Primary Investigators:  

Abiodun Jagun, University of Strathclyde; Russell Southwood, Balancing Act

Partnering Organization: 

Association for Progressive Communications (APC)

How do African countries expand access to the Internet?  A significant barrier to the region’s development.has been the high price of bandwidth into and out of African countries, which has until recently come through a single submarine cable—the South Atlantic Telephony-3/West African Submarine Cable (SAT-3/WASC, or SAFE).  The price charged for international bandwidth in these countries has been controlled by the SAT3 consortium member that has been granted a national monopoly.  In each country along the cable's route in Africa, this consortium member is the incumbent telecoms operator.

In 2006, 13 SAT3/WASC/SAFE member countries met to discuss the end of national monopolies.  During these discussions it became clear that a critical aspect to obtaining open and fair access to SAT3/WASC lies in regulation.  Regulation operates within the policy frameworks that governments set up to protect its citizens.  Unfortunately, policy makers and regulators are finding it hard to grasp the issues surrounding the submarine cable. A particular area of weakness has been in understanding how to facilitate access to the cable at a price that is reasonable.

The Association for Progressive Communication (APC) has co-organized consultations and workshops with key groups, including regulators, which has indirectly caused a downward trend on SAT-3 prices.  To inform these discussions, APC conducted a large-scale research project, which began in 2006: “SAT-3/WASC post-implementation audit: Country case studies.”  The project documents the effect that the SAT-3/WASC submarine cable has had on communications on the African continent and the reasons behind missed opportunities for further development.  The overriding objective of this research is to identify and document both positive and negative lessons that can be learned from the development, implementation and management of the cable.  APC
SAT-3 research analyzes the entire life cycle of the cable to date and asks:

1. What happened and why? A global view of the construction of the cable.
2. What is happening and how?
3. What can be made to happen? Lessons to be learned, negative factors to avoid, positive points to imbibe.

The results of this research are used in two ways.  First, they give current and future infrastructure-oriented campaigns better insight in explaining the problems that have occurred as a result of the adoption of a particular set of decisions regarding SAT-3/WASC.  Second, despite the conditions under which SAT-3/WASC was implemented, the results of the study will prove useful to campaign partners and operators should a similar direction be taken on current and future infrastructure projects.

The series of APC studies feature national perspectives of the effect SAT-3 on the ICT environment in Angola, Cameroon, Senegal and Ghana, as well as the SSRC-funded case study of Mauritius.  Mauritius is perhaps the only example of a “successful” intervention by a regulatory authority in regulating the price of access to the submarine cable infrastructure and thus offers a distinct opportunity for analysis.

Mauritius remains unique in its region in having identified ICT as a fifth pillar of its economy alongside sugar, textiles, tourism and financial services.  After connecting to the SAFE cable in 2000, Mauritius launched its Cybercity project—a technology and service sector development zone located in Ebene, fifteen kilometers south of the capital.  The “anchor tenant” was a twelve-story double tower block to attract companies that could take advantage of a number of existing corporate incentives, including low company taxes (15%), free repatriation of profits, and exemption from customs duties on equipment and raw materials.  To address ICT skills shortages, it allowed international professionals to come and work with a new Green Card.  Mauritius also wanted to leverage its geographical location between Asia and Africa and make this an advantage companies would find attractive: the new SAFE cable gave it the means of communication to make this point a practical reality.

While other countries along the SAT-3/SAFE cable have struggled to find ways to address the high costs of monopoly international bandwidth on this cable, Mauritius has involved its government and incumbent telecom operator to help address the issue.  With the Mauritian Government deeply committed to the idea of developing the country as a “cyber island,” it made little or no sense if the price of the international private leased circuits was too high.  Consequently, two sets of price reductions took place in collaboration with the country’s main telecom operator, Mauritius Telecom.  The company had been privatized in 2000 when the government sold 40% of the operator to France Telecom. Yet, since the government remained a major shareholder, it was in a position to initiate action on prices in 2006. However, due to the existing national legislation, the regulator was only able to take action if Mauritius Telecom made an application to change its prices.  Therefore Mauritius Telecom was asked to submit an application to change its prices as the trigger for the price review process.  It proposed reducing its existing tariff by between 10 and 12%.

According to the legislation, the national regulator then had three options: It could approve, discard, or amend the price by going through a cost determination process.  It chose the last option.  After several stages of discussions and price reviews, the price determination gave an overall reduction of approximately 25%.  Having shifted its business strategy from “high price, low volume” to “low price, high volume,” Mauritius Telecom made a further cut on prices in 2007.  These two sets of price reductions – one caused by the regulator’s determination and the other made by Mauritius Telecom itself – have since July 2006 almost halved prices from their 2003 levels.  Lower fiber prices have meant increased traffic volumes.

The example of Mauritius suggests a model for other countries in Africa seeking to develop service sector exports to complement the raw materials extraction, agriculture and tourism.  Though it is difficult to draw direct causal links between bandwidth prices and wider changes in the economy, Mauritian business leaders and policymakers see a connection between the lowering of prices and the island’s increasing success at attracting outsourcing business.  Another factor is that international fiber prices have come down considerably and overall prices are expected to continue to fall.  Bandwidth providers are expected to more than make up in volume what they lose in pricing.

Mauritius Telecom has two planned further reductions in bandwidth costs to further spur investment.  An important question is whether Mauritius can continue to maintain a relative advantage in passing along savings from the deregulation of the bandwidth, and whether Mauritius can remain competitive in the changing global economy as those regional advantages balance out.

The nature of “smart exports” may change in the coming period.  Although multinational companies have been driven to reduce their operating costs, they are also reflecting on the successes and failures of outsourcing.  Beyond the challenge of getting enough of the right people, the cost of bandwidth is the second most important issue.  Benchmark countries for BPO/call centers in Mauritius on the French-speaking side are North Africa, Senegal and probably in future Madagascar. On the English-speaking side, they are India, China, Kenya and Uganda in future.  Interestingly, South Africa is not seen as a competitor because its bandwidth costs are higher.  Whatever happens next, competitive international bandwidth will remain an essential factor in the development of most African countries.

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The full paper by Russell Southwood is available as part of the APC “Issue Papers” Series 2008: http://mediaresearchhub.ssrc.org/the-case-for-open-access-in-africa-mauritius-case-study/resource_view. 

Researcher Abiodun Jagun's briefing of the multi-country study: http://www.apc.org/en/pubs/research/openaccess/africa/case-open-access-communications-infrastructure-afr 

More information on Communications and Information Policy in Africa and the SAT-3/WASC research project and East African Submarine Cable System can be found on the APC website: http://www.apc.org/en/about/programmes/communications-and-information-policy-africa and

http://www.apc.org/en/projects/openaccess/africa/open-access-africa-eassy-sat-3-wasc-research