UNITED NATIONS Economic Commission for Africa
Original: English
DEVELOPMENT OF AFRICAN TELECOMMUNICATIONS
IN THE 1990s
Report to the UNTACDA II Working Group
on Telecommunications and Broadcasting
TRANSCOM/692
TABLE OF CONTENTS
I. INTRODUCTION
II. TELECOMMUNICATIONS AS A STRATEGIC SECTOR IN AFRICA III. REGIONAL AFRICAN TELECOMMUNICATIONS SYSTEMS
3.1 Subregional Systems
3.1.1 Eastern and Southern Africa 3.1.2 Central Africa
3.1.3 West Africa 3.1.4 North Africa
3.2 Intra-African Traffic 3.3 Issues Arising 3.3.1 Capacity Utilization
3.3.2 Completion of Missing Links 3.3.3 Intra-African Traffic
IV. TECHNOLOGY CHANGE
4.1 Status of Digital Technology
4.2 Issues
4.2.1 Digitalization of the networks 4.2.2 Obsolescence of analogue systems 4.2.3 Adopting New Technology
V. DEREGULATION AND RESTRUCTURING
5.1 Deregulation 5.2 Restructuring 5.3 Issues Arising 5.3.1 Deregulation 5.3.2 Restructuring
VI. CONCLUSION
6.1 Expansion of Telecommunications services 6.2 Regional Cooperation
6.3 The Changes in Technology
6.4 Restructuring of the Telecommunications Sector
6.5 Liberalization or Privatization of Telecommunications Sector References
DEVELOPMENT OF AFRICAN TELECOMMUNICATIONS IN THE 1990s
I. INTRODUCTION
1. The role of telecommunications and related information technology in today's
societies is rapidly becoming crucial, not only in national and regional socio-economic
development and trade relations, but also in political consolidation. In certainindustrialised countries, between 30 to 50 per cent of the work force is employed in
information related activities. By the year 2000, over 60 per cent of EEC employment will be strongly information related. It is estimated that by the same year, two thirds of the wealth of developed countries will be generated by information relatedactivities.
2. Telecommunications and related information technology has thus become a
major competitive sector in national, subregionai and regional socio-economic, trade
and political development strategy.
3. A reasonably reliable telecommunications sector is crucial to the sustained economic recovery of the country* The main linkages between
telecommunications and economic recovery are (a) the requirements of business and government in a market economy for timely, accurate, and reliable
information to determine the state of play in the market, to identify potential customers and suppliers, and to determine competitive prices; (b)
telecommunications as a prime medium for transmitting information quiGkiy,
cheaply, and easily; {cj the cost to the economy of foregone economic
opportunities due to an inadequate and unreliable domestic and international telecommunication network; (d) 'the financial cost to the country from operating a loss-making telecommunications network; and (e) the sector's importance as a major foreign exchange earner. Reliabte communication capabilities are especially important for financial,, tourism, mining, transport, service, andexport-oriented business activities in the country and are becoming increasingly important in the sale and distribution of agricultural products.
4. The above declaration by an African government amply demonstrates that telecommunications is generally recognized as vital to the economic activities in Africa. Along with the other aspects of the national infrastructure such as transport and energy, telecommunications is recognized as one of the key competitive factors in the world economy. For instance, the "just-in-tirne" concept of management, which is acknowledged as one of the innovations of modern management, is practical because of advances in telecommunications technology which enables computers to
"talk" to each other, irrespective of distance. The revolution in information and communications technologies makes knowledge the new competitive resource.
TRANSCOM/692 Page 2
5. It is therefore encouraging that African governments have at least recognized the importance of telecommunications in their economic development. It is For this reason that in 1971, the Pan-African Telecommunications Network (PANAFTEiL) was established by the Summit of the OAU Heads of State and Government. Two years later (1973), the PANAFTEL Coordinating Committee composed of the OAU, EGA and ITU was created to coordinate all aspects of the development of the PANAFTEL Network. When the United Nations Transport and Communications Decade for Africa (UNTACDA) was declared for the years 1978-1988 with the aim of promoting the establishment of integrated regional transport and communications networks to enhance the social and economic development, PANAFTEL became part of the UNTACDA programme.
6. An evaluation of the UNTACDA programme in 1988 showed that some measure of success had been achieved both in the expansion of the network and in the mobilization of financial resources in that out of an estimated total of US dollars 3,078 million required to implement the 232 telecommunications projects, US dollars 615 million (20%) was realised. This should be seen as a fairly good measure of success, especially when viewed in light of the then prevailing serious economic crisis in the African countries during the 1980s, which still persists in the 1990s.
7. However, despite the concerted efforts made within the framework of the UNTACDA programme in the 1980s, the level of telecommunications development is still far below what is needed for sustainable development. The total number of direct exchange lines (DEL) in Africa was estimated at 4.3 millions in 1988, which translates into an average density of 0.7 direct exchange lines for every 100 inhabitants in the continent. Compared to Asia with an average density of 3.5 DEL/100 inhabitants, Latin America with 5.87 DELs/100, Europe at 22.8 DELs/100, and North America with 32.8 DELs/100, it is evident that Africa still has a large gap to cover.
8. The following lament of an African country about the status of its telecommunications system is illustrative of the gravity of the situation:
The existing telecommunications infrastructure has grossly insufficient capacity and a very poor quality of service. In 1991, 0.3 per cent of the population had telephones or 25 per cent less than the average percentage of the population owning telephones in Sub-Saharan Africa. In addition, only 60-70 per cent of the installed phones actually worked. Fault rates are 30 times higher than those in developed countries. The call completion rate for inter-urban and incoming international calls is betow 20 per cent versus an average of 60-70 percent in industrialized countries. The severe shortage of telephones and the poor service quality poses a major constraint to the growth of private businesses or more efficient operations and can thus compromise the economic recovery.
The financial position of the sector is quite weak. The Corporation, the main operator, was insolvent by 1988 due to a lack of tariff increases, substantial foreign exchange losses, and operational inefficiencies. The financial position has improved since 1991 with 300-500 per cent increases in tariffs, conversion to equity of debt owed to government; and improvements in operational efficiency.
