[afnog] Challenges in the African Continent

[Mark Tinka]

On Monday 30 March 2009 02:41:11 am SM wrote:

> I used demand as more than the desire for more bandwidth.
>  There is also the ability of the market.

The market is bursting at the seams. Unfortunately, the 
infrastructure is not yet quite ready to support it.

>  I agree with
> your points about what limits growth.  The cost the ISP
> has to pass to the customer is much more as points A and
> B requires a sizable investment.

Yes, but when compared to the running costs that go into 
operating leased satellite capacity, the long term benefits 
of submarine systems allow operators to significantly reduce 
cost in lieu of the much-increased capacity they are now 
dealing with.

Economies of scale... for submarine systems, the cost per-
bit is lower with each increase in bandwidth.

> Either the market pays
> the price or else someone else has to step in to address
> point C.

The only ways to address high bandwidth prices are to use a 
more scalable and cost-effective infrastructure medium and 
to increase competition (both at the ISP and cable system 
level).

More cables and more operators means better pricing, better 
quality, better reliability.

With two of the three key cable systems going live this 
year, I'm hoping there'll be further investment for even 
additional cable systems in the region in the coming years.

> The original message, if I understood correctly, was also
> about local connectivity.  There are two drivers that
> influence connectivity, consumers and content.

Yes, but local content can also be built in English, or 
French. If there is demand for other native languages, 
content in those languages will emerge.

But what we need to address now is; how do I get a reliable 
local loop to my ISP? In preparation for the TEAMS, SEACOM 
and EASSy cable systems, a number of countries are beefing 
up national infrastructure, but this will take a while as 
there's lots of ground to cover. Dial-up and wireless 
solutions will continue to be more prevalent in the interim.

The issue of carrier-neutral data centres is one that also 
needs to be looked at, particularly as the opportunities the 
cable systems bring become more feasible.

> We can skip the copper generation.  We don't have an old
> infrastructure that is preventing the deployment of new
> technologies.

I'm not sure we can say the same for most countries in the 
region.

> As an ISP, you get to define the market.

But regulation in some countries prevents ISP's from 
building out their own infrastructure. South Africa just 
deregulated, as Graham mentioned, so as long as an ISP has 
the right license, they can build out. Other countries too.

But in some other economies, only the incumbent can build 
out. And we know how well that goes...

> I am not saying that lack of growth is good.  My point is
> that the evolution of the Internet over the years has
> been spurred by innovation which have driven demand for
> more connectivity.  When there is a void, there is scope
> for new business opportunities.

Yes, but right now, Africa has to sort out a fundamental 
infrastructure problem. Dilapidated copper, non-existent 
fibre, old switching equipment, lack of coverage, expensive 
satellite bandwidth, outdated regulatory regimes, political 
interference, e.t.c., all need to be addressed before Jane 
and Jon can start to feel creative.

It's happening...

> I asked about the benefits of hosting locally.  If it is 
> cheaper to host in some other country, people will choose
> that.  There are already established facilities that have
> economy of scale as an advantage.

Which is what has been happening. However, we need to 
encourage more attention toward local hosting, which is why 
we've been talking about exchange points at various fora for 
many years now, and a number of folk have been involved in 
helping establish the same in several African markets.

Will it happen overnight? Probably not... baby steps.

> Coming back to your paragraph about the fix, I think that
> the big picture is not well understood by everyone or
> else we would hear more suggestions about how to fix the
> real issues.

The problems are well-understood. The suggestions have been 
flowing in.

The fixes require money and such resources. That's as far as 
I can go :-).

> That's a convincing argument.  If we have more concrete
> examples, like the one you gave,  it can foster growth to
> the benefit of both ISPs and customers.  You mentioned
> deregulation.  I think that there is over-regulation in
> some areas.

Agree.

> WiFi was mentioned in this thread.  A coffee shop can
> attract more customers by offering free WiFi access. 
> This can have a positive effect on other areas of the
> economy.  If the existing regulation categorizes the shop
> as a service provider, it acts as a disincentive.  When I
> say over-regulation, I mean that if we have regulations
> too soon, we inhibit the growth of a technological
> sector.

Regulation will work if there is dialogue between the 
regulator and the industry. A lot of regulators are 
frustrating. A lot of regulators are frustrated.

Of course, we don't want the regulator to be too liberal 
that coffee shops are now classified as operators simply 
because they can hook-up an ADSL modem to a wi-fi access 
point, but they need to understand how to create a climate 
where competition is healthy, innovation is rife and Jane 
and Jon end-users are taken care of.

> As the market grows, it's easier to make a case for more
> national infrastructure.

Some may see this is case of "hen, where's egg?"

But I think that the infrastructure should come first. How 
else do you expect to get customers if they have no options 
as to how to connect to the ISP?

We already have examples of folks traveling miles to use a 
phone or send an e-mail. The market is there.

The fast growth in mobile networks in Africa means even the 
very slow GPRS offers a little help in sending an e-mail or 
an IM. But we need more...

> Creating a spillover effect
> will help other countries in the region move forward.  If
> these countries get together, there is a larger market
> which means more revenue to offset the capital outlay for
> a submarine infrastructure.

Agree.

Cheers,

Mark.
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