London — Two of Africa's least effective Government incumbent telcos - Congo Télécom (Congo-Brazzaville) and SOCATEL (Central African Republic) are using international monopoly gateways run by international companies. The Governments claim they are cutting down on fraud but the cost of incoming international calling has gone. The costs of calling out are also amongst the highest in Africa. Members of the diaspora from Congo-Brazzaville have already started to protest. Russell Southwood investigates.

On Thursday 4 February the Minister of Post and Telecommunications proudly announced that it had tracked down "a mafia" that had been operating a call diversion operation, robbing the company of international call income.

According to the Inspector of Post and Telecommunications, Julien Epola, the scam was clearly carried out with inside help from those running the company's digital lines but monitoring equipment looking at international calls had spotted them. According to a report in Les dépêches de Brazaville the monitoring equipment had been installed in the central exchange at Ouenzé by "un sujet étranger non encore identifié" (a foreigner not identified) in August. According to the Minister of Post and Telecommunications Thierry Moungalla it has enabled the country to save 12 billion Fcfa a year (approximately US$24 million).

The gateway has been installed by the Global Voice Group which has an interesting business model. In monopoly countries, it simply takes over all of the international traffic. In addition, it offers monitoring services of the kind described above. But it also encourages African Governments to impose a tax on incoming calls to pay for these services. In more liberalised countries, it insists that all calls go through its gateway for monitoring purposes.

The result? The Congo-B Internet site Mwida reports that many of its readers in France are asking why providers which used to offer a pre-paid calling card for 90 minutes at 6.50 euros has now cut the amount of calling time to 30 minutes for the same price, a staggering 66% cut in minutes offered. When asked, one operator said it was caused by the Ministry of Communications putting a tax on calls. To read the full article (in French): http://www.mwinda.org.

The same problem exists for those calling out of the country. Calls from Congo-Brazzaville fall into the most expensive group across the continent.

It is 850 FCFAs a minute (US$1.74) to a mobile in Europe and the USA and 800 FCFAs (US$1.64) to a fixed line for the same destinations.

But having this single anti-competitive service with an unfair tax (that is almost certainly illegal under international law) seems relatively simple compared to the situation in Central African Republic where no less than three companies claim to be offering this service. After a brief period of liberalisation of the gateway, this service was given by the country's Government owned incumbent SOCATEL to Telsoft International, which paid 1.5 billion FCFAs for the privilege.

But the D-G of Socatel then decided to give the contract for the service to an Israeli company called Daniel Investment. The service was agreed and the equipment installed at a cost of 750 FCFAs but nothing happened. Under the contract SOCATEL was supposed to pay back to Daniel Investment 375 million FCFAs. You won't be surprised to hear that this never happened either.

Subsequently the Chef of the Ministry of Post and Telecommunications negotiated a contract with Global Voice who has put its equipment in the Ministry of Communications, according to a report in Le Confident. In other words, there is very little separation between Government and its telco.

Three contracts over a relatively short period of time? What on earth can be happening? Those familiar with the old ways of Africa can join up the dots.

Is it incompetence or is there some other explanation we're not seeing?

Meanwhile, SOCATEL, a company that has no filed accounts since 2005, has reported debts of 13 billion FCFAs (US$26.6 million).

This is the old Africa of life in the slow lane, where those in power give out "rent-seeking" concessions that add nothing to the economic development of their countries. Neither of these incumbents has either the investment or the expertise to run a telephone company and their finances are so closely co-mingled with those of the Government as to be indistinguishable.

It is rather frightening thought that the World Bank sponsored Central African Backbone project might well end up being partly operated by SOCATEL. There surely has to be a better way...