9. In 1988, following an in-depth evaluation of the UNTACDA I programme, the Conference of African Ministers of Transport, Communications and Planning decided to continue the development of transport and communications within the framework of a second UNTACDA programme to be implemented over the last decade of this millennium. This programme, called UNTACDA II, was launched by the United Nations General Assembly at its 40th Session in December 1991 in order to enhance the achievements made during UNTACDA I; that is to establish an efficient integrated transport and communications system as a basis for the physical integration of the continent.
10. Thus within the framework of UNTACDA II, the countries, the regional political and economic organizations, the development financing institutions, the sub-regional economic groupings, private operating organizations and partners in the African development process, are expected to re-double and unify their efforts with a view to improving transport and communications (including telecommunications, broadcasting and postal services) through the implementation of approved
programmes.
11. The strategy for the telecommunication component of UNTACDA II programme was developed by the working Group which was set up within the framework of UNTACDA II by the Ministers. The Working Group on Telecommunications and Broadcasting consists of the following organizations: International Telecommunication Union (Chairman), Pan-African Telecommunication Union, Organization of African Unity, African Development Bank, Union of National Radio and Television Organizations in Africa, United Nations Educational, Scientific and Cultural Organization and the Economic Commission for Africa.
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12. The objectives for the telecommunications sector component of UNTACDA II programme is summarized in the chart that follows:
13. In the three initial years of the Decade programme implementation, several developments have taken place which have direct implications on the African telecommunications sector. Among these are the political changes in Eastern Europe which have attracted the attention of Africa's traditional partners in development to such an extent that financial resource flows to Africa have significantly declined. This development has been widely discussed in many fora on African development and therefore will not be addressed in this paper. The following are the key developments which are of immediate concern to African telecommunications industry.
(i) The Globalization of the World Economies: This has made efficient telecommunications one of the strategic competitive factors in that all factors of production, including natural resources, are easily traded among nations because of effective communications technology. The implication to Africa is obvious : in order to be competitive in world trade, Africa needs to develop its telecommunications services to the level required to support economic growth.
(ii) Reaionalization of the World Markets: Europe 1992 is a reality, and so is the North American Free Trade Agreement (NAFTA). Similar efforts at regional cooperation are on-going in the Pacific Rim with the formation of the Asia-Pacific Economic Cooperation (APEC), forum in Central America, South America and, of course, in Africa itself with the adoption of the Abuja Treaty (1991) establishing the African Economic Community. As the primary role of these regional organizations is to promote free trade and movement of persons, the role of efficient telecommunications services is paramount and central. The implication for Africa is also obvious : telecommunications services must be improved as a necessary condition for economic cooperation and integration. The role of telecommunications including broadcasting in involving the people in economic activities and in mobilizing popular participation for sustained development is not only evident but also crucial.
(iii) Rapid Technological Changes: Telecommunications technology has changed in leaps and bounds over the last decade and this rapid change has and will continue to have profound impact on African telecommunications industry. The obvious impact of technological change is on the type of equipment installed; for example, the move from analog to digital technology. The new equipment technologies also have impact on services which may be offered (including enhanced services, by-pass capabilities); regulations required; markets; etc.
(iv) Deregulation and Restructuring : The enhanced services and other service aspects resulting from technology advances also have some implications on the organizational, management and regulatory aspects of the industry. Coupled with the world-wide political move towards market operations, these developments haveled to calls for restructuring the industry in Africa, including liberalization, deregulation and promotion of private sector participation.
UNTACDA II OBJECTIVES FOR TELECOMMUNICATIONS
<i) Management, development and rational utilization of human resources;
(ii) Maintenance, rehabilitation and modernization of existing telecommunication infrastructure facilities;
(iiO Improvement in the management of telecommunication services;
{iv} Establishment of effective and operational planning units within national
telecommunication administration;(v) Establishment, harmonization and implementation of tariff agreements at subregional and regional levels;
(vl) Promotion of transiting of a high percentage of intra-African
communications through centres in Africa by utilizing the installed PANAFTEL
Network;
(vii) Development of research and manufacturing capacity;
(viij) Completion of the missing links of the PANAFTEL Network;
<ix) Implementation of the RASCOM project;
(x) Strengthening of the Pan-African Telecommunications Union (PATU;
(xi) Provision of services for special users such as news agencies, airtransport, broadcasting and meteorological services;
(xii) Extension of services in to rural areas;
(xiti) Promotion of institutional restructuring of existing organizations for
improving operational efficiency and the process of commercialization of these
organizations;
(xiv) Promotion of new services, particularly those which deal with data communication and information, in order to support regional and international
trade.
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14. The African countries and their partners should consider in detail some of the issues raised in this paper in devising strategies for effective implementation of UNTACDA II programme. It is clear that these strategies should be based on effective management of the changes in the industry, including those identified above, in order to build Africa's telecommunications capacity in terms of human, institutions,
infrastructure and services.
15. This paper presents the status of telecommunications development in Africa
with special emphasis on the key issues identified above that relate to the
development of telecommunications in terms of the emerging global issues that impact
the development and competitiveness of the African telecommunications sector. Each
chapter presents the current status and identifies the key issues which need to be
addressed. Aggregate data for the region and subregion are supplemented with
specific examples from selected and representative countries which responded to
ECA's request and provided up-to-date information on their telecommunications
organizations. This approach was adopted in an attempt to present more accurately
the situation in typical African countries, without losing information in aggregates, given the diversity among the countries.II. TELECOMMUNICATIONS AS A STRATEGIC SECTOR IN AFRICA
16. Recent studies on world competitiveness have identified infrastructure {including telecommunications) to be one of the most critical factors in world economic competition, and investment in it forms the basis for future competitiveness. Together with education and market structures, it is the foundation for future growth of other sectors of the economy such as agriculture, mining and manufacturing. Thus, given its role in the global economy, African telecommunications need to be developed in order to support sustained economic and social development.
17. Telecommunications and information technologies have transformed not only how companies do business, but also what kind of business they do and where.
