reports have a similar structure and aim to reveal the same issues:
- Regulations that govern operators and service providers of Internet services;
- Market structure within the communications sector;
- Legislation relating to the communications sector;
- Dispute resolution mechanisms available within the sector;
- Communications Licensing regime;
- Privileges/Obligations of various licensees; and
- State of liberalization of the communications sector.
The reports provide a wealth of information for researchers and decision makers who want to understand challenges that the African telecommunication sector is faced with. Unfortunately, the reports are hard to trace (and not listed on the website of AfrISPA) and the restrictive copyright prevents widespread distribution of the documents. A more open license like the Creative Commons would increase the possible impact of this important research work.
Now that the most advanced countries in Africa have been covered, we are eagerly waiting to get a more in depth understanding of the situation in the 'blank spots' in Africa. If we take a look at Acacia's Atlas mapping the growth of ICT and Internet in Africa we are eagerly waiting for the reports describing the situation in the least developed countries in the heart of Africa, (Chad, Democratic Republic of Congo, Niger, Sudan and Ethiopia), and along the West coast (Sierra Leone, Guinea and Guinea-Bissau) and the South East coast (Mozambique).

The African Regulatory Index Reports can be found and downloaded at the website of CATIA:
- Egypt Report (draft June 2005)
- Mauritius Report (draft June 2005)
- Malawi Report (draft June 2005)
- Zambia Report (draft June 2005)
- Kenya Report (draft June 2005)
- Rwanda Report (draft June 2005)
- Tanzania Report (draft June 2005)
- Uganda Report (draft June 2005)
- Gambia, Nigeria, Zambia and Swaziland (January - March 2006)
- Angola, Burkina Faso, Djibouti and Togo Report (June 2006)
- Cameroon, Gabon, Madagascar and Mali Report (June 2006)

This article has also been published at the website of the World Dialogue on Regulation (WDR) - www.regulateonline.org