London — For years Togo's Government has been dancing around what it is going to do about its inefficient state telcos. It has now pushed them both together into a single entity and announced that it will offer a minority stake to a private operator. Russell Southwood looks at why it has not addressed the key issues that the market needs to develop.
On 3 October this year Togo's Council of Ministers announced that the newly created entity for the state incumbent - TOGOCOM - would be partially privatized. It said that by getting private investment it would be able to "fully assume its growth-stimulating mission." TOGOCOM has been created out of a merger between two separate state-owned companies, Togo Telecom (which provides network and fixed lines) and Togocel ( a mobile operator).
Offering a minority stake in a state telco with a vague promise that more will be available to the successful partner is a clear sign of a conflicted policy position. TOGOCOM remains an attractive source of patronage for the Government. The Ethiopian Government was much praised for offering a similar minority privatization proposition. These kinds of offers are generally made under international pressure and do not always translate into reality. Also unlike Ethiopia, Togo is a small market and not worth the friction for an operator that comes with a minority position.
To be fair, Togo's Minister of Posts and Digital Economy Cina Lawson has made the best of a bad hand without tackling some of the key decisions that need making. In 2014 there was an unsuccessful call for licensing a third mobile operator in the market. But in spring 2018, two new ISPs launched services in the market: GVA (Groupe Vivendi Africa) and Teolis (locally funded).
In July 2018 the second of only two mobile operators Moov Togo paid US$49.9 million for a 2G, 3G and 4G licence renewal with a pledge to attract 200,000 4G users by the end of 2018. TogoCel was also given a 4G licence at the same time.
The first of the new ISP entrants launched at the end of February 2018 ,Teolis is focused on two types of offers: one direct to corporates and the other for mass markets:"We also have Teolis Zone where we will sell Wi-Fi hot-spots to retailers. They will then sell it to users at CFA53 (US10 cents) for 20 MB. We also want to be able to offer a residential service and will build our network to do this".
At the time of launch, its LTE network only covered the capital Lome but it was raising money for wider network coverage. It has also launched a video and TV service called Marodi TV.
At present its LTE network only covers the capital Lome but founder Michel Bagnah told me:" "In terms of wholesale bandwidth, we are obliged to buy from Togo Telecom. We want to be able to buy independently and particularly to work with partners in Ghana and Benin. Wholesale prices are currently too expensive for us". It also uses (more expensive) VSAT connections.
GVA Togo, subsidiary of Vivendi Africa Group, has launched fiber to the home network (FTTH) offer in collaboration with Canal Plus (both of which are owned by Bollore). The broadband service costs CFA30,000 a month but the full broadband plus content service costs CFA45,000. Like Teolis, it is focused on Lome before rolling out in other parts of Togo. The other ISP competitor is Café Informatique.
But the arrival of two new ISPs back in the spring simply reinforces attention on the Gordian knot that the Minister is unwilling to cut. TOGOCOM has a monopoly over international bandwidth except for Ecobank that was given a separate licence to attract it to base itself in Lome.
TOGOCOM also has a monopoly over wholesale bandwidth in the country despite Moov Togo's attempts to invest in its own fibre network. Also as a clear defensive move, the monopoly provider signed an exclusive deal with the state power utility CET to lease its fibre, thereby excluding GVA Togo. Everyone knows that its prices for wholesale bandwidth are too high, the quality of the network is terrible and that its staff lack the skills required for the development of a digital economy. Part privatization is a compromise that will address none of these problems.
Balancing Act publishes a wide range of video and other resources, which can be found on the original of this article on their website.
AllAfrica publishes around 600 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.
AllAfrica is a voice of, by and about Africa - aggregating, producing and distributing 600 news and information items daily from over 150 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Monrovia, Nairobi and Washington DC.