These technologies have created a new economy of information that collapses the traditional boundaries of space and time. Those who are most plugged into this global system stand to gain the most from it. In order to compete, Africa must be connected into the global system.
18. In recognition of the importance of telecommunications in their development, the African countries, individually and collectively, are pursuing its development with vigour. Three years into the implementation of UNTACDA II programme, significant progress has been made. The following sections summarize the status of telecommunications, with references to selected countries on which up-to-date information is available.
2.1 Current Status of Telecommunications in Africa
19. Telephone density, which is expressed as the number of main telephone lines (DEL) per 100 inhabitants in a country, is an indicator currently used to determine the level of telecommunications development in a country. On aggregate, the density in Africa is estimated to have increased from an average of 0.72 in 1988 to 0.91 in 1991. The increase occurred in all subregions with North Africa registering the largest increase. Table 1 shows the subregional distribution in 1988 and 1991.
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TABLE 1
TELEPHONE PENETRATION IN AFRICA, 1980 AND 1991
SUBREGION OF AFRICA
EASTERN AND SOUTHERN CENTRAL WEST NORTH
TOTAL
19881 POPULATION
(MILLIONS) 205.5
79.3 191.2 113.7
589.7
DELS
806,215
190,305 495,484 2,792,570
4,194,584
DENSITY DEL/100 POP.
0.41
0.24 0.26 2.38
0.72
19912 POPULATION^!
LLIONS}
223.7
85.3 199.8 119.1
627.9
DELS
1,031,666
221,656 577,272 3,913,820
5,744,414
DENSITY/
100 POP.
0.46
0.26 0.29 3.29
0.91
20. While the above data refers to regional and subregional aggregates, the recent report received from SONATEL of Senegal is typical of the current development in African countries. Telecommunications services in Senegal is provided by Societe Nationale des Telecommunications {SONATEL), which is an autonomous public enterprise providing both domestic and international service. In the last ten years, SONATEL has undertaken very aggressive development programme which more than doubled the installed switching capacity and virtually tripled the connected DELs from 19,856 in 1983 to 58,095 in 1992. In terms of penetration, the average DEL density increased from 0.31 in 1983 to 0.75 per 100 inhabitants in 1992 (Table 2).
21. Although the telephone density is used as an indicator to determine the level of telecommunications development in Africa, it is not in qualitative terms the best indicator of telephone distribution in a country, since it is only an average figure of telephones in the urban areas and those in the rural areas. The notion of accessibility has been introduced, one interpretation of which is the average distance to the nearest telephone in terms of kilometers or hours. However, in view of lack of appropriate data, a more practical indicator of accessibility is the availability of telephone services in the rural areas of a country.
1 UNTACDA II Subsectoral Strategies, Telecommunications (1990) 2 African Telecommunication Indicators, ITU (1993)
YEAR
1983 1984 1985 1986 1987 1988 1989
1990 1991 1992
TABLE 2
SENEGAL: 10 YEARS OF STEADY DEVELOPMENT
SWITCHI NG
CAPAC1T Y
LINES {a) 32,858 32,977 33,097 33,411 34,287 37,464 64,364
63,177 76,972 86,990
DIRECT EXCHANGE LINES CONNECTED
NUMBER (b) 19,856 21,082 22,163 23,586 26,548 28,933 36,166
40,413 48,469 58,093
Per 100 population 0,31
0.33 0.34 0.35 0.38 0,47 0.51
0.52 0.64 0.75
UTILIZATION OF
CAPACITY
(a/b}%
61.82 63.89 66.97 70.59 77.43 77.23 56.19*
63.97 62.97 66,78
COMMENTS
* Capacity almost doubled
Statistiques Annuelles des Telecommunications, ianvier-de'cembre 1992 - Avril 1993.
22. According to UNTACDA II objective 8: "Improvement of transport and communications in rural areas where the majority of the population lives and the greatest percentage of economic production takes place", which in the telecommunications objective XII means, "extension of services into rural areas", it is expected that the implementation of the UNTACDA It strategies and objective would achieve in year 2000 an improved and more equitable distribution of telephones between urban and rural areas. Table 3 shows the rather inequitable distribution of telephones in a sample of selected countries in 1992 as reported in their respective annual statistical reports.
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TABLE 3
DISTRIBUTION OF TELEPHONE SERVICES BETWEEN CAPITAL CITY AND THE REST OF THE COUNTRY IN SELECTED AFRICAN
COUNTRIES, 1992
COUNTRY
Cape Verde (Praia) Ethiopia (Addis Ababa)
Senegal (Dakar) Sierra Leone (Free Town)
Tanzania (1991) (Dar- es-Salaam)
CAPITAL CITY DEL'S
4,421 98,552
41,195 12,502
32,480
PCT TOTAL 36.9 70.1
71.0 90.7
41.7
REST OF COUNTRY DELS
7,561 41,966
16,900 1,275
4B,51O
PCT TOTAL 63.1 29.9
29.0 9.3
58.3
TOTAL COUNTRY TOTAL DELS
11,982 140,518
58,095 13,777
78,000
DEL/100 POP.
3.5 0.26
0.75 0.36
0.26
Source:
1) 2)
Cape Verde, Ethiopia, Senegal: Annual Statistical Reports, 1992 Tanazania: Staff Appraisal Report, World EJank, Report No.
11539-TA, April 2, 1993
3) Sierra Leone: SLNTC Quarterly Report, April-June 1993.
23. Considering that the capital cities generally account for less than ten per cent of the population in a typical African country, it is evident that telephone service accessibility is grossly skewed in favour of the minority. If telecommunications is to play its strategic role in Africa's economic development, it is essential that basic services be extended to the rural areas in order to support production activities.
24. One of the major constraints to telecommunications development in Africa is lack of investment finance which arises not only from the serious economic crisis in the region, but most importantly from the uncharacteristically high level of investment required to install one additional DEL in the African region. While the world average investment on additional DEL is US$1,500, a recent study carried out by the World Bank (RATDA) put the African average at twice the world figure. In some cases (e.g.
