18th Anniversary of PATU - Video Recording

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					I NTERNATIONAL T ELECOMMUNICATION U NION


                            Journée Africaine des Télécommunications,
     on the occasion of the 18th Anniversary of Panafrican Telecommunications Union (PATU),

                                    Kinshasa 7-8 December 1995


        Mobile communications: A “quick fix” or a long-term solution for Africa’s
                              communication needs?

                               Dr Pekka Tarjanne, Secretary-General,
                               International Telecommunication Union



   Mr. Chairman,
   Mr Secretary General of the Panafrican Telecommunications Union,
   Ladies and gentlemen,

   First of all, let me wish you a “happy birthday”, on this the 18th anniversary of the founding of
   the Pan-African Telecommunications Union. In most countries around the globe, when a child
   reaches the age of 18, he or she is finally regarded as an adult, ready to take on new
   responsibilities. I am sorry not to be with you in person to help blow out the candles on your
   birthday cake, but I promise you the full support of the ITU in helping to recognise and take on
   those new responsibilities.

   To celebrate this anniversary, you have chosen to discuss a very responsible topic, namely the
   prospects for the development of mobile communications in the continent of Africa. I would like
   to take this opportunity to share with you some thoughts on this matter. In particular, I would
   like to address a specific question: “Does mobile communications represent a long-term
   solution for the communications needs of Africa, or is it merely a “quick fix” solution, aimed
   primarily at the foreign business community?” In particular, I would like to look at some
   examples, from both within and outside Africa, to determine what are the factors that have
   contributed to the successful introduction of mobile communications.

   At the end of 1994, there were almost 400’000 mobile telephones in use in Africa, around 3.5
   per cent of the total number of telephone subscribers. The first commercial cellular services on
   the continent were opened in 1987, and by the end of 1993, some 80’000 subscribers had been
   added. But 1994 was the year that the service really took off, with the number of subscribers
   increasing almost fivefold. The main reason for this growth was the introduction of digital
   cellular services in South Africa, following the April 1994 elections. South Africa now accounts
   for some 86 per cent of the mobile telephones in use in Africa. But the experience of cellular
   runs much deeper than this. During 1994, new services were initiated in Senegal and Tanzania
   bringing the total number of countries in Africa with an operational service to 19 by the end of
   the year. During 1994, at least five other African countries succeeded in doubling their number
   of mobile telephones, including Gabon, the Gambia, Ghana, Guinea and Morocco.

   What lessons can be learned from the success of mobile communications in South Africa?
 The clearest lesson is the value of competition. Between 1989 and 1993 when mobile
   communications was provided in South Africa under a monopoly franchise, the service grew
   at an average annual growth rate of 78 per cent per year. This sounds impressive, until it is
   considered that, following the licensing of two competitive GSM providers in 1994, the
   growth rate increased almost ten-fold to 750 per cent. Other countries which have licensed
   competitive cellular providers, have also generally experienced much faster rates of growth
   than countries which have licensed only one operator, even when the domestic market is
   limited in size. For this reason, I would urge those African countries considering starting
   mobile communications systems, or perhaps issuing a second round of licences for digital
   or PCS systems, to bear in mind that licensing a minimum of two operators provides an
   advantageous solution;

 A second lesson from South Africa is the importance of involving local business interests.
   While it might be tempting simply to award a license to the highest foreign bidder to install a
   turnkey system, it is much better to involve local business from the start, through a joint
   venture or a consortium. This will assist with the process of technology transfer, but it will
   also help to promote local entrepreneurship and the local re-investment of profits;

 A third lesson from the experience of South Africa is that it is possible to negotiate
   community service obligations in the license conditions offered to each mobile operator
   so that the benefits of this new technology can reach the widest possible range of
   community interests.

In South Africa at least it is clear that mobile communications represents a long-term solution to
the communication needs of the country and not just a “quick fix”. While it is true that the gap
in the cost of ownership between mobile and fixed-link communications remains high, that gap
is narrowing over time. Indeed, because of the favourable interconnect terms granted to mobile
operators in South Africa, mobile telephone calls are actually cheaper than fixed-link calls over
some routes. As the mobile market matures, it will cease to be perceived as merely a rich
man’s plaything. Mobile communications needs to shake off this image and mobile service
providers need to adjust their tariff structures progressively to facilitate the penetration of a
wider market. This will mean widening the range of tariff options to appeal to different types of
user.

To see where the mobile communications revolution is heading, it is useful to look outside
Africa.

 In Thailand, for instance, there are now more than one million users of mobile
   communications despite the fact that Thailand’s penetration of main lines is less than one
   for every 20 inhabitants;

 In Singapore, it costs less than US$ 10 to connect your cellphone to a cellular service and
   less than US 40 cents for a three minute local call;

 In the United Kingdom, almost as many new users were added during one year, 1994, than
   in the first nine years of operation of the service;

 In India, the award of mobile communications franchises has raised billions of dollars for the
   government, even before the first cellular call was made in the country;

 In Sweden, the number of fixed-link telephone main lines is actually starting to decline as
   the number of cellular subscribers continues to grow.

In each of these countries quoted above, the lessons concerning the value of competition, the
involvement of local business interests, and the negotiation of community service obligations
have already been followed. These examples, along with that of South Africa, point to the fact
that mobile communications can, and should, become a long-term solution for meeting

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communications needs, whether the country be developing or already developed. I would,
therefore, urge you in your discussions today to consider mobile communications as an
essential element in the future communications infrastructure of Africa. Like PATU, mobile
communications is a technology which has now come of age.

As we move into the next millenium and with the convergence of telecommunication reshaping
the world, Africa cannot afford to lag behind. On this historic occasion, the Union pledges to
keep the momentum to maintain and strengthen its excellent relationships with the Panafrican
Telecommunication Union and the Organization of African Unity with a sole objective in mind :
connect the Continent through the development of telecommunications.

Once again, please accept my best wishes for a happy anniversary.




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