Internet Ghana vs Ghana Telecom: "The Battle Of The Shark And Fish
Mr. Chairman, Ladies and Gentlemen I am pleased to present InternetGhana's experience in the deployment and rollout of Broadband Internet Services in Ghana. Having begun the rollout of Ghana's first ADSL deployment in 2003, InternetGhana has an experience to share that I believe serves an excellent case study for competing private operators looking to deploy Broadband Service.
InternetGhana has always been pioneers in the Internet Industry in Ghana, since its incorporation in 1996, with the first 64kbps fully digital end to end connectivity to Internet MCI of the USA.
InternetGhana followed this with the deployment of ISDN technology over leased copper circuits to enable the provision of digital connectivity to clients both for Data Wide Area Network's (WAN) and Internet access.
Our ADSL innovation was a natural consequence of the poor quality and service that our Dialup service provided to clients, with the nightmare of 100, 2wire analog phone items per POP.
For InternetGhana, DSL Service would excite a stagnant market, offer higher Bandwidth and appeal to the SME's who could not afford full leased circuits.
In April 2003, InternetGhana begun testing of the technology and in June 2003 began mass deployment. Service category was tailored to meet 3 principal users.
Other products in the portfolio was our Sprint Direct Service that offer end to end connectivity to the Sprint USA Tier 1 backbone in bandwidth capacity of N x 64kbps.
The principal technical challenge was that of training the technical staff of Ghana Telecom to the principals of shared access or local loop unbundling.
InternetGhana worked tirelessly with 3 levels of Ghana Telecom staff, from the Technical Managers to the exchange MDF technicians.
By June 2003, some 6 exchanges have been wired for DSL Service deployment. InternetGhana DSLAMS are based on the ADSL and ADSL2x standard. Over 1500 ADSL ports are currently deployed and another 1000 port in reserve awaiting deployment.. Field Technical challenges were issues of last mile cable quality and InternetGhana in several cases had to replace these last mile cables to higher grade twisted cables.
Field coordination with Ghana Telecom staff to solve cable problems was the biggest time factor in addressing service failures.
The technology of DSL was new in the Ghanaian market place and at the time of launch, it became clear that advertising to educate the public on the benefits of DSL was crucial to its success.
Indeed, for the next year, InternetGhana undertook the extensive Broadcast and Print media campaign to create public awareness of the technology platform.
As a result, in December 2003, we had a winning product characterized by the following: -
1. InternetGhana delivered service to over 80% of applicants within 48 hours.
2. Client satisfaction was high, with a total client volume of 275 clients out of a targeted 2000 clients.
However, with client ADSL circuits open 24 hours at over 256kbps each, Bandwidth soon become a problem.
Bandwidth in Ghana, where is the Broadband?
Cost of bandwidth is the “Achilles heel” of Broadband in Ghana for the private operator.
In 2003, and indeed today, 2mbps bandwidth to a tier 1 backbone in the USA cost well over $18k/month. Ghana Telecom in negotiations with Ghana Internet Service Providers Association (GISPA) reduced SAT-3 Bandwidth over 30%, however, there appears to be limited technical capability to deliver capacity.
However, SAT-3 is owned by a consortium and Ghana Telecom is reported to have invested over $20 million dollars.
As a result, while the price for a 45mbps, transatlantic to the UK and to Sesimbra, Portugal is about $10k/month the price via SAT-3 to Accra is 154k/month. This high cost of landing bandwidth to Accra is justified by Ghana Telecom as necessary to ensure return on its investment in SAT-3.
The Ghanaian challenge the question at this forum therefore is:
Does the $20 million investment of Ghana Telecom in SAT-3, justify the high cost of Bandwidth and by so doing disenfranchise all Ghanaians??
From a national perspective, the cost of terrestrial transmission out of Accra aggravates the situation further. Having landed bandwidth into Accra at over $170,000/month, a 2mbps link to the second largest city, Kumasi, cost a further $5k/month, the third largest city, Takoradi a further $5k/month.
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However, InternetGhana operates a single service rate, countrywide, a major challenge for any private operator who depends on third party terrestrial networks to reach cities remote from the SAT-3 landing station in Accra, the capital.
