<h1>Regulation, monopoly, hinders Africa interconnection
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<a href="http://news.idg.no/cw/art.cfm?id=0CA54BB4-1A64-6A71-CE297BEA7C7A7D4F">http://news.idg.no/cw/art.cfm?id=0CA54BB4-1A64-6A71-CE297BEA7C7A7D4F</a><br>Rebecca Wanjiku
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10.08.2011 kl 15:55 | Computerworld Kenya</div>
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<p id="artLead" class="articleMagazineLeadText">Stringent regulation and
taxation issues between countries have stymied the drive for affordable
connectivity as regional companies seek ways to offer services beyond
borders.</p>
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Stringent regulation and taxation issues between countries have
stymied the drive for affordable connectivity as regional companies seek
ways to offer services beyond borders.</div></div><div class="bodyText"><div id="artBody">
<p>Telecommunications firms in the region have been accused of failing
to lower connectivity costs even after the entry of fiber-optic cables
bolstered infrastructure in the region. Carriers say, however, that
cross- border connection policies and vandalism of fiber cables have
added to the cost of laying infrastructure, keeping costs high. </p>
<p>Sub-Saharan Africa is now connected with six fiber-optic cables and
extensive terrestrial fiber, but landlocked countries have been unable
to enjoy affordable services because governments demand license fees,
tax and other fees before allowing companies to offer services from one
country to another, according to industry insiders.</p>
<p>"It may be because of lack of understanding of Internet business but
some countries insist that fiber operators crossing the border must pay
license fees, which is some cases is prohibitive," said Muriuki
Mureithi, CEO Summit Strategies, a research firm based in Nairobi.</p>
<p>Muriuki, who was presenting at the Africa Peering and Interconnection
Forum in Accra, Ghana, said that some governments insist that because
the telco is importing capacity from one country to the other, then it
must attract applicable taxes and Value Added Tax, which makes the cost
higher than satellite services.</p>
<p>In some cases, governments appoint a fiber operator and insist that
any transaction must pass through that operator. In Ghana, MTN has laid
fiber to the border with Togo but it can not offer cross-border
services.</p>
<p>"We have laid fiber up to the border with Togo, we can not cross over
and offer services because Togo Telecom has not laid its fiber in
readiness for interconnection," said Richard Densu, Acting Executive,
MTN Business, Ghana.</p>
<p>In West Africa, there is extensive fiber laid but interconnection
costs are still high, due to a lack of competition among cross-border
link providers as well as the high cost of national capacity and local
hosting.</p>
<p>"There are few wholesale/carrier licenses issued and in some cases
discrimination against new entrants, including alternative
infrastructure providers," said Mike Jensen, an independent consultant,
who has been involved in setting up IXPs in Africa.</p>
<p> </p>
<p>In his presentation at the peering forum, Jensen said that
alternative infrastructure providers such as electric power or transport
utilities are at times unaware of market trends, charging higher prices
when telcos want to use the power or transport lines to lay fiber.</p>
<p>While regulation and taxation has inhibited cross-border fiber
connections, companies that can lay and sell fiber often have monopoly
positions, keeping prices high.</p>
<p>In Malawi, the cost of connecting Blantyre, the commercial capital,
and Lilogwe, the capital city, is $1,000 per megabyte, which has made it
harder for Malawi IXP to set up a POP in Lilogwe.</p>
<p>"Malawi Telecom operates the fiber link between Blantyre and Lilogwe
and it will be very expensive for the IXP to pay -- we are in
discussions with Malawi Telecom, which peers at the IXP, to explore ways
to interconnect affordably," said Paulos Nyirenda, coordinator at SDNP
Malawi, a government program dealing with Internet and information
services.</p>
<p>Nigeria poses a unique case, since there is more than one terrestrial
fiber provider, yet the cost of interconnecting between Lagos and Abuja
is more expensive than the cost of international transit to London.</p>
<p>Nigeria also has the problem of "community boys" who are people from
the local areas that expect to be paid in order for the fiber to pass
through the area. Failure to pay might delay the project.</p>
<p>"We have had to change the location of Nigeria IXP to a street where
all telcos were able to interconnect, which boosted the content;
however, there are other costs that are not for seen, 'community boys'
expect to be paid for fiber to pass through -- this is a challenge,"
said Yen Choi, a board member at NIXP.</p>
<p> </p>
<p>Nigeria may be unique with the challenge of "community boys" but
issues of regulation and competition in cross-border and inland fiber
sales has contributed to the high cost and may need political
intervention for connectivity costs to fall.</p>
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