[governance] Africa: Connectivity and Bandwidth Reports

[karen banks]

dear all,

Some of you would have seen the 'Open Access' paper APC commissioned 
for the Athens IGF - here it is, extracted, with another piece by 
russell southwood (balancing act)

karen

>Africa: Bandwidth Reports
>
>AfricaFocus Bulletin
>Dec 7, 2006 (061207)
>(Reposted from sources cited below)
>
>Editor's Note
>
>"Bandwidth is the life-blood of the world's knowledge economy,
>but it is scarcest where it is most needed ... For those
>[African institutions] that can afford it, their costs are
>usually thousands of times higher than for their counterparts in
>the developed world, and even Africa's most well-endowed centres
>of excellence have less bandwidth than a home broadband user in
>North America or Europe, and it must be shared amongst hundreds
>or even thousands of users.  A variety of factors are
>responsible for this situation, but the biggest cause is the
>high cost of international connections to the global
>telecommunication backbones." - Mike Jensen
>
>This AfricaFocus Bulletin contains excerpts from recent reports
>by Mike Jensen for the Association of Progressive
>Communications, and by Russell Southwood of Balancing Act, both
>focusing on issues of additional bandwidth.
>
>Another AfricaFocus Bulletin sent out today contains a variety
>of reports from Balancing Act's News Update on the IT and
>telecommunications sectors in Africa.
>
>++++++++++++++++++++++end editor's note+++++++++++++++++++++++
>
>Open Access:  Lowering the Costs of International Bandwidth in
>Africa
>
>Association for Progressive Communications (APC)
>
>APC Issue Papers
>
>Mike Jensen
>
>October 2006
>
>[Excerpts only. Full text, with footnotes and maps, available at
>http://rights.apc.org/documents/open_access_EN.pdf
>
>* This paper ... which was finalised in late June 2006, contains
>annexes available online:
>  http://rights.apc.org/documents/fibre_bandwidth_annexes_EN.pdf
>
>* A South African, Mike Jensen sent his first email more than
>twenty years ago. He is an independent consultant with
>experience in more than 30 countries in Africa assisting in the
>establishment of information and communications systems over the
>last 15 years.
>
>* APC is an international network of civil society organisations
>founded in 1990 dedicated to empowering and supporting people
>working for peace, human rights, development and protection of
>the environment, through the strategic use of information and
>communication technology (ICTs). We work to build a world in
>which all people have easy, equal and affordable access to the
>creative potential of ICTs to improve their lives and create
>more democratic and egalitarian societies.]
>
>Bandwidth is the life-blood of the world's knowledge economy,
>but it is scarcest where it is most needed  - in the developing
>nations of Africa which require low-cost communications to
>accelerate their socioeconomic development. Few schools,
>libraries, universities and research centres on the continent
>have any internet access. For those that can afford it, their
>costs are usually thousands of times higher than for their
>counterparts in the developed world, and even Africa's most
>well-endowed centres of excellence have less bandwidth than a
>home broadband user in North America or Europe, and it must be
>shared amongst hundreds or even thousands of users.
>
>A variety of factors are responsible for this situation, but the
>biggest cause is the high cost of international connections to
>the global telecommunication backbones. This is mainly the
>result of the lack of international optic fibre infrastructure,
>which is necessary to deliver sufficient volumes of low-cost
>bandwidth, and the consequent dependency on much more expensive
>satellite bandwidth. Less than twenty of the 54 African
>countries have international optic fibre cable connections, and
>these are currently controlled by inefficient state-owned
>operators which charge monopoly prices while neglecting to build
>the national backbones needed to carry local and international
>traffic. As a result, circuits from Africa to the US or Europe
>usually cost more than US$5000 a month1 , while cross-Atlantic
>links between North America and Europe can now be obtained for
>US$2.5/Mbps/month and for US$16 30/ Mpbs/month on international
>routes in Asia.
>
>The only large-scale international fibre link in Africa
>(SAT-3/WASC/SAFE) connects eight countries on the west coast of
>the continent to Europe and the Far East. Operating as a cartel
>of monopoly stateowned telecommunication providers, prices have
>barely come down since it began operating in 2002. New fibre
>projects have been proposed which could break this monopoly and
>add many more African countries to the global grid, but most of
>these projects are also being developed by state-owned telecom
>operators. As a result they are following the same high-priced
>SAT-3 business model. Unless interventions are made to reduce
>the cost of these existing international fibre links and to
>ensure that new fibre infrastructure is quickly built, the
>continent will be prevented from tapping its latent potential
>and will fall further behind the rest of the world.
