STATEMENT BY THE SECRETARY GENERAL OF AFRICAN TELECOMMUNICATIONS UNION, MR. JAN MUTAI, AT THE GIIC AFRICA COMMUNICATION CONFERENCE

· Chairman
· Distinguished Participants
· Fellow Speakers
· Ladies & Gentlemen

It is great honour for me and indeed ATU to be invited to make a statement at this conference. The theme I was asked to speak on, "The Challenges of building an affordable communication infrastructure for Africa", is quite appropriate as it falls within my present job description as Secretary-General of ATU. I would probably want to amend it a little and also touch on the 'accessibility factor'. Africa has both 'universal access' and affordability challenges.

Mr. Chairman, the African telecom market is a fragmented one. It is delineated along the boundaries of the 54 countries on the continent. It is served by a multitude of policy and regulatory regimes. The players in each market are few and generally are monopolies or partially privatised but with large market dominance. The ownership of these telecom entities is progressively converting to private sector in the higher per capita countries. As a consequence of the few players, there is little price competition especially in the fixed networks. A further characteristic of the market includes use of obsolete technologies in many networks maintained by relatively low skilled staff. Past funding modalities when telecom entities were government owned have worked against network reliability. Each 'donor' had conditionalities that promoted their home industries rather than fund procurement of open standards equipment from elsewhere.

Mr. Chairman, despite past difficulties Africa today presents the largest untapped market potential, offering clearly above average returns to the investor. Filling the gap between where Africa is at the moment (2% teledensity) and the global average (10% teledensity) provides an opportunity for installing over 60 million new telephones (present level around 17 million). At an average installation of $ 1,000.00 per line, it translates to $60 billion investment opportunity for equipment vendors and contractors. Furthermore given the proceeds per line in the continent stand at $1,000.00 per line per annum, the operators are guaranteed to reap reach rewards for their initiatives in expanding networks. With such potential, the key issue for Africa, in this regard, is market structure. The telecom markets need to be transformed and integrated into fewer blocks of, say, six instead of 54 as at present. These could be along the six Regional Economic Communities of OAU (SADC/COMESA/EGAD/ UMA/ECCAS/ECOWAS). The number of players also needs to be increased substantially so there is effective competition at all levels, from village level, through urban centres to the national and regional levels. Furthermore new technologies based on multi-media digital platform can save costs of having to construct separate network for voice, data, video and text. They also allow more non-traditional players to enter the telecom market and thus assist in lowering cost of access barriers.

Mr. Chairman, over half of the African countries have implemented reforms on their telecom markets and now have separation of powers for policy making (which remains in the ministries for communications), for regulation (now charged to an autonomous entity) and operation and service provision. These operators are also being progressively privatised. In the countries that have gone the whole way, the benefits of liberalisation and privatisation are beginning to be enjoyed by their citizenship. This strategy which was well articulated in the '1996 ITU African Green' has full support by governments in Africa and is being progressively implemented. However further negotiations are necessary to put in place the policy and regulatory frameworks for creating the larger market blocks within the context of the regional economic communities. The eventual output of such negotiations will be treaties that will progressively integrate the markets and provide basis for establishment of regional institutions for market regulation and dispute resolution. The new regional regulatory entities will be challenged, along with their counterparts in the national markets, on the issue of inter-connection of different networks in the era of technology convergence. Use of peering hubs/telehouses to link different players will be a platform they have to be familiar with very quickly. And in order to support multitude of players of different sizes, establishing inter-connection principles and practices at village level will enable faster universal access to information and communication (and reverse expansion of the growing digital devide).

Mr. Chairman, spectrum is a scarce and highly useful resource that lends itself as priority agenda for regional co-operation and harmonisation. Judicious use of radio spectrum will result in the multiple re-use of the same without interference. With the global preference for networks that connect people rather than places, demand for seamless mobile connectivity is growing very rapidly. Consequently more mobile networks are being deployed. Before long, fixed networks will become the 'value-added network' and mobile the 'basic services network'. From another perspective, use of data (or TCP/IP) over mobile networks is enjoying phenomenal growth as well. Thus the type of network the policy makers and regulators need to concern themselves in allocating spectrum is that providing multi-media mobile data services.

Mr. Chairman, 'way leave owners' like Railway corporations, Powerline companies and water/petroleum pipeline companies have resources that can provide the communication bandwidths, for a variety of telecom players. With proper incentives they can string fibre-optic cables along their tracks and provides backbone bandwidth services for mobile operators, Internet service providers, broadcasters and fixed telecom providers as well. Thus they will service their own internal communication requirements and sell surplus capacity if the necessary regulatory framework for inter-connection is in place.

Mr. Chairman, Africa has a relatively young population compared with other continents. Given education and training, they can build accessible and affordable communication infrastructure that is required. The new information and communication technologies offer immense opportunities for alternative, universal and often cheaper ways of accessing information and knowledge. A deliberate capacity building programme on a regional basis linked with a common certification and accreditation system will deliver the competencies that Africa needs.

Finally, Mr. Chairman, we are living in an era of rapid change at personal, national and global levels. The major change agent is the digital technology which has ushered in the information and knowledge revolution. It has accelerated technology convergence and catalysed trends for globalisation, liberalisation and privatisation. Africa is therefore challenged to review its choices and priorities in the use of often-scarce resources. A rational approach for doing this is the process of masterplanning. Thus in order to build accessible and affordable communication infrastructures in Africa, we must avoid past haphazard action by instead establishing processes for formulating Information and Communication Technology (ICT) Masterplans at national, regional and continental level. Africa has the experts to do the job but now needs to strengthen the regional and continental institutions for them to deliver the much needed results.

Thank you.