Africans skeptical about new telecom deals

By John Yarney

IDG News Service

Telecommunications users in Africa are skeptical that recent developments in the sector will bring substantial improvements in quality of service.

“We have heard words all this time and little action, what shows we are going to see anything?” said Martin Atta-Fynn, a partner with financial services company Deloitte & Touche Ghana, based in Accra, and a frequent commentator on telecom issues.

The African continent has recently seen a spell of new telecom infrastructure contracts and other developments in the sector. In April, the federal government of Nigeria signed six contracts totalling US$156 million with six companies for the expansion of the Global System for Mobile Communications (GSM) network of Nigerian Telecommunications PLC (NITEL). Pentascope International of Netherlands, meanwhile, has won a three-year contract to manage NITEL for the Nigerian government.

In East Africa, Gilat Satellite Networks Ltd., partners of Gilat Alldean (Africa) Ltd., said it is entering the Kenyan market this year, after being granted a license last year.

In South Africa, a consortium led by Hallo Technologies, civic groups, businesspeople and community groups has been formed to bid for one of 10 licenses to take telecom into rural areas. Similar developments have taken place across Africa.

Users have a wish-list catalogue of what they would like to see come out of these developments.

“As a business user myself, if I can get cost-effective (service) and quality in terms of speed, with no clashes of data on the line, I will be a happy person,” Atta-Fynn said.

Users want a reliable system that is affordable and secure, according to Robert Adjaye, a partner at Ernst &Young Ghana in Accra who is a consultant on IT issues. But users are cynical that these developments will bring any change, he said.

“There is skepticism, because there is the perception that everything takes a long time to be operational in our part of the world. Maybe in the long run it may happen,” Adjaye said.

Users ascribe an array of reasons for this activity on the telecom front. According to Adjaye, the main drive has been the recognition by African governments of the pivotal role communications plays in national development.

“There is the realization that they have to move or be left behind,” he said. Also, governments have realized that if any country wants to attract foreign investment it has to improve infrastructure, including telecom, Adjaye said.

Users list a number of things they think must change for them to enjoy the benefits of a good telecom service.

Deloitte & Touche’s Atta-Fynn thinks governments should detach themselves from directly running telecom companies.

“The activity is a lot more on the political scene, executive scenario; we want to see it on the engineering scenario,” Atta-Fynn said.

Ernst & Young’s Adjaye, on the other hand, wants the regulators to enforce rules. “The regulatory framework in many cases is appropriate, but it will not translate to anything if we leave it to run by itself,” Adjaye said.

Justine White, a partner with the South Africa law firm Edward Nathan & Friedland (Pty.) Ltd. who specializes in telecom regulation, agreed.

White painted a somewhat gloomy picture of the regulatory environment in Africa in February at the Digital Africa Summit.

“There is no doubt that having a strong regulator contributes to universal access,” she said. “Having a correct regulatory framework makes it possible for government and the private sector to come together to give solutions that work,” White said. However, strong regulatory oversight is not found in every African country, she added.

Two months later, White said not much has changed, though additional competition in some countries may lead to faster growth of services. “Telecom users should be optimistic in countries where additional licenses have been granted.”