Illegal telco operators in Cameroon: The most reasonable option

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By LC for APCNews

CALGARY, Canada, 04 January 2010

In 1995, Cameroon initiated a restructuring process in the telecommunications sector. Placed among the least-connected countries in Africa (ranked 179th out of 206 countries classified by the International Telecommunication Union), the Telecommunications Regulation Agency (ART) was established to ensure healthy competition between operators at the time of this restructuring.

Street vendor sells telephone time by the minute: Photo: Gasti via Flickr  http://www.flickr.com/photos/gasti/2337448110/Street vendor sells telephone time by the minute: Photo: Gasti via Flickr http://www.flickr.com/photos/gasti/2337448110/That should have allowed for the entry of new operators onto the market which in theory should have led to a reduction in prices and an improvement in the quality of service. However, today the average Cameroonian still can not afford to freely browse the internet or make long or long-distance calls on his or her land line or mobile telephone.

During the reforms that took place between 2002 and 2008, 123 network operating licences were awarded, 53 of which were for open public networks, 70 for independent private networks and around fifty for internet success providers, but this multitude of licences and operators did not lead to the much anticipated reduction in prices Cameroonians had been waiting for.

Opening the doors to informal operators

There is a low level of national coverage by the fixed-line telephone network over which CAMTEL the traditional national operator holds a monopoly. A report by PROTÉGÉ QV, a Cameroonian NGO working in the ICT domain, reveals that “less than 2% of Cameroonians have a fixed-line telephone, because of an inadequate supply of lines (175,000), the degraded state of the infrastructure, administrative red tape and high installation costs (100,000 CFA, or approximately USD 200 for commercial lines and CFA 40,000 (USD 80) for residential lines).” Even the innovative CT Phone, a telephone, which uses CMDA technology —technology which allows for several simultaneous calls on one connection, and is therefore less costly— has brought about negligible progress and the CT Phone network infrastructure which covers 48 areas still needs work.

Mobile telephone service is poor quality. Networks are often noisy and saturated, especially in large cities such as Douala and Yaoundé, and communication costs are very high. A call from concessionary operators such as MTN or Orange to another network can cost up to 40 US cents a minute. These high communication costs and low quality services have paved the way for illegal operators to emerge, who charge half the price of official networks. Illegal they may be, but these pirate providers are making a major contribution towards bringing down the price of internet access to a level that matches the pocket of the average Cameroonian. In a country where 48% of the population lives on less than one US dollar a day, communication is a luxury that many cannot afford.

The internet situation no different. Monopoly CAMTEL began providing internet access in 1998. Although broadband access has improved since 2005 with the use of fibre optic and hook-up to the SAT-3/WASC cable, the sector’s development has been slowed down by the pitiable state of the fixed telephone network infrastructure neglected for years, as well as slow fibre optic deployment speed. As a result cybercafés are the most affordable solution for the majority. One hour of internet use varies from U$S 0.60-2.00, averaging around U$S 1.00 per hour in the poorest rural areas.

Because CAMTEL and the ART limit the number of competitors through high licensing fees (with subsequent high prices passed down to customers) informal operators continue to offer an affordable solution to Cameroonians’ basic communication needs. But there are downsides – these unofficial operators use VSAT to offer internet access, exposing users to equipment that has not been controlled for quality or functionality. Unregulated equipment can mean faulty service. Operating under the table also results in major tax revenue losses for the government as well as the loss of license fees.

Registered providers offer the classic services – email, instant messaging, etc. for a network subscription cost of about U$S 90 and a fee of U$S 50 or so per month, but for a very unstable connection of dubious quality. Even with more affordable services on offer, these costs are high for Cameroonians.

A Special Telecommunications Fund, paid into by registered operators and various other sources was put in place in 2002. Its purpose is to mobilise substantial funds to improve universal access, but so far it has not been very successful. Getting struggling telecoms operators to jump on the payment bandwagon is not always easy, as these payments are voluntary. Yet it is not only up to the operators themselves – the regulatory agency is also responsible for the country’s current state of telecommunications, and it is currently unable to fulfil its regulatory function objectively.

The regulatory agency’s loophole

It appears that the ART managed by the Ministry of Telecommunications, MINPOSTEL does not have the means (authority, independence, or resources) to play its regulatory role to the full extent – a role that should include control over service costs. The central role assigned to the ART is that of managing competition, monitoring the production and provision of quality services, and protecting consumers — roles which justify the decision-making and operational autonomy that it possesses however PROTÉGÉ QV questions ART’s independence from the government and CAMTEL. The director of ART is appointed by the President of the Republic and the majority of directors and managers are Government representatives.

“Can it really independently and fairly handle problems between operators, especially as the public operator, CAMTEL, under the same supervision, is involved?” asks PROTÉGÉ QV.

In addition, the various laws and regulations for the sector lead to confusion about the roles of the various players. The law gives a monopoly to CAMTEL on developing telecommunications infrastructures, and gives MINPOSTEL responsibility for studying and establishing (or ensuring the establishment of) telecommunications equipment and infrastructures. That means that the two different functions are essentially under the supervision of a single player.

Furthermore, no reference is made to cross-border connectivity and internet access – on-line business and transactions are therefore not regulated, which is a fairly major problem if one considers the expanding role played by the internet in the development of economic activities the world over. According to PROTÉGÉ QV, “this legal deficiency puts the authority in charge of the sector in an awkward position, especially when confronted with the high demand for licences to provide services such as mobile internet, voice and television over IP, and Wi-max.” The ART is therefore in a legal loophole and the reforms, the intention of which was to promote universal access and thus the economic and social development of the country, remain ineffective.

Note: This article was written as a part of APC’s Communication for influence in Central, East and West Africa (CICEWA) project, which is meant to promote advocacy for the affordable access to ICTs for all. CICEWA seeks to identify the political obstacles to extending affordable access to ICT infrastructure in Africa and to advocate for their removal in order to create a sound platform for sub-regional connectivity in East, West and Central Africa.

Photo: Gasti via Flickr

(END/2010)

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