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Searching for a Dial Tone in Africa
By G. PASCAL ZACHARY
The New York Times
ACCRA, Ghana, July 3 The Internet bubble has long since popped
in the United States, Europe and Asia. But in parts of Africa
the Internet is serving as a powerful force for change,
primarily by allowing companies and individuals to make
international telephone calls far less expensively than through
conventional channels.
Calls in and out of sub-Saharan Africa have long been among the
world's most costly, strangling business opportunities and
burdening ordinary people. Services have been tightly controlled
by government-owned telephone companies, many of which are rife
with corruption and incompetence. Governments also imposed high
tariffs on international calls, seeing it as a lucrative source
of revenue.
But now, thanks to what is called voice-over-Internet, phone
alternatives are flourishing, sharply lowering costs and
expanding opportunities for business and consumers in some of
the poorest places on earth even as they pose a competitive
threat to government-sanctioned telephone companies.
Sending telephone calls over the Internet is gaining ground in
Africa because it makes possible a range of new services,
linking the sub-Saharan to the world's major industrial centers
in ways unimaginable only a few years ago. And better digital
connections, mostly via satellite, are raising the hope that
Ghana the most peaceful country in a West African region
besieged by civil wars and ethnic strife may become the regional
hub for an information-technology industry.
"As Ghana improves its connectivity to the outside world,
it has the potential to become for Africa what Bangalore became
for India," said Paul Maritz, a former senior executive at
Microsoft who recently visited Accra to survey the nascent
high-tech scene here.
Last Thursday, at a United Nations conference in New York, the
secretary general, Kofi Annan, delivered a message that
developing countries also need to include wireless access, known
as Wi-Fi, in building an Internet system.
"It is precisely in places where no infrastructure exists
that Wi-Fi can be particularly effective," Mr. Annan said,
"helping countries to leapfrog generations of
telecommunications technology and empower their people."
As the movement advances, though, many government-owned
telephone companies, which dominate wired service in most
African countries, are fighting a rear-guard action.
Internet telephony "is presented as the salvation for
business and society in Africa," said Oystein Bjorge, chief
executive of Ghana's national telephone carrier. "It is
not."
Mr. Bjorge, a Norwegian telecommunications consultant hired
recently to do battle against the Internet telephone services,
said it wreaks havoc with the economics of phone companies. Here
in Ghana, the national phone company is waging a sporadic
campaign against its own citizens who use the Internet to make
or receive telephone calls from America and Europe, periodically
turning off the lines of those suspected of doing so.
Three years ago, the government even jailed the heads of some of
Ghana's leading Internet providers. Though later exonerated by a
court, the dissidents fear another crackdown. "Internet
telephony is changing the whole power structure," said
Francis Quartey, chief technology officer of Intercom Data
Network and one of those jailed. "The dangerous thing is
that the power elite is responding out of fear and
ignorance."
Despite this opposition, American companies are experimenting
with new ventures in Ghana, seeing if enthusiasm for Internet
telephony can transform local technology entrepreneurs into a
force for genuine economic advancement.
For example, Rising Data Solutions, which is based in
Gaithersburg, Md., introduced a call center here last month,
where a dozen Ghanaians trained in American-style English are
trying to sign up customers in the northeastern United States on
behalf of a wireless phone company. At least three other call
centers are expected to open in Accra later this year, all
relying on Internet telephony instead of telephone carriers.
Internet telephony also aids companies like Newmont Mining,
which is searching for gold in Ghana, the second-largest gold
producer on the continent, after South Africa. To help manage
its operation, Newmont plans to link its operations within Ghana
to the wider world through the Internet.
Acquiring reliable phone service is essential, foreign investors
say, which is why they bypass the government-owned telephone
company. Ghana Telecom has an order backlog of more than 300,000
lines; bribery is the fastest indeed, usually the only way to
obtain new service. Even those with service suffer from frequent
failures and inaccurate bills. Roughly every other call results
in a busy signal, an indicator of what Ghana Telecom calls
"network congestion."
Under the circumstances, Internet telephony which has failed so
far to make serious inroads into the American telephone market
because of lower voice quality seems positively fabulous to many
weaned on Africa's creaky systems.
