Three prominent entrepreneurs who pioneered the introduction of the Internet into homes and offices of the country are sad the industry they helped to nurture is performing poorly.

Ghana, which became Africa’s first Internet serviced country in 1993, now has a penetration rate of 5.3 percent – which is far below the continent’s average of 10.9 percent.

“The private business operation in Internet service provision may at best be described as weak,” said Dr. Nii Kwaku Quaynor, founder and chairman of Network Computer Systems – which was the country’s first Internet Service Provider in 1993.

“I would describe private business operation in the provision of Internet service in the country as fair to poor. In my opinion, there is none that is providing good service that is reliable, cost-effective and reasonably priced,” added Mr. Mawuli Tse, first Chief Executive Officer of Africa Online.

“From an operator point of view, I would say the provision of Internet services has never been so bad. From a consumer point of view, I would say it has never been so good; and from the governance point of view, I would say the Internet industry is heading towards a disaster,” said the Chief Executive Officer of Internet Ghana, Leslie Tamakloe.

The three, who spoke separately to the B&FT in an interview in Accra, cited various reasons for the decline of the internet industry at a time other African countries have leapfrogged into the cyber-world. The common theme that ran through the reasons cited include lack of regulation, limited local content, anti-competitive practices and lack of investment in infrastructure development.

Dr. Quaynor, who has the distinction of being the first Internet Service Provider (ISP) in sub-Saharan Africa, explained that the difficulties associated with the growth of the country’s Internet service sector stem from limited local content apart from current political news, in addition to domination of the Internet market by multinational telecom companies who enjoy market cross-subsidies to the exclusion of small operators.

He cited lack of regulation in internet business in the country as the principal threat in the country saying: “As an example good regulation would have prevented telecom companies from cross-subsidising their Internet service operation for increased competition.

“Similarly, regulation would have separated international fibre-optic cable service from other services for improved competition. Regulation would have also ensured that a wholesaler does not become a retailer to kill competition.”

He added that politicisation of the Internet sector by government through politicking the privatisation of the national telecom company Ghana Telecom – now Vodafone Ghana – as well as a legal system that prolongs the determination of ICT-related cases, have all contributed to the industry’s decline.

The International Telecommunication Union in its report dubbed ICT Eye has put the total number of people in the country with Internet access at 1.3 million as at the end of 2009.

According to Dr. Quaynor, it is about time people understood that the country needs to do some soul-searching to realise where it had got it all wrong in promoting Internet usage among the populace.

“You will see regulatory failure, deliberate destruction of Internet companies and people just talking-  usually about what they would have read in magazines – which does not necessarily develop an industry,” he noted.

Dr. Quaynor’s Network Computer Systems – the only ISP operating in Ghana prior to the liberalisation of the sector in 1996 – was founded in 1988 and grew from a two person staff to a staff of 87 in 2003, with a turnover of US$2.3 million.

However, the company’s services were abruptly terminated when its assets were seized in November 2003 in a land dispute between UTC Estates; a Director, Sam Jonah; and Network Computer Systems.

“The regulator provided no public infrastructure protection. The case is still in court unresolved after nearly six years, which in computer time is two generations and for Internet time light-years!

“This could remain a clear scar on the face of Internet in Africa,” he said.

Dr. Quaynor said he is now focusing his attention on newer technology business areas beyond Internet access, where he has competitive advantage of knowledge and experience in a new company called Ghana Dot Com Limited. “We are doing a lot of work in cloud computing where users can rely on well-integrated services on the Internet.”

Incredibly, Dr. Quaynor is not the only pioneer and early ISP who has left the Internet provision sector to focus his energy on other technology-driven ventures.

The ex-CEO of Africa Online, Mawuli Tse, is also now in a different field – focusing on building the local branch of iBasis, a global leading firm in international voice, mobile data and prepaid services.

According to him, the Internet sector has declined over the past years because industry players have become complacent and the companies are only interested in milking the consumer. “There is a problem of uniformly (across) bad service in the industry. Don’t forget that the market is still small. So if you have a few customers and you can milk them dry, you do it.”

He said ISPs are abusing consumers since most people are not well-informed and cannot therefore insist on what they should get from the service providers.

“To the consumers, they are getting the service from ISPs; but what they do not know is that they are getting bad, expensive and unreliable service,” he said.

“Government is a potentially large consumer that can drive down prices if it wants. If the government agencies come together and buy bandwidth as a block, they can farm out part of it to three or more companies that they are competing with for the service. That way it will give companies the stability to reduce their prices.

“So, for me, I see the role of government as a major customer and not as much as a facilitator,” he added.

Mr. Mawuli Tse played down people’s expectation that the entry of new international bandwidth providers like Main One Cable and Glo 1 cable would drive down the cost at which local ISPs buy from Vodafone’s SAT3, which currently cost about US$4,500 for 2megabytes of bandwidth.

Operators of Glo1 and Main One cable have said that they will be selling the same capacity of 2megawatts to ISPs at between US$600 and US$900.

However, Mr. Mawuli Tse said since no ISP has signed any contract with the new entrants, they should not be over-confident that prices of bandwidth will drop.

“Over time, competition may bring prices down; but for now, unless the new operator is completely stupid, it is not going to price its product all the way down from the incumbent.”

The CEO of Internet Ghana, Leslie Tamakloe, who is only one of the three early ISPs still in active Internet provision service has equally expressed regret at the developments in the local Internet sector, which he said has seen off all the pioneers – in the sense that their businesses have not necessary thrived.

He cited the difficulties encountered in the operations of Dr. Quaynor’s NCS as a failure on the part of the nation to grow its indigenous enterprises.

“Considering the pioneering efforts of Dr. Quaynor, why is he not the MTN (leader) of internet in Ghana? Maybe he is the only one who can answer that. But for me, it tells me that from a policy angle, from an economic angle, political angle and from a governance angle, we have failed. And in failing we have failed Ghana as an entity and replaced it with other foreign entities. Statistics show that more people access the Internet through the services of foreign companies operating in the Internet sector and that is the biggest reflection of the state of the market now.

“If as pioneers of the industry, our government did not leverage on us into a sub-Saharan Africa brand – just as MTN has been created as an African brand – it shows that there has been policy failure, economic failure, telecom failure and failure on the part of the NCA. There has been consistent failure across all fronts. That is where we have failed as a country,” said the visibly worried founder of Internet Ghana, the first company to allow people to access the Internet digitally in 1996. Before then, people connected to the Internet through a dial-up service.

Mr. Tamakloe who spoke passionately about the failure of the telecom regulator, NCA, to create a level playing field for indigenous ISPs, said: “In spite of NCA’s anti-competitive practices and laws about monopoly in the telecom sector, Broadband4U is a monopoly.

“Indeed, we in Internet Ghana think that we have had the biggest abuse by an incumbency that has taken place on the continent of Africa; that is why Vodafone can lay claim to about 30,000 broadband users while we can only say we have about 50.”

By Evans Boah-Mensah

Source: Business & Financial Times