The SAT-3 submarine cable has not had the impact on African telecommunications markets that had been hoped for, and appears to have reinforced the monopoly position of several carriers, according to a new study on the network.
For competition to thrive and telecom costs to come down, fresh measures are needed, according to the study, “The Case for ‘Open Access’ Communications Infrastructure in Africa: The SAT-3/WASC cable,” from the Association for Progressive Communications (APC).
The APC is an international network of civil society organizations chartered to support the deployment of technology in emerging markets. The study, released last week, focuses on the South Atlantic 3/West Africa Submarine Cable (SAT-3/WASC) section of the network, running along the west coast of Africa down to Southern Africa. The study looks at the effect the cable has had on the communications markets in Angola, Cameroon, Ghana and Senegal.
An increase in the number of legal and grey market operators providing services has given rise to some competition, which has had a positive impact on reducing prices for Internet and international services, according to Abiodun Jagun, who wrote the study. Jagun is a research fellow in the Department of Management Science at the University of Strathclyde Business School in Glasgow, Scotland.
Though the study found that the cost of Internet access to consumers has decreased, it has not declined to levels that had been anticipated.
Telecom regulations and laws in countries including Angola and Senegal may give the impression that their markets are fully deregulated — but in reality this is not the case, the study concluded.
With the exception of Senegal’s incumbent, Sonatel, none of the other signatories to SAT-3 examined by the APC study have been privatized. These government-owned entities often have a conflict of interest in the markets that they operate in and usually dominate, impeding reform.
In all the countries studied, the SAT-3 signatory is the largest user of its capacity. In Cameroon, Camtel, is estimated to use approximately 50 percent the country’s allocated capacity. The bulk of the remaining capacity is used by only a handful of large companies that are connected directly to the cable.
With the exception of Ghana’s incumbent, Ghana Telecom, all other SAT-3 signatories studied are legally the sole providers of international connectivity in their countries. This scenario, in most cases, constitutes a reinforced monopoly for state-owned operators who are sole providers of international connectivity in uncompetitive markets. They have little incentive to offer fair access and prices to other operators and consumers, Jagun writes.