"Internet gives me control over my destiny," said
Sambou Makalou, chief executive of Rising Data. "My
business needs to be up 24-7; we can't get a busy signal."
Busy signals are common in Ghana because the public phone
networks are overloaded. As recently as four years ago, a dial
tone was among the scarcest resources in the country, which had
fewer than 200,000 phone lines in a nation of 19 million.
Few people realized how much demand for phone service was
waiting to explode until Ghana's most successful wireless
company, Spacefon, was introduced in 1996. Before it started,
executives thought the potential customer base was probably
3,000 people, at most 12,000. Seven years later, Spacefon has
more than 300,000 subscribers.
The country's total phone lines are now approaching 750,000,
roughly two-thirds of them wireless. But completing a call is
still difficult, especially between rival networks (there are
five), and neither Ghana Telecom, nor the country's legal
wireless operators offer a reliable connection to the Internet.
In response to these limitations, private businesses have built
scores of data networks, relying on satellite- and radio-based
Internet-access systems.
But telephone service became appealing because of the high
network costs: Companies typically pay from $2,000 to $5,000 a
month for a robust connection to the Internet, an enormous sum
when economic output per person is only about $400 a year.
"I'm paying $2,000 a month for Internet access, so I want
to use the technology to the fullest," said Austin Addo,
chief information officer of Ghana Link Network Services.
Mr. Addo's company, which began operations here early this year,
helps the government calculate duties on goods imported into the
country, relying on frequent updates, via the Internet, of
product values. The company's partner is based in Madrid, so Mr.
Addo uses a standard device to make international calls over his
computer network. He is not billed for the calls, which would
otherwise cost him roughly 75 cents a minute, including the cost
of line.
His telephone calls are not really free, since he pays $2,000 a
month for Internet access. But he is still saving lots of money
because he can speak as long as he wants without worrying about
the cost. "Five years ago to get this level of
communication," he said, "I'd have to fly to Spain
several times a week."
Such productivity gains have been a cause for celebration almost
everywhere in the world. But official anxiety over Internet
telephony is widespread throughout Africa and particularly rife
in Ghana. At a public meeting in May, held at the largest
Internet cafe in Accra, a regulator defended the government's
latest campaign against those who use the Internet to bypass
authorized telephone providers. "The players have been
apprehended or will be apprehended soon," said Bernard
Forson, deputy director of the National Communications Authority
of Ghana.
The government is not opposed to any particular technology, Mr.
Forson explained, but merely wants "regulated entities to
provide telephone service," not unlicensed and untaxed
wildcatters.
Other African countries face a similar quandary, aware of the
appeal of Internet voice service but fearful of its damage to
the state-owned telephone company.
Neighboring Togo, for instance, allowed Internet telephony until
the end of last year, when the government cracked down on behalf
of Togo Telecom. So many foreign calls in tiny Togo were being
routed over the Internet that a small "com" center
ubiquitous in Africa, offering calls for a fee took in $10,000 a
month from just two phones.
But some African countries have embraced Internet telephony as a
way to end decades of frustration. In Nigeria, for example, the
government has not officially approved telephoning over the
Internet but looks the other way, partly to ease congestion on
its authorized networks.
Still, the legal confusion surrounding Internet telephony has
prompted some to avoid it. Affiliated Computer Services, which
is based in Dallas, set up shop in Accra two years ago, relying
on a private satellite connection to the Internet that supports
both a data and a telephone network. Today, it is one of Ghana's
largest private employers, with 1,200 people and plans to hire
another 700.
While the company runs call centers in Jamaica, Mexico and
India, it does not intend to do such telephone work in Ghana.
"We can't use satellite lines" because of the brief
delay in hearing a response, said Tom Blodgett, the executive
who started the Ghana operation. And for now, he adds,
"there is no suitable wired alternative." A legal one,
anyway.
But for all their efforts to restrain the movement, African
telecom companies are probably fighting a losing battle.
"Periodically the police confiscate equipment or the telco
turns off phone lines," said Russell Southwood, a
London-based consultant and publisher of a weekly newsletter on
Africa's telecom scene, Balancing Act's News Update. "But
it's about as hopeless as Canute trying to turn back the
tide."
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