>
>This problem is not unique to Africa. Other developing regions
>suffer from the same problem, but it is at its most extreme in
>sub-Saharan Africa, which has the lowest teledensity in the
>world and the highest unmet demand for telecommunication
>services. Fortunately, African governments and the international
>community have recently become more aware that action is needed
>to improve access to communications and to encourage the
>adoption of alternative business models that can significantly
>lower the cost of international links. These have centred on
>what are known as open access models, which are cost-based and
>owned by the public sector (similar to roads and rail lines),
>rather than being operated by a club of companies aiming to
>maximise profits.
>
>Most African country telecommunication markets are slowly moving
>to a more competitive environment which will ultimately address
>pricing and national imbalances in demand and supply. However
>the international sector in developing countries is different
>from developed nations because the majority of countries have
>markets that are too small to justify the cost of deploying many
>competing international fibre cables. With each cable able to
>carry data at terabit speeds, only one international connection
>to a global hub is needed, although a second physically separate
>link is also required for backup (redundant connection)
>purposes. However achieving competitive pricing between just two
>suppliers is infeasible. Thus, in order to ensure cost-based
>pricing, a different model of deployment is needed, where the
>cable and landing points are operated on a non-profit basis,
>extending the models used by internet service providers for
>operating national or regional Internet Exchange Points (Ixs).
>
>This follows a number of recent studies which have identified
>public-private partnerships and open access models as a more
>appropriate solution for fibre deployment These also build on
>precedents set by the oil and gas industries when building
>pipelines, in which the basic approach is to establish a Special
>Purpose Vehicle (SPV) to operate the facilities. The main
>objective of the SPV is not to make a profit, but to facilitate
>profits made elsewhere by the participating companies. The aim
>is not to exclude incumbent telecom operators from the process,
>but to allow the participation of others that might bring
>additional funding or other advantages to the table such as
>rights of way to build fibre along power or rail routes
>
>The most viable structure for this approach is likely to be a
>two-part system in which national cable landing points are
>managed by national associations of bandwidth providers, while
>the cable itself is owned by a mix of operators and private or
>public investors. Given that the most appropriate place for the
>cable landing point is likely to be at the facilities of the
>national operator, these would most likely be owned by the
>state, but operated by a management company appointed by the
>national association of bandwidth providers.
>
>With the cable itself, different models can be adopted. In one
>scenario any entity would be free to invest, either as an
>operator, in which case the investment would be tied to
>guaranteed amounts of bandwidth, or as a non-user shareholder
>who might invest funds or provide a right of way (e.g. a gas
>pipeline operator wishing to minimise the cost of operating
>their pipeline network). Alternatively, ownership of the cable
>can be defined on a national basis with shares held by the same
>special purpose companies that operate the landing points.
>
>In either case, sufficient investment is likely to come from the
>much broader base of operators that would be able to access the
>bandwidth at cost, and little additional financing would likely
>be required However some of the smaller, more remote or less
>developed countries might require special assistance, and given
>the general interest by the international community in ensuring
>more universal access, along with the positive impact on demand
>for national backbones that would result from affordable
>international connectivity, donors could provide a demand
>guarantee that would meet any revenue shortfalls in the early
>years. This may be a risk for donors if the demand was not met
>over the life of the cable. However, assuming the long-term
>business case is sound, they might look to recoup the funding
>when traffic increased at a later point. Donors could also be
>invited to meet the cost of additional add-drop units on fibre
>projects to ensure small and remote communities along the way
>can be reached. The choice of these locations would be a matter
>for negotiation between the donors and national governments.
>
>Given the interest of governments in supporting the development
>of their nations such as through improved access to health and
>education, along with the broader social improvement and
>enhanced public services which can be provided through better
>connectivity, there is a growing interest amongst a wide range
>of stakeholders in ensuring that open access models are adopted.
>
>The initial focus is likely to be on supporting the adoption of
>open access models for the upcoming East African fibre project
>(EASSy, see below) which could then be replicated in West and
>Central Africa. At the same time SAT-3 and other existing
>international fibre cables may be declared essential facilities
>serving the public good with regulated pricing. Specific
>activities are likely to be:
>
>* Increased backing for policy makers and regulatory agencies in
>Africa to implement policy changes and regulations that allow
>open access to international fibre
>
>* Support to local associations of bandwidth providers to
>establish shared international fibre gateways
>
>* Increased backing for international fibre projects which aim
>to provide equal access to all bandwidth providers.