Ghana at US$64,423 in 1986) the costs are ridiculous, to put it simply (Tgfrlg 4).
TABLE 4
COMPARATIVE HIGH INVESTMENTS PER ONE DEL IN AFRICA
| COUNTRY
Algeria
—— .—.
Botswana Burkina Faso
1984 US$
6362
5197 30,167
1985 US$
2647
23,542
-
1986 US$
5312
47,667
—^———-^—-—___
35,276
Remarks Some incredible investment figures for years
I
1985-1986 1984-1986 Cameroon
Central African Republic Cote d'lvoire Ethiopia
Morocco Mozambique Niger
Nigeria Rwanda Zaire Zambia
18,468
7,392
10,397
9,800 10,013
21,581 43,933 4,327
698 882,703
12,245 25,022
64,423 14,736 2,6596
7,752
18,296 13,466 12,031 12,990 24,709
8,319 11,936
1
650,000
22,899 10,837 14,363 10,009
84,85-86 1986 1985 1985
1986
84,86 84,85 etc.
25 The above rates may be partly explained by the fact that Africa imports nearly all the equipment for the industry, and partly that the telecommunications industry in
AfTf^rrSed economies ofscaie to appiv'thus the
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2.2 Issues Arising
26. The key issues arising from the state of development of national telecommunications in Africa include insufficiency of services on the average, inequitable distribution between urban and rural areas, and under-utilization of investment.
2.2.1 Expansion of services
27. The high cost of expanding services must be recognized and strategies developed to reduce the marginal cost of a DEL. These strategies may include encouragement of private sector participation in development activities; mobilization of domestic resources for development; manufacture of at least the basic equipment (wires, poles, junction boxes, ducts) in Africa, benefiting from the regional economic groupings such as SADC, PTA/COMESA, ECOWAS, UMA, ECCAS.
2.2.2 Extension of Services to Rural Areas
28. Telecommunications operating organizations should provide services to rural areas where such services are economically viable. Where the Government in fulfilling national goals may require provision of telecommunications services to non-viable rural areas, the government should provide appropriate incentives to the telecommunications operator. A rural telecommunications development fund, administered separately from the operations of the telecommunications operator, may be set up for this purpose. Specific studies should be carried out on this issue.
2.2.3 Utilization of Capacities
29. As shown in the case of SONATEL, the rate of capacity utilization in Africa averages about 75% of the installed capacity, even though the expressed unmet demand is easily twice the installed capacity. This implies the need for better utilization of installed capacity, especially in view of the high investment required for an additional DEL. Future expansion programmes should balance all aspects {switching capacity, outside plant, maintenance, etc) in order to optimize investment.
III. REGIONAL AFRICAN TELECOMMUNICATIONS SYSTEMS
30. Africa's response to the regionalization of the World economies is the Abuja Treaty establishing the African Economic Community. It is a logical response to the need for regional cooperation and integration as the fundamental basis for achieving sustainable development of the continent made up of 52 mostly small nation states.
The protocols which have been drafted as steps in impiementing the Treaty include that on transport and communications. Efficient and reliable modern telecommunications in each country and among all countries is one of the pre conditions for integrating the African markets. The PANAFTEL Network and RASCOM are two regional programmes designed to facilitate African integration.
31. The Pan-African Telecommunications project (PANAFTEL) was initiated in 1971 in order to provide direct inter-connection among and between all African countries without the need for extra-continental transit. Twenty years later, this goal has not yet been fully achieved. However, heavy investment has been made by the African countries to realize the network in full recognition of the importance of integrated regional system in the collective effort towards achieving sustained development of the region.
32. The Regional African Satellite Communication System (RASCOM) became an independent enterprise in October 1993 after more than ten years of preparation, and will provide a satellite system to enhance the PANAFTEL terrestrial network to form a more comprehensive regional system. At the start, RASCOM will seek to pool all transponders which African countries currently lease on INTELSAT system, while evaluating the possibility of launching a dedicated African satellite.
3.1 Subregional Systems
33. The AEC is to be gradually built on the foundation of four subregional economic groupings which are to form the Regional Economic Communities (REC). The following sections summarize the status of telecommunications in each of the RECs as welf as the traffic among them.
3.1.1 Eastern and Southern Africa
34. The East and Southern Africa sub-region is composed of 18 countries. Twenty six (26) cross border terrestrial links are required to interlink the mainland countries, but only twenty one have been implemented and are operational. Of the remaining five, one between Tanzania and Uganda is under implementation. The Kenya-Somalia link is expected to be financed by ADB but implementation is being delayed clue to
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conditions in Somalia.
35. Financing is being sought for two inter-state links of Tanzania - Mozambique and Sudan - Ethiopia. The situation for Somalia - Ethiopia link is yet uncertain.
Except for Sudan and Somalia, all countries of Eastern and Southern Africa countries are connected to the PANAFTEL terrestrial networks. All the countries except Comoros, operate a Satellite earth station. Eleven of the 14 mainland countries operate on the 335° Satellite over the Atlantic Ocean Region, and some of these countries operate on the 60° Indian Ocean Region Satellite, to which also Djibouti, Somalia and the Island States operate. Thus there is good inter connectivity within
the sub-region.
36. With the exception of Comoros and Somalia, all countries in the Eastern and Southern Africa sub-region have established international telephone exchange centres based on both the analogue technology {Tanzania, Uganda and Swaziland and to some extent in Zambia and Zimbabwe) and digital technology in the rest of the countries.
The total capacity circuits is 22,657 of which only 11,419 (almost 50%) are connected, leaving unused capacity of 50% per cent as shown in Table 5.
