[APCPress] APC Press release: SAT-3 REINFORCES MARKET MONOPOLIES IN AFRICA – STUDY

[Frédéric Dubois]

NO EMBARGO
PRESS RELEASE


SAT-3 REINFORCES MARKET MONOPOLIES IN AFRICA – STUDY

Johannesburg, South Africa, May 15 2008 -- A study examining the impact 
the SAT-3 fibre optic submarine cable has had on telecommunications in 
four African countries has found that the potential of the cable has not 
been properly exploited.

Instead, ownership of the cable by telecoms incumbents in the countries 
researched has reinforced their market positions.

The study, conducted by the Association for Progressive Communications 
(APC), set out to analyse the effect ownership of the South Atlantic 
3/West Africa Submarine Cable (SAT-3/WASC) has had on the communications 
markets in Angola, Cameroon, Ghana and Senegal. It focused on the 
‘Africa section’ of the submarine cable – running along the west coast 
of Africa down to southern Africa – with a specific emphasis on access 
and cost.

Amongst other things, the study found that:

•    The cost of internet access to consumers has decreased over time. 
However, this has not been to levels anticipated by the market. While 
the cost of international calls and international bandwidth has also 
decreased -both for SAT-3 and for the satellite alternative– this has 
also frustrated market expectations.

•    The markets for internet and international services in each of the 
countries have experienced an increase in the number of legal and grey 
market operators providing services, and the ensuing competition has had 
a positive impact on reducing prices.

•    While a review of the telecom regulation and laws of countries such 
as Angola and Senegal gives the impression that their telecom markets 
are (for the most part) fully liberalised, in reality, this is not the 
case. With the exception of Senegal’s incumbent Sonatel, none of the 
other signatories to SAT-3 studied as part of this research were 
privatised.  These 100% government-owned entities often constitute a 
conflict of interest in the markets that they operate in and (usually) 
dominate, impeding sector reforms and constituting operational bottlenecks.

•    In all the countries studied the SAT-3 signatory is the largest 
user of its capacity. In Cameroon, Camtel is estimated to use 
approximately 50% of Cameroon’s allocated capacity, which corresponds to 
more than 80% of all capacity used in the country.  The bulk of the 
remaining capacity is used by only a handful of large companies that are 
connected directly to the cable.

•    With the exception of Ghana’s incumbent Ghana Telecom, all other 
SAT-3 signatories studied in this research are legally the sole 
providers of international connectivity in their countries.

•    This scenario, in most cases, constitutes a ‘reinforced monopoly’ – 
state-owned operators who are sole providers of international 
connectivity in un-competitive markets face little incentive to offer 
fair access and prices to other operators and consumers.

The study recommends fresh measures to liberalise the telecommunications 
markets in the four countries, with the specific aim of opening up 
access to SAT-3 to more operators, so that its real potential can be 
realized in Africa.

The study which consists of a briefing that synthesises the results of 
the four country studies from Angola, Cameroon, Ghana and Senegal, plus 
the full case studies, can be downloaded from 
http://www.apc.org/en/pubs/manuals/openaccess/africa/apc-sat3-study

The briefing will be translated into French and Portuguese shortly.

For more background information on SAT-3/WASC and opening up affordable 
bandwidth in Africa, visit http://www.FibreForAfrica.net

ABOUT APC

The Association for Progressive Communications (APC) is an international 
network of civil society organisations dedicated to empowering and 
supporting groups and individuals through the strategic use of 
information and communication technologies (ICTs), especially 
internet-related technologies. APC and its members in more than 30 
countries pioneer practical and relevant uses of ICTs for civil society. 
APC is an international facilitator of civil society's engagement with 
ICTs and related concerns, in both policy and practice.

Our network of members and partners spans the globe, with presence in 
Africa, Asia, Latin America, Western, Central and Eastern Europe and 
North America. APC: http://www.apc.org

FOR FURTHER INFORMATION

Dr Abi Jagun
Research Fellow
University of Strathclyde
40 George Street
Glasgow G1 1QE United Kingdom
Tel: +44.(0)141.548.3618
Fax: +44.(0)141.552.6686
Email: abi at apc.org