>
>There is the risk that the entrenched interests of the incumbent
>operators and their state-owners will be able to resist efforts
>to change national telecom policy, and that the EASSy project
>goes ahead as currently planned. Nonetheless, support from a
>broad range of stakeholders is expected to substantially improve
>the chances of an alternative strategy being adopted, which
>could have a major impact on the way international fibre
>projects in developing countries are being planned in the
>future.
>
>In summary:
>
>Most of Africa is as yet unconnected to the global fibre
>backbones.
>
>Optic fibre is the only way to supply sufficient international
>low-cost bandwidth.
>
>As elsewhere, the limited fibre that has been laid in Africa is
>not competitively priced, and uses business models developed by
>cartels of monopoly telecommunication operators.
>
>A cable planned for the East coast of Africa (EASSy) which will
>have a major impact on bandwidth availability in the region, was
>being developed as a club of mostly state monopoly operators
>with high prices and low volumes in mind.
>
>The strategy for the deployment of an open access model for
>EASSy is in the process of being legislated by policy makers in
>the region.
>
>The adoption of a low-cost open access model for EASSy would
>likely have a major impact on the way new fibre projects are
>planned in other regions in Africa.
>
>1. The Nature of the Problem
>
>Communication costs in Africa are currently thousands of times
>higher than in Europe or North America. This particularly
>affects those with the most limited resources: students,
>researchers, doctors, scientists, and other public servants, as
>well as the general public, who are unable to take full
>advantage of the unprecedented access to knowledge the internet
>provides. Cheaper bandwidth for African institutions,
>particularly governments, schools, universities, libraries and
>hospitals would provide widespread access to the wealth of
>information available online, facilitate African contributions
>to the global economy and increase the likelihood of successful
>solutions to African development problems. So in a nutshell, the
>constraints on development in Africa caused by the high cost of
>communications are not being addressed due to inappropriate
>business models used for deploying international fibre
>infrastructure.
>
>The developed world is benefiting from the surplus of optical
>fibre cable laid during the dot-com bubble which has coincided
>with technology advances that have made speeds of over 1000
>Gigabits per second routine on these fibre links. While those in
>the North reap the benefits of these developments, much of the
>South, and Africa in particular, has not seen significant
>deployment of international fibre. ...
>
>There is only one intercontinental fibre link to sub-Saharan
>Africa (SAT-3) which provides connections to Europe and the Far
>East for eight countries along the west coast of the continent
>,,, Except for some onward links from South Africa to its
>neighbours, and from Sudan to Egypt and from Senegal to Mali,
>the remaining 33 African countries are unconnected to the global
>optical backbones, and depend on the much more limited and
>high-cost bandwidth from satellite links. Even the few countries
>that have access to international fibre through SAT-3 are not
>seeing the benefits because it is operated as a consortium where
>connections are charged at monopoly prices8 by the state-owned
>operators which still predominate in most of Africa, and in many
>other developing regions.
>
>As a result, institutions in these countries pay thousands of
>dollars a month for internet connections which a home broadband
>user in North America would pay US$20 a month for. Aside from
>the general dampening effect this has had on uptake,
>unaffordable bandwidth has actually excluded African scientists
>from gaining access to the services of global research networks
>which now expect their member countries to have at least 1Gbps
>on international connections in order to access the advanced
>services and petabit data sets they now provide.
>
>In a chicken-and-egg situation, the constraints on demand
>resulting from the high tariffs charged by the monopoly
>operators have contributed to the slow pace of fibre deployment
>and the severe lack of investment in needed infrastructure. Many
>of these state-run telecom operators, often mismanaged,
>inefficient and suffering from much reduced profits caused by
>the collapse of international settlement rates, do not have the
>resources to invest the millions of dollars needed to deploy
>national and international fibre, and neither do their host
>governments. Understandably, few private investors or donors are
>interested in financing these moribund organisations that rest
>on artificially-closed markets. At the same time, continued
>state-operator control over international gateways and national
>backbones has meant there are very few opportunities for
>investment in privately-operated  telecommunication
>infrastructure.
>
>[For detailed sections on SAT-3 and EASSEY omitted, see full
>text on the APC website]
>
>*************************************************************
>
>Balancing Act's News Update 318 (13th August 2006)
>
>Top Story: Africa's Transition to Fibre Likely to Be Slower than
>Expected, Says New Report
>
>With the proposed EASSy fibre cable coming on stream in 2008 and
>the steady roll-out of national backbone and cross-border links,
>it might be expected that the proportion of African traffic
>carried by fibre would increase very quickly. This appears
>unlikely to happen within the next three to five years,
>according to a new report from Balancing Act out this week.