TABLE 5
INTERNATIONAL TELEPHONE SWITCHING
SUBREGION: EASTERN AND SOUTHERN AFRICA (1988) Country
Botswana Comoros*
Djibouti Ethiopia Kenya Lesotho Madagascar Malawi Mauritius Mozambique Seychelles Somalia*
Sudan Swaziland Tanzania Uganda Zambia Zimbabwe
Total
Analogue Capacity
ccts
20 370 86 212 8880 9568
Connected ccts
20 340 59 133 5651 6203
Digital Capacity
ccts 1618
-
375 1900 892
1024 170 1024 624 500 320
-
3750
-
-
560 9900 22657
Connected ccts
1484
-
100 1280 603 375 50 375 312 384 263
-
327
-
-
177 4839
11419 Total Capacity 32225 ccts
Total Connection 17622 ccts
* Countries having no international exchange Source: RASCOM Study
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3.1.2 Central Africa
37. The Central Africa subregion has the most uncompleted terrestrial telecommunications network compared to the other subregions. Eleven cross border links are supposed to link up the eleven countries in the region, but only three(or 27%) cross border links have been implemented. Eight inter-state links have not been implemented and yet these links are vital in the completion of the subregional and continental terrestrial telecommunication network. These are:
(a) Gabon-Cameroon (b) Congo - Gabon
(c) Cameroon - Central African Republic (d) Congo - Central Africa Republic
(e) Congo - Cameroon (this link has been assessed as enviable technically and economically)
(f) Zaire - Rwanda (these are CEPGL projects) (g) Zaire - Burundi and
(h) Cameroon - Nigeria
38. As regards Satellite Communication, seven of the eleven countries operate on the 335° Atlantic Ocean Region Satellite, and Equatorial Guinea is to join the seven soon. Central African Republic (CAR) and Chad operate to the 325° Satellite so do Cameroon and Gabon, but interconnection between these countries is not possible due to different methods of modulation used. The problem is awaiting implementation of UDEAC project to re-arrange the domestic Satellite networks of Gabon, RCA and Chad to operate on the 359° Satellite. Three countries, Cameroon, Gabon and Congo together generate about 80% of the intra-sub-regionai traffic.
39. Due to operational and maintenance problems of the terrestrial networks in the sub-region, most of the traffic is and will continue to be carried via Satellite systems.
There are major problems in traffic routing due to lack of or poor network integration
on terrestrial and satellite systems.
40. All countries operate international telex exchanges, but four of them, that is RCA, Chad, Equatorial Guinea and Sao Tome et Principe do not operate international telephone exchanges as shown in Table 6.
TABLE 6
INTERNATIONAL TELEPHONE SWITCHING (CIRCUITS) SUBREGION: CENTRAL AFRICA (1988)
Country
1. Angola 2. Burundi 3. Cameroon 4. Congo 5. Gabon 6. Rwanda 7. Sao Tome et Principe 8. Zaire
Total
Analogue Capacity
488 187 1845 331
-
-
-
504 3355
Connected 427
186 801 228
-
-
-
275 1917
Digital Capacity
-
-
840
-
3680 4,520
Connected
-
-
571
-
1384 1,955 Total Capacity 7,875 ccts
Total connected 3,872 ccts (49.2%) Source: RASCOM Study
3.1.3 West Africa
41. The West Africa sub-region is made up of sixteen countries and the terrestrial network consists of 26 crossborder links out of which 20 (or 77%) have been implemented, and one between Senegal and Guinea is nearing completion. The five links yet to be implemented for various reasons are: Guinea - Sierra Leone; Guinea - Liberia; Guinea - Cote D'lvoire; Mauritania - Mali; Guinea-Mali.
42. The terrestrial links are augmented by fairly good satellite communication systems and a sub-marine cable linking Senegal, Cote d'lvoire and Nigeria. With the exception of Guinea Bissau, all the countries in West Africa have Satellite Earth Stations. Ten of the countries operate on the 355° Atlantic Ocean Region {AOR) Satellite; three on 325° AOR Satellite plus Nigeria and Cote d'lvoire which also operate on 355° AOR Satellite, thereby providing interconnectivity among all the West African countries.
43. Cote d'lvoire and Senegal are linked by Satellite with Kenya and Ethiopia.
Ghana is also linked with Kenya, thus providing correspondence between the West African and the East and South African sub-regions. Fourteen countries (except Sierra Leone and Guinea Bissau) have installed international switching centres as shown in Table 7.
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TABLE 7
INTERNATIONAL TELEPHONE SWITCHING (CIRCUITS) SUBREGION: WEST AFRICA (1988)
Country 1. Benin
2. Burkina Faso 3. Cape Verde 4. Cote d'lvoire 5. Gambia*
6. Ghana 7. Guinea
8. Guinea Bissau 9. Liberia
10. Mali
11. Mauritania 12. Niger 13. Nigeria 14. Senegal 15. Sierra Leone 16. Togo
TOTAL
Analogue Capacity
-
400 30 1535
-
-
-
-
-
-
-
-
2050 414
-
294 4723
Connected
158 30 347
-
-
-
-
-
_
-
1550 370
-
142 2597
Digital Capacity
705
-
-
2840
-
481 300
-
726 660 450 300
-
-
-
6462
Connected 376
378
-
241 140
-
291 414 243 168
-
-
-
2251 Total capacity provided: 11,185 ccts
Total connected: 4848 ccts(43%) Source: RASCOM study
3.1.4 North Africa
44. The five countries that form the North African sub-region {Algeria, Egypt, Libya, Morocco and Tunisia) have a total population of 113,652,000 and 2,702,570 Direct Exchange Lines giving a DEL Density of 2.30 DELs/100 inhabitants.
Telecommunications networks are far more developed in this sub-region than in any other sub-region in Africa. Technologically, the greater part of the network in the sub- region is the Crossbar exchange (61%), followed by digital system {37%} and the Manual exchanges which are used only in Algeria, Morocco and Tunisia and account
■for only 2% of the total capacity. All the countries have international transit switching centres with a total capacity of 39,721 trunk circuits of which only 16,159 circuits (41%) were connected, leaving 59% per cent unused capacity mainly from the digital exchanges (Table 8).
