1. Challenges facing ISPs in Africa: a view from an African ISP William Stucke AfrISPA ZAnet Internet Services

2. Challenges common to all ISPs • Special Challenges faced by African ISPs • Response to Challenges • Relationship with Telco's • Opportunities

3. Challenges common to all ISPs • Cost of bandwidth & carrier services • Continual investment in infrastructure • Highly competitive market • Discretionary consumer & business spending • Low margins

4. Special Challenges faced by African ISPs • Telco monopolies – uncooperative incumbents • Lack of competition among Telco’s • Delays in supplying lines & carrier services • Inhibiting Legislation • Extremely high cost of international bandwidth (pay for both legs) • High cost of local carrier services • Distance from the “centre of the ‘Net”

5. Special Challenges faced by African ISPs - 2 • Lack of trust and cooperation among local ISPs • Lack of local IXPs • Cost of imported hi-tech equipment – high taxation • Availability of imported equipment • Purchasing parity and foreign exchange restrictions and fluctuations

6. Special Challenges faced by African ISPs - 3 • Lack of education among potential users – not only computer literacy, but literacy itself • Limited technical capacity – lack of skilled engineers • Brain-Drain – engineers get experience and then leave Africa for the West

7. Rising to the Challenge • ATU • AfrISPA • Incumbent Telco’s • Joint Efforts

8. Rising to the Challenge - ATU • Improve legislation – enabling, not restricting • Fully independent and powerful Regulators in every country • Effective regulation of Telco’s – prevent abuses of power • Introduce competitive Telco’s • Don’t charge duty on imported equipment – give a rebate • Fully liberalise VoIP in all African countries

9. Improving Legislation • Restrictions on who can provide international connectivity, and how • Restrictions on wireless local links • Licensing of ISPs • Restrictions on use of VoIP • Restrictions on use of technology

10. Rising to the Challenge – AfrISPA • Foster ISPAs in all countries • Encourage building of local or national IXPs • Training workshops • How to form an ISPA • How to build & operate an IXP • PAVIX – to provide better connectivity among IXPs in African countries

11. Rising to the Challenge – Joint Initiatives • Educate legislators and regulators • Enact enabling legislation / provide regulatory dispensation to facilitate earth stations for PAVIX • Dialogue with incumbent Telco’s • Improved and increased dialogue between the ATU and AfrISPA

12. Rising to the Challenge – Telco’s • Recognise ISPs are your best allies, not a threat • Internet usage is an enormous force for economic growth, especially in the ICT sector, and Telco’s benefit directly from this. Internet usage is still growing at >> 50% per annum in Africa • For every $1 earned by an ISP from dial-up customers, the Telco earns $6 from call charges, plus line rental charges from both the ISP and the customer, who frequently installs a first or second line, or upgrades to ISDN or better

13. Rising to the Challenge – Telco’s 2 • Over 50% of new leased line installations are ordered directly or indirectly by ISPs • VoIP allows far greater efficiency in local and international carrier capacity usage, which leads to revenue gain due to increased traffic which gives greater utilisation, rather than a direct loss of revenue due to alternative supply

14. Opportunities • Leapfrog the West – skip over their 15 years of development • Implement World Class networks now • Gigabit networks rather than Megabit networks • PAVIX – move the centre of the ‘Net to Africa

15. Pan African Virtual Internet Exchange - PAVIX • “IXP in the sky” • Four countries so far • Satellite link in each country, from each IXP, to a single satellite • Shared infrastructure, shared costs • Direct connection between countries

16. PAVIX • Eliminate huge International bandwidth costs • Increase speed and capacity of African communications • Foster development of local content • Foster intra-African trade, e-commerce, e-medicine • Peer as an equal with USA, Europe • Pay for only one half-leg of international links