Africa’s data transmission capacity is limited by poor infrastructure. As a result of inadequate terrestrial networks much inter-African communication is expensively routed, often via satellite, through Europe and North America. The ownership and management of sub-Saharan Africa’s only submarine cable benefit national telecommunications companies. This restricts competition and denies Africans affordable access to international telecommunications services, including the internet.

A paper from the Association for Progressive Communications (APC) and the University of Strathclyde Business School, in the UK, analyses the impact of the South Atlantic 3/West Africa Submarine Cable (SAT-3/WASC) on communications competition in Angola, Cameroon, Ghana and Senegal.

SAT-3/WASC is a pair of optical fibre submarine cables linking Portugal to South Africa, with connections – known in telecoms jargon as ‘landing stations’ – in nine West African countries. It started operating in 2002 and is owned by a consortium of 36 state-owned and private telecommunications providers from 35 countries.

At the time of its conception the African participants in SAT3/WASC were monopolies. Local laws guaranteed their privileged positions as sole providers of international communications and owners of the terrestrial network. Through their participation in SAT3/WASC they became monopolistic operators of the landing station. Often, they were also the only operators legally allowed to carry international data into and out of their countries.  In addition, these operators also had the most (geographically) comprehensive terrestrial network. They were therefore able to extract significant rents from their infrastructure.

However, there are now more service providers in each country who need access to the capacity offered by the cable. They are being frustrated by the non-competitive behaviour of SAT3/WASC consortium members, who have little incentive to increase traffic. Three new submarine cables along the African coast will potentially enter into service by the end of 2009. This increases the urgency for governments to learn from the challenges posed by SAT3/WASC.

Researchers found evidence of increased competition and largely positive effects of the cable in terms of bandwidth capacity. However:

• The cost of bandwidth has not declined nearly as fast as anticipated.
• In the first years of operation the costs of SAT3/WASC bandwidth were often the same as or more expensive than satellite bandwidth.
• In Angola the wholesale price of bandwidth has gone down but prices paid by end-users have only decreased marginally and more slowly in comparison.
• The Cameroonian partner only sells bandwidth in massive quantities and at prices local internet service providers cannot afford.

APC argues for wider liberalisation of telecommunications markets. Only by opening up access to more operators can the potential of SAT-3 – and other fibre optic cables being planned along the coasts of Africa – be realised. Governments have an opportunity to create opportunities for fair and low cost telecommunications access upon which Africa’s global competitiveness greatly depends.

A person living in Europe or North America has access to 570 more bits (smallest unit of computer memory) of bandwidth than someone living in Africa. If Africa is to catch up, it is important for governments to:

• guarantee all operators (current and future) access to capacity without undue distortion
• ensure access to facilities is unconstrained and at a fair price
• set up mechanisms to secure low prices for end-users
• ensure landlocked countries are not disadvantaged
• stop focusing investment in capital cities and improve rural telecoms infrastructure.

Source(s):
‘The Case for “Open Access” Communications Infrastructure in Africa: The SAT-3/WASC cable – A briefing’, Abiodun Jagun, Association for Progressive Communications, 2008 (PDF) Full document.
‘The case for Open Access communications infrastructure in Africa: impact of international submarine cable infrastructure [SAT-3/WASC] in four African countries’, Association for Progressive Communications, by Abi Jagun, 2008 Full document.

id21 Research Highlight: 13 August 2008

Further Information:
Association for Progressive Communications (APC)
PO Box 29755
Melville 2109
South Africa

Tel: +27 11 7261692
Fax: +27 11 7261692
Contact the contributor: abi@apc.org

Association for Progressive Communications

Abiodun Jagun
Department of Management Science
University of Strathclyde Business School
Glasgow
UK

Tel: +44 141 5483618
Fax: +44 141 5526686
Contact the contributor: abi.jagun@strath.ac.uk

Department of Management Science, University of Strathclyde Business School, UK

Other related links:
SAT-3/WASC/SAFE

'Free and open source software in sub-Saharan Africa: development through information'

'The future of telecoms: availability, accessibility and affordability'

'Protecting the internet as a global public good'

'Expanding broadband and wireless telecommunications networks'