TABLE 8
INTERNATIONAL TELEPHONE SWITCHING (Circuits) SUBREGION: NORTH AFRICA ((1988)
Country
Algeria Egypt Libya Morocco Tunisia
TOTAL
ANALOGUE Capacity
4888 3275
-
7620 1831 17614
Connected 3350
2184
-
3272 1246 10107
DIGITAL Capacity
3200 726 1791 1791 16390 22107
Connected 1251
291 165 165 4345 6052 Source: RASCOM Study
45. The inter country transmission systems are made up of microwave radio links, coaxial and submarine cables. The coaxial and submarine cables provide connection to West Africa via Senegal and to Eastern and Southern Africa via Djibouti and Kenya.
TRANSCOM/692 Page 20
3.2. Intra-African traffic
46. The situation of the international network in the countries shows that, for the most part, these countries have very few direct intra-African links, the bulk of the network being constituted by satellite earth stations or HF links with Europe through which the inter-African traffic transit. Inter-subregional relations are still underdeveloped with circuits limited to few cases, as reflected in Table 9.
Region West North
East Central South Total
MATRIX West
833 38 11 90 3 975
TABLE 9
OF INTER-AFRICAN CIRCUITS (1988)
North 38 499 24 0 0 561
East 11
24 769 6 53 863
Central 90
0 6 101 2 193
South 3 0 53 2 1036 I094
Total 975 561 863 199 1094 9686 Source: RASC0M Study Volume 3.
47. The above Table shows that:
(a) The greatest number of circuits are used for intra (within the) sub- regional relations; for example 85.43% within West Africa; 88.94%
within North Africa; 89.11% within East Africa; 52.3% within Central Africa; and 94.7% within Southern Africa.
(b) The inter-subregion networks are still very much underdeveloped:
there is no circuit between the North Africa sub-region and Central Africa and Southern Africa sub-regions; only two circuits between Southern and Central Africa sub-regions; three circuits between West and Southern Africa sub-regions; six circuits between the Eastern Africa and and Central African sub-regions; and eleven circuits between the West Africa and East Africa sub-regions.
48. As regards international traffic, there is great disproportion between the intra- African traffic and extra-African traffic. In I986, the intra-African traffic represented only 15% of the total international traffic, while 85% was for countries outside the African continent (Table 10). This situation reflects the fact that African trade is still largely outward oriented.
Table 10
PERCENT DISTRIBUTION OF INTERNATIONAL TRAFFIC : 1986
SUBREGION Central
Eastern & Southern West
North
TO AFRICA 16.8
32.4 21.1 8.8
OUT OF AFRICA 83.5
67.6 78.9 91.2 RASCOM Study Volume 3
49. An example of the status in 1992 is the traffic pattern for Cape Verde [Table
HI.
TRANSCOM/692 Page 22
TABLE 11 CAPE VERDE
CAPE VERDE INTERNATIONAL CIRCUITS IN 1992
DESTINO Portugal U.S.A France U.K.
Italy Holand Senegal Total
SATELLITECIRCUITES 30
11 6
-
-
2 2 51
SUB-MARINE CABLE CIRCUIT 16
-
_
8 4
-
-
28
TOTAL 46 11 6 8 4 2 2 79
DISTRIBUTION OF INTERNATIONAL TRAFFIC (MINUTES) IN 1992
63,7
3.3 Issues Arising
3.3.1 Capacity Utilization
50. There exists a high level of unused capacity, both in the PANAFTEL Network and in the national switching centres. Appeals had been made in the past for countries to improve the utilization of existing capacities in Africa, all to little avail.
It is time to carry out a detailed study on the utilization in order to determine the fundamental problems which led to this under-utilization of facilities. This study should include an analysis of why African countries continue to use extra-Africa transit centres when those in Africa are under-utilized. Similarly, the low capacity utilization in the local exchanges should be carefully analyzed in order to optimize investment decisions in the future. Given the well-known high levels of unmet demand for service, the low level of capacity utilization implies imbalance in investment.
3.3.2 Completion of Missing Links
51. The cases of missing links between neighbouring countries have been studied at length (e.g. Central Africa region). With the establishment of the RASCOM Organization, alternative approaches to linking the countries should be explored as a matter of urgency.
3.3.3 Intra-Africa Traffic
52. The small intra-Africa traffic compared to traffic with countries outside the continent is a reflection of the economic and social ties within Africa and between Africa and the rest of the World. In fact, the 15% of total international traffic representing intra-Africa telecommunications traffic is far better than comparable trade figure which is about five per cent. Nevertheless, with improved technology and services, telecommunications sector could be a driving force for more intra-Africa trade as communications and information flow among countries increase. It is worth recalling that telecommunications is regarded as a strategic competitive factor in international trade.
TRANSCOM/692 Page 24
IV. TECHNOLOGY CHANGE
4.1 Status of Digital Technology
53. Telecommunications and related information technology are changing very rapidly with new and enhanced services which necessitate switching over from analogue to digital technology.
And there is no going back on this change. Indeed the debate is not about whether the new digital technologies should be adopted or not, it is basically on how the new technologies and new
services should be adopted such that the existing analogue technologies in which most African countries have invested so heavily can continue to be in uss while they strive to adapt, internalize and use the new digital technology.
54. While there are other technology changes with impact on the telecommunications industry, the development related to digital technology is certainly one of the most dominant. The African telecommunications organizations are in fact incorporating digital technology in their systems as fast as their resources can allow.
55. Many African countries have analogue systems as the backbone of their telecommunication networks with a good number installed in the mid 1930's. Thus, most of these networks are still in their useful economic period based on the normal amortization period of 20 to 25 years. But the problem the African countries face now is that the production of analogue equipment is being phased out by the manufacturers and spare parts are becoming increasingly difficult to obtain culminating in serious maintenance problems. The telecommunications industry is consequently faced with the need to change from the analogue systems to digital technology through the process generally termed product migration, and the cost of this change is high.
56. Realizing the inevitability of change, a number of countries started to introduce digital systems in their networks, such that out of the 5,1 35 local telecommunication exchanges in Africa, 483 or 9.4 per cent were digital in 1988 (Table 12). In terms of international exchange capacity, out of the total capacity of 5,212,733, approximately 29 per cent were digital. Twenty-eight countries have already started to introduce digital technology in their international transit centres.
