Challenges facing ISPs in Africa: a view from an African ISP

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Challenges facing ISPs in Africa a view from an
African ISP

• William Stucke
• AfrISPA
• ZAnet Internet Services

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• Challenges common to all ISPs
• Special Challenges faced by African ISPs
• Response to Challenges
• Relationship with Telco's
• Opportunities

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Challenges common to all ISPs

• Cost of bandwidth carrier services
• Continual investment in infrastructure
• Highly competitive market
• Discretionary consumer business spending
• Low margins

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Special Challenges faced by African ISPs

• Telco monopolies uncooperative incumbents
• Lack of competition among Telcos
• Delays in supplying lines carrier services
• Inhibiting Legislation
• Extremely high cost of international bandwidth
  (pay for both legs)
• High cost of local carrier services
• Distance from the centre of the Net

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Special Challenges faced by African ISPs - 2

• Lack of trust and cooperation among local ISPs
• Lack of local IXPs
• Cost of imported hi-tech equipment high
  taxation
• Availability of imported equipment
• Purchasing parity and foreign exchange
  restrictions and fluctuations

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Special Challenges faced by African ISPs - 3

• Lack of education among potential users not
  only computer literacy, but literacy itself
• Limited technical capacity lack of skilled
  engineers
• Brain-Drain engineers get experience and then
  leave Africa for the West

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Rising to the Challenge

• ATU
• AfrISPA
• Incumbent Telcos
• Joint Efforts

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Rising to the Challenge - ATU

• Improve legislation enabling, not restricting
• Fully independent and powerful Regulators in
  every country
• Effective regulation of Telcos prevent abuses
  of power
• Introduce competitive Telcos
• Dont charge duty on imported equipment give a
  rebate
• Fully liberalise VoIP in all African countries

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Improving Legislation

• Restrictions on who can provide international
  connectivity, and how
• Restrictions on wireless local links
• Licensing of ISPs
• Restrictions on use of VoIP
• Restrictions on use of technology

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Rising to the Challenge AfrISPA

• Foster ISPAs in all countries
• Encourage building of local or national IXPs
• Training workshops
• How to form an ISPA
• How to build operate an IXP
• PAVIX to provide better connectivity among
  IXPs in African countries

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Rising to the Challenge Joint Initiatives

• Educate legislators and regulators
• Enact enabling legislation / provide regulatory
  dispensation to facilitate earth stations for
  PAVIX
• Dialogue with incumbent Telcos
• Improved and increased dialogue between the ATU
  and AfrISPA

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Rising to the Challenge Telcos

• Recognise ISPs are your best allies, not a threat
• Internet usage is an enormous force for economic
  growth, especially in the ICT sector, and Telcos
  benefit directly from this. Internet usage is
  still growing at gtgt 50 per annum in Africa
• For every 1 earned by an ISP from dial-up
  customers, the Telco earns 6 from call charges,
  plus line rental charges from both the ISP and
  the customer, who frequently installs a first or
  second line, or upgrades to ISDN or better

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Rising to the Challenge Telcos 2

• Over 50 of new leased line installations are
  ordered directly or indirectly by ISPs
• VoIP allows far greater efficiency in local and
  international carrier capacity usage, which leads
  to revenue gain due to increased traffic which
  gives greater utilisation, rather than a direct
  loss of revenue due to alternative supply

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Opportunities

• Leapfrog the West skip over their 15 years of
  development
• Implement World Class networks now
• Gigabit networks rather than Megabit networks
• PAVIX move the centre of the Net to Africa

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Pan African Virtual Internet Exchange - PAVIX

• IXP in the sky
• Four countries so far
• Satellite link in each country, from each IXP, to
  a single satellite
• Shared infrastructure, shared costs
• Direct connection between countries

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PAVIX

• Eliminate huge International bandwidth costs
• Increase speed and capacity of African
  communications
• Foster development of local content
• Foster intra-African trade, e-commerce,
  e-medicine
• Peer as an equal with USA, Europe
• Pay for only one half-leg of international links