26 June 2008
analysis
Washington, DC — "Mauritius remains unique in its region in having identified ICT as a fifth pillar of its economy alongside sugar, textiles, tourism and financial services. However, it not only described a compelling vision but it went out and put it into practice. ... the need for cheaper bandwidth became an essential part of delivering this vision." - Russell Southwood
While Mauritius has a number of advantages not open to most other African countries - including a population that is well-educated and bilingual in English and French - their strategy does have significant lessons for a number of other countries that are considering making such a bid for building ICT into their development strategies. Taking advantage of cheaper bandwidth and available human resources, a number of African countries may able to complete not only in call center provision and other lower-end business process outsourcing projects, but also "moving up the value chain" to provide software programming and other higher-end services. Countries with potential in this regard include Ghana, Kenya, Senegal, and Rwanda, as well as South Africa.
This AfricaFocus Bulletin contains excerpts from a newly released case study on Mauritius written by Russell Southwood for the Association for Progressive Communications. Southwood is a leading analyst of the African ICT market and editor of the weekly Balancing Act News Update (http://www.balancingact-africa.com).
For previous AfricaFocus Bulletins on information and communication technology, including earlier reports from Balancing Act Africa, and a custom search of sites specialized in ICT in Africa, visit http://www.africafocus.org/ictexp.php
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The Case for "Open Access" in Africa: Mauritius case study
by Russell Southwood
Association for Progressive Communications (APC)
Commissioned by the Association for Progressive Communications (APC)
Conducted with support from the Social Science Research Council's (SSRC) 'Collaborative Grants in Media and Communications'.
Creative Commons Attribution-Noncommercial-Sharealike 3.0 Licence
[Russell Southwood is a leading analyst of the African ICT market.
He is a specialist of internet, telecommunications, and media developments on the continent.]
[excerpts only:full text available at
http://www.apc.org/en/pubs/research]
Introduction
This case study looks at the relationship between international bandwidth prices in Mauritius and the impact of its Cyber Island strategy. Whilst other countries along the SAT3/SAFE cable have struggled to find ways to address the high costs of monopoly international bandwidth on this cable, Mauritius has used a price determination to address the issue. Interestingly, once the process was announced, the incumbent Mauritius Telecom itself decided to lower prices ahead of the determination.
The example of Mauritius perhaps has lessons for other countries in Africa that want to find ways of changing the basis of their economies so that they can add "smart exports" alongside raw materials extraction, agriculture and tourism. Whilst it is always hard to draw direct causal links between bandwidth prices and wider changes in the economy, it is clear that Mauritius' call centre / Business Process Outsourcing (BPO) sector began to get significant growth in the years when the international bandwidth prices came down.
The nature of "smart exports" - where countries use brain-power to add value to basic tasks - 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. But there will also be new waves of outsourcing: for example, Lucas Films (responsible for the Star Wars movies) has set up a major new operation in Asia to do animation and specials effects. But whatever happens next, competitive international bandwidth will be essential to any country that wants to get this kind of work in the future.
Background
The process of liberalisation in Mauritius has in some ways been different from elsewhere in Africa. Mauritius Telecom's mobile subsidiary Cellplus launched in 1996 and was followed by Emtel which launched in 1998. Two years later in 2000 the Government privatised Mauritius Telecom by selling 40% to France Telecom for US$261 million.
Although other telco operators and ISPs have been licensed, most have remained small alongside Mauritius Telecoms' operations in these fields. However, unusually the regulator, the ICT Authority (ICTA) licensed a couple of VoIP service providers whose primary purpose was to offer cheaper international calling rates.
The telecoms sector in Mauritius currently has seven main companies: Mauritius Telecom (40% owned by France Telecom), MTML (Indian-owned Mahanagar Telephone Mauritius Ltd); Emtel (a joint venture between local owners, Currimjee Jeewanjee & Co Ltd and Millicom); NOMAD (owned by Dubai-based Galana); DCL (Data Communications Ltd), Outremar Telecom (French-owned) and Hotlink Co Ltd.
Of these, three have licences to offer mobile services (Emtel, Cellplus - recently rebranded as Orange - and MTML) and two have licences for fixed services, Mauritius Telecom and MTML. The latter offers a fixed wireless product to customers. At the end of 2007, there were 843,791 mobile subscribers and 361,319 fixed line subscribers. Unusually Mauritius Telecom is still adding fixed line customers. Cellplus has a 60% share and Emtel a 40% share of the mobile market. MTML's share is still currently negligible.
Although estimates vary, there seem to be about 50-60,000 Internet subscribers. Of these, Mauritius Telecom has 32,000 DSL subscribers and it has launched a Triple Play service offering television and Video downloads.
Emtel introduced High-Speed Downlink Packet Access (HSDPA), [a mobile technology with speeds of up to 1.8 mbps] in 2007 in some area and offers a USB modem for the service with packages costing as little as US$12 per month. These services are available in all the main locations on the island, including Cybercity. It also introduced data services in the same year through its own Wi-MAX network. Currently it runs a microwave backbone but by October 2008 will have built its own fibre backbone.
NOMAD was created after a local ISP called Network Plus was taken over by the current owners, African Digital Bridges Networks Ltd, which is in turn owned by Galana. DCL specialised in international Internet telephony (with its VoIP Easicall product) and on providing services to the BPO and call centre sector. Hotlink also offers international Internet telephony under the brand name of Yello International Call Carrier and has a partnership with an international wholesaler. Outremar Telecom is owned by a company of the same name in France that built its reputation on offering cheap international calls and is doing the same in Mauritius.
The combination of liberalisation and VoIP have considerably reduced international calling prices with even mobile rates falling to as little as 16 cents a minute for major destinations.
The ICT Act of 2001, it Amendment Act of 2002 and the Telecommunications Directive No 1 of 2008 are the key pieces of framing legislation for the sector. The first of these acts set up the regulator ICTA. Also in the same period, the Mauritius Government set up many of the enabling agencies that have played a part in the changes described below. These included the National Computer Board and the Board of Investment and other bodies covering among other things business parks (responsible for Cybercity), the Freeport and the export processing zone.
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