TRANSCOM/692 Page25 Table12 DistributionofLocalExchangeSystems bvSubreoioninAfrica SUBREOION Eastand Southern West Central North Total Percent
AUTOMATIC STEP-BY-STEP Number 182 42 11 .... 235
Capacity 307205 57600 10448 — 375253 7.2%
CROSSBAR Number 254 395 97 496 1242
Capacity 486598 547363 157757 1946 302 3138 020 60.2%
DIGITAL Number 154 29 30 271 483
Capacity 242348 62844 48276 1157014 1510482 29.0%
MANUAL Number 124548 750 102 1003 3100
Capacity 86469 22967 9931 68620 187977 3.6%
OTHER(PABX) Number 66 9 — 75
Capacity 228 773 — 1001
TOTAL Number 1835 1.281 249 1770 5135 Source:UNTACDAII1991-2000,TelecommunicationsSectorStrategy
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57. One of the African countries which has started to introduce digital technology in its telecommunications network is Ethiopia:
Ethiopia has embarked on a planned and
systematic introduction of digital technology in its national telecommunications network.
For example during the years 1990/1991 and 1991/92 the number of subscriber lines connected to digital exchanges increased from 41,843 lines to 48,928 lines, an increase ot 7,085 lines or 17% per cent. In the
international telephone switching, a considerably larger growth of 20.4 per cent was achieved in traffic due to the introduction of the
International Direct Dialling (IDD) system. The whole of Ethiopian International Transit Centre is digitalized.
Ethiopia has started digitalizing the main urban areas and to transfer the replaced analogue equipment to the rural areas where they wilt be installed to provide a more superior service compared to the service provided by the manual exchanges. This arrangement offers the most economic method of introducing digital technology in the country while at the same time still continue to put to good use the existing analogue systems.
Source: Ethiopian Herald, 29 September 1993.
58. As regards the International Switching Exchange Capacity, Table 13 shows the rate of digitalization in 1988.
TABLE 13
INTERNATIONAL TRANSIT CENTRES (by Subregion) Rate of Digitalization (1988)
SUBREGION
Eastern and Southern Subregion Central Africa West Africa North Africa Total
Source:
Total/Installed (a)
31,225
4,195 11,185 36,261 82,866
Digital
(b|
20,612
2,340 6,162 21,381 50,495 UNfACDA II 1991-2660 -
CAPACITY Digitalization Rate
(b/a) x 100
66%
55%
55%
59%
61%
Connected Total
16,722
2,003 4,848 13,962 37,535
Digital Connected
(d)
9,985
111
2,083 5,761 18,606 TELECOMMUNICATIONS SECTOR STRATEGY
Unused Digital Capacity (1- d/b) x
100 40.3
61.2%
57.0%
58.7%
50.4%
59. Regarding transmission systems of the 240,532.30 km length of transmission, only 11,137.15 or 4.63% is digital microwave. The rest is either analogue microwave (46.36%), or cables (18.06%); overhead lines (9.82%) and Radio HF (19.10%).
Digitaltzation on the Transmission Systems is slower than in the Switching Systems (Table 14).
TABLE 14
TRANSMISSION SYSTEMS IN THE AFRICAN TELECOMMUNICATIONS NETWORKS - KM (1S88)
System Subregion
Western
Northern Eastern
Central Southern African Total Per Cent
Microwaves Analogue
43 043.5 15 645.9 18 107.5
11 311.1 23 400.9 111 508.9 46.36
Digital 3 615.40 2 671.40 2 158.60 809.45
1 882.30 11 137.15
4.63
Total
46 658.9 18 317.3 20 266.1 12 120.5
25 233.2 122 646.0
50.99
Cables
2 085.3 36 626.5 67.3
510.0 4 155.1 43 444.2
18.06
Overhead lines
11 992.0 0.0 2 851.0 135.0
8 632.5 23 610.5 9.82
Radio HF
9 969 0 0
28 530 7 443 45 942 19.10
Grand Total
70 705.2 54 943.8 22 914.0 41 295.5 50 673.8 240 532.3 100.00
Source: RASCOM Feasibility Study Volume 3
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4.2 Issues:
4.2.1 Diaitalization of the network
60. Digitalization of the network is inevitable. The implication is that a systematic programme for digitalization should be put in place in order to optimize use of investments in both the old analogue technology and the new digital technology.
Several studies have been carried out suggesting approaches to systematic digitalization.
4.2.2 Obsolescence of analogue systems
61. The high level of investment in existing analogue systems dictates that they should continue in use until the end of their economic life. However, as indicated, obsolescence is a serious problem as manufacturers abandon the technology, it is therefore essential to take measures, preferably on the basis of subregional and regional economic groupings, to negotiate with the relevant manufacturers to continue producing spare parts or licensing African enterprises to produce the spare parts for the installed analogue systems. A strong collaboration in the South-South framework of Technical Cooperation among Developing Countries (TCDC) is an alternative which should be seriously considered. In the same vein, the Ethiopian approach to digitalization, by moving old analogue systems to rural areas while replacing them in the urban areas with digital systems, merits a closer look.
4.2.3 Adopting New Technology
62. The existing unused capacity in both analogue and digital systems are cause for concern; the opportunity costs as well as the risks of obsolescence are high.
Specific studies should be undertaken on the issue of technology adaptation in general and of digitalization in particular. Previous experiences in Africa where too many different types of equipment were installed in the networks should call for
standardization of equipment.
V. DEREGULATION AND RESTRUCTURING
63. Deregulation, liberalization, privatization, market-orientation and restructuring are terminologies which have come into mode, especially following the official demise of the so-called command economy approach - the triumph of capitalism over socialism. These terminologies in general imply the opening-up of the economy so that any interested individual or group of individuals may be free to enter into a business activity.
64. As pertains to the telecommunications industry, the term deregulation has been used to mean the removal of rules and restrictions which used to govern the industry, that is, removal of regulations. In the same vein, liberalization means to set at liberty from restraints - i.e. to free from control. Market-orientation includes privatization and refers to commercial business operations as contrasted with the "Administration"
character of most African telecommunications organizations. Finally, restructuring literally means to create a new structure, a new framework.
65. Thus, deregulation and liberalization refer to the industry as a whole, while privatization, market orientation and restructuring normally refer to the organizational and management aspects. However, the concepts are linked: deregulation of the industry demands that existing organizations must be restructured in order to effectively operate in the new deregulated liberalized industry.
5.1 Deregulation
66. After thirty years of independence, it should be evident that government cannot, and indeed should not, do everything in the country. The "dirigist" approach to development has largely failed. Government should resume the task of governance and give responsibility to society to develop itself. Over-regulation and involvement of the State has instead tended to retard development.
67. In many African countries, telecommunications regulatory functions are carried out on behalf of the governments by the telecommunications operating entity as exemplified by the following:
TRANSCOM/692 Page 30
The Uganda Posts and Telecommunications Corporation is an independent institution, established by an Act of Parliament to provide postal and
telecommunications services within Uganda, between Uganda and the world and to regulate and control radio communications operated from or received in Uganda.
Source: Staff Appraisal Report, World Bank, Report No. 7437 - UG (Feb 21, 1989
68. The phenomenon of deregulating or liberalizing telecommunications and the intense heat of commercialization of telecommunications services, have all compounded the dilemma and problems of the African countries in their efforts to develop telecommunications systems and services, particularly because almost all the countries are stilt grappling with the basic issues of providing universal access to basic telephone services.
69. The proponents of liberalization contend that unregulated competition or the free market structure offers several economic advantages, for example:
it promotes the efficient management of telecommunication suppliers and operating entities;
forces prices to come closer to costs and enables consumers benefit from lower
rates;
encourages innovation and quality control;
increases the number of services and suppliers hence customers have expanded choice;
has positive effects on a country's economy by strengthening its position in the world market.
70. It is further argued that the information technology is beyond regulatory control, it cannot be managed, and that regulation has not kept pace with technological change and has a conservative bias. The carriers argue that regulation prevents them from operating their business in the most efficient manner possible, and that other regulatory restrictions slow down the adoption of new technologies and inhibit flexible responses to market demands.
71. While liberalization would open greater markets for industrialised countries and
traditional manufactures of equipment, the majority of developing countries on the other hand view the policy of uncontrolled liberalization as spelling disaster especially as most African countries are beginning to delve into the sacred area of local manufacture of telecommunication equipment in a bid to enhance their self-sufficiency and, secondly, they are grappling with the problems of providing telephone universally.
72. Several factors contribute to the fear of developing countries to the concept of unregulated liberalization among which are:
(a) Liberalization will allow manufactures and private operating agencies to enter into separate agreements with technology users in developing countries (the business and industrial sectors, banks, the NGOs etc.) to the detriment of national development priorities.
(b) In the area of international services, developing African countries will incur higher costs of administration of external routes and accounts as they will be forced to deal with many different international operating agencies.
(c) Efforts and achievements made by developing countries to standardise equipment and reduce maintenance and manpower costs will be wiped
out.
73. These fears are well founded since technological innovations have created a number of new configurations for competitive delivery of telecommunication services.
Technically four main types of competition exist, but they may be combined to create many possibilities:
(i) Brokers may purchase transmission capacity from a carrier and resell that capacity to the end user; they may also provide the interconnection with the telephone company network;
(ii) Resellers may acid enhanced services to their basic transmission capabilities; these value-added services would include computer processing of information;
(iii) New carriers could establish their own telecommunications facilities and sell their services in competition with the established carriers;
(iv) Finally, privately-owned networks which by-pass the public network could be established.
TRANSCOM/692 Page 32
74. These types of innovative technological possibilities have sensitive economic and political implications to developing countries and indeed would threaten the viability of the African telecommunication carriers since they would create pressures for them to drastically cut their prices and tariffs in order to compete with the above complex competitive methods. The latter two possibilities are especially troublesome for the fragile African telecommunications carriers, because they are specifically intended to by-pass the facilities of the public carrier and thereby avoid their interconnection and transmission charges. This sort of by-pass competition is a development that is completely not in the best interests of the public telecommunication carriers in developing countries and in particular African countries.
The gravity of this scenario should be viewed in light of the large investment which has been made by the developing countries and their telecommunications carriers and the associated heavy interest charged on borrowed funds for investment.
75. Uncontrolled liberalization may also have adverse consequences for consumers in the developing countries. Universal access is the cardinal objective and the cornerstone of the African telecommunications systems. However, without regulation
carriers may be reluctant to undertake unprofitable services such as the provision of basic services to rural and remote locations. There is also the fear that residential and rural tariff rate will escalate as costs are shifted to those who have no "technological by-pass alternatives". Thus basic service rates may increase to a point beyond the reach of many subscribers.
5.2 Restructuring
76. The institutional and organizational structures of most Telecommunications Administrations in Africa are generally similar, with slight variations. Most of the authorities for telecommunications sector are vested in the Ministries - either the Ministry of Transport and Communications, Ministry of Information and Telecommunications, Ministry of Works and Communications or Ministry of Posts and Telecommunications. Most are wholly government - owned statutory corporations or public parastatals. A few such as Gambia, Mauritius, Seychelles and Sierra Leone are companies but under the supervision of Ministries. Most are administered by a Board of Directors appointed by either the Head of State, or the relevant Minister.
The Boards operate under a Chairman who is also appointed by the Head of State or by the Minister. Thus the corporation essentially functions under the governance of the political authority.
77. The status of Telecommunication Authorities in Africa (Table 15) indicates that of the 50 countries examined in I988 only thirteen namely Angola, Cameroon, Chad, Equatorial Guinea, Gabon, Ghana, Liberia, Madagascar, Mauritius, Nigeria, Seychelles, Sierra Leone and Togo had recognised private operating agencies or companies. The rest were either the responsibilities of the Ministries or were recognised parastatals corporations or just departments. In I993, Rwanda opened up to a private operating company (RWANDA TEL S.A.). This makes a total of fourteen countries which have allowed private operating companies to compete with the national public telecommunications administrations.