At InternetGhana, we have transcended the matter of the technical and financial barriers to broadband deployment in Ghana.
However, the biggest and the most severe challenge to InternetGhana is the competitive barrier to our continuing ability to deploy broadband in Ghana.
The histogram, spans 3 years on the extreme right is June 2003 and an extreme left March 2005. The year from June 2003 to June 2004, InternetGhana saw accelerate growth peaking at June 2004. From June 2004 to date has seen a steep decline in the client count.
The second portion of my submission is to highlight the decline. My submission.
Competition, Competition most foul!!
DSL was born on the initiative of the IMC of Ghana Telecom. However, the management of Ghana Telecom changed. Bringing into office the Telenor Management Team headed by Mr. Oystein Bjorge, CEO and a team of Managers and Consultants from Telenor, Norway.
InternetGhana had severe disagreement with the new management on several issues, not limited to the financial, technical and administrative issues.
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These disagreements and frustrations include stopping InternetGhana's:
1. Expansion to other exchanges, beyond the initial six (6) installed exchanges.
2. Several interruptions to the delivery of shared access to clients.
3. Termination of the original framework against which DSL services were being deployed.
These actions eroded public confidence in our continuing ability to provision service as shared access delivery went from 48 hours to over 60days in some cases.
In retrospect, these actions were deliberate at slowing market penetration, limit expansion to new market Areas, in anticipation of Ghana Telecom's own launch of DSL services.
In February 2004, with the original contract terminated, it took the intervention of the Minister for Communications and Technology, Hon. Kan Dapaah for the National Communications Authority (NCA) to setup a Mediation Committee to investigate and mediate the impasse.
Under guidance of the Mediation Committee, in June 2004, a comprehensive operator Access Agreement was signed by both parties, governing, performance parameters, SLA, Collocation and client migration to competing providers, amongst others.
However, a month after, in July 20th, Ghana Telecom launched its competing Broadband 4U product.
A comparison of the services showed that Ghana Telecom was offering up to 8 times the bandwidth but in all service categories at $5 less than InternetGhana's product. Ghana Telecom could afford to do so; access to Bandwidth via SAT-3 was free, but to InternetGhana exorbitantly priced.
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This histogram clearly portrays the effect of these frustrations and the launch of Ghana Telecom Broadband 4U product.
By March 2005, client count was just under 300 and revenue for DSL had collapsed over 400%.
However, the worst was to appear, for up to date, March 2005, Ghana Telecom Broadband 4U product has been FREE of CHARGE.
Clients of Ghana Telecom Broadband 4U do not pay the advertised setup fee, the cost of ADSL Modem and or the monthly recurring fees. In spite of the offer of 8 times the bandwidth at $5 less InternetGhana's pricing, Ghana Telecom needed to offer services free to ensure a complete annilation of InternetGhana.
InternetGhana clients migrate to Ghana Telecom Broadband 4U for free, leaving a huge debt.
Notwithstanding the comprehensive operator Access Agreement between both parties, and in total disregard of that contract,
Ghana Telecom illegally and arbitrarily disconnects InternetGhana clients migrating to Ghana Telecom Broadband 4U, in spite of a shared access contract for that client for a minimum one (1) year.
Because these clients are taken without notice to InternetGhana, InternetGhana continues to pay shared access fees for these clients monthly. Money Ghana Telecom duly collects.
Client circuits that go faulty, have very long time to repair and this is used as a pretext to offer Ghana Telecom Broadband 4U in some cases.
Client delivery of shared access now averages over 30 days.
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In conclusion, it is InternetGhana's thesis that in Africa, and Ghana in particular, the least of the barriers to Broadband delivery are the technical and the financial. Clearly, the larger barrier is that of the competitive barrier by incumbents driven by the “me too” syndrome.
We at InternetGhana submit that the challenges of affordable bandwidth in Africa can only be achieved by addressing:
1. The issues of affordable bandwidth access on SAT-3
2. Proactive, as against passive regulation, by the Africa's Regulators
3. Affordable in country terrestrial open networks
The Million Dollar question remains that
“For developing countries in Africa, should the incumbent Telco, faced with unfulfilled mandate to deliver basic phone service to remote village, also be the monopolistic player in the delivery of multimedia internet services”
THANK YOU Back to Top