>
>Currently around 80% of all of Africa's voice and data traffic
>is carried by satellite but this figure is likely to fall as the
>continent increases fibre links at all levels. The balance of
>traffic is almost all carried by the continent's only current
>international fibre link, SAT3.
>
>Based on use of its international traffic database, it estimates
>that on the basis of the progress of current plans and with
>favourable pricing adjustments on the SAT3 fibre, just over 30%
>of the total market in three years time will be carried by
>fibre, according to the African Satellite Markets report.
>
>Why is this transition likely to be so slow given that fibre is
>cheaper than satellite for high-volume traffic? There are a
>number of factors:
>
>* The slow speed of competitive national backbone roll-out: It
>has taken Nigeria five years to get to a point where Nitel is
>supplying sufficient national backbone connections to SAT3 that
>there is now a rising flow of traffic on to the SAT3 cable. By
>contrast, South Africa's Telkom completed this work prior to the
>cable opening and now carries the majority of its traffic over
>the fibre link.
>
>* The lack of inter-country links: Although both SAT3 and the
>proposed EASSy cable connect coastal cities there are relatively
>few cross-border links in place. Kenya has two sets of links
>being built to Nairobi by KDN and Telkom Kenya and a link is
>being built from Kenya to Rwanda. But other parts of the
>"land-side" infrastructure are at a much earlier stage. For
>example, Zamtel has just announced its intention to build its
>connection to EASSy (see Telecom News). And in one case
>Zimbabwe   the transition has gone backwards: Telkom SA financed
>a fibre link to the country but TelOne failed to meet the
>payments so is now sending its traffic via satellite.
>
>* The impact of high SAT3 prices on landlocked and "no landing
>station" countries: SAT3 consortium member Namibia Telecom is a
>"no landing station country" and sends 60% of its voice traffic
>via satellite, most of the balance being calls to South Africa.
>Why? Because the costs of transiting via South Africa make it
>more expensive than sending via satellite. Based on a pricing
>survey, the report looks in detail at these market distortions
>that have arisen from the position held by the monopoly market
>supplier.
>
>* The lowering of prices on the proposed EASSy cable: Although
>final prices have not yet been announced, it is believed that
>they will fall in the US$500-1000 range (the lower price
>probably being available after a five year period). This will
>give users in the largest Sub-Saharan African market, South
>Africa, a much cheaper alternative and will drive down what
>Telkom SA can charge. Over 3-5 years, this will have the effect
>of unlocking some of the market distortion problems identified
>in the previous point in the southern African region. However,
>it will leave similar problems in West Africa largely
>unaffected.
>
>Sub-Saharan Africa has seen a fourfold increase in the level of
>international Internet bandwidth supplied by satellite over the
>last four years, from 500 Mbps in 2002 to 1.86 Gbps in 2006.
>There are now 71 satellites with full or partial coverage of
>Africa and seven more are planned.
>
>Two major satellite operator acquisitions were completed during
>2006:
>
>- On 3 July 2006, Intelsat announced that it had completed the
>acquisition of PanAmSat. Intelsat now therefore operates 25 out
>of the 54 satellites over Africa.
>
>- On 30 March 2006, SES Global completed the acquisition of New
>Skies Satellites. SES Global now therefore operates 6 out of 54
>satellites over Africa.
>
>There have also been moves toward consolidation in the reseller
>market as Israel's Gilat Satcom has purchased another Israeli
>reseller IP Planet. Both companies have a significant presence
>in the African market. Another large reseller with a significant
>presence has also been the subject of an unsuccessful bid and a
>large African corporate connectivity supplier is up for sale.
>
>For further details of what's in African Satellite Markets, go
>to: http://www.balancingact-africa.com/satmarks.html To order
>the report, go to:
>http://www.balancingact-africa.com/profiles/order/order_form.php
>
>*************************************************************
>AfricaFocus Bulletin is an independent electronic publication
>providing reposted commentary and analysis on African issues,
>with a particular focus on U.S. and international policies.
>AfricaFocus Bulletin is edited by William Minter.
>
>AfricaFocus Bulletin can be reached at africafocus at igc.org.
>Please write to this address to subscribe or unsubscribe to the
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>information about reposted material, please contact directly the
>original source mentioned. For a full archive and other
>resources, see  http://www.africafocus.org
>
>************************************************************


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