Saturday, October 3, 2009

Ghana's Internet Industry Falls From Grace

Ghana's internet sector faces stiffer challenge to redeem its image as the strongest telecom savvy country on the continent after losing hold of its number-one position.

Ghana is struggling in the cyber world as more people in the country find themselves out of the internet space. There are currently about 880,000 people, according to the International Telecommunication Union, out of the estimated 23 million Ghanaians who have access to the internet and the figure is increasing at a snail pace at a time other African countries have leapfrogged into the cyberspace.

Ghana is the first country in sub-Saharan Africa to have pioneered the penetration of internet services to homes, when in 1995 the Network Computer Systems (NCS) was licensed as the first Internet Service Provider in the sub-region. But now the country is ranked as the third in terms of countries with the highest internet penetration in West-Africa.

A recent research on the communication sector financed by the USAID under its TIPCEE programme indicated that in 2000, Ghana's internet penetration of 0.2 per cent of the population was twice that of Nigeria and Senegal but is now trailing the two countries, some of which began accessing the internet about a decade ago. The continued spread of cheap computers and other related technologies into many homes in the country have given people unlimited access to internet-enabled devices. However, not all home computers are connected to the internet.

What went wrong?

Though Ghana started the mass utilization of internet services by the adoption and implementation of telecom reforms to help promote ICT development, lack of consistent and sustained effort in ICT strategy implementation has resulted in minimal results. When Dr. Nii Narku Quaynor founded Network Computer Systems [NCS] to provide cutting-edge solutions in West-Africa in 1988, the buzz that was created with the entry of the company was an indication of an economy that wanted to capitalize on the boom in the IT sector to uplift the living standards of Ghanaians.

Afterwards Africa Online and Internet Ghana followed suit to provide Ghanaians with unlimited access to the internet. Since then internet usage has surged, but the concern is that the rate of penetration continues to be low because of the high cost of accessing it. Scarcity of international internet bandwidth and lack of internet Exchange Points (IXP) have driven up prices. Ghana has one of the lowest internet charges in the sub-region, with an average monthly subscription of about US$50, about eight percent of the country's per capita income. Yet cost of accessing the internet is still considered expensive, especially when hosting the Ghana Internet Exchange Point (GIX).

It has been argued that the high tariffs charge for connecting to the internet reflects the high costs incurred by Internet Service Providers (ISPs) relating to bandwidth and other ancillary services. Broadband penetration is still low in the country. The low availability, poor condition and lack of competition in the public switched telephone network market constrain the deployment of fixed broadband access.

Also the National Telecommunication Authority (NCA) appears to have slacked in its regulatory functions. There are currently more than 150 licensed ISPs in the country, but only a little over 30 of them are in operation and the Authority seems to be doing nothing about the dormant operators and exercise its regulatory oversight on the performance of ISPs. In fact, the NCA has not relented on its drive to license more ISPs because of the less stringent licensing regime for ISPs within the framework of the Telecommunication Regulations in 2003.

The provision of internet services have been liberalized so much that the NCA cannot limit the number of service providers and enforce compliance. The Authority has consistently begged key performance issues, such as requirement for ISPs to deploy service within 90 days of receiving authorization and monitoring them to demonstrate continued provision of service to the public.

In 2008, the Ghana Internet Service Providers Association (GISPA) intimated that they have lost confidence in the national telecom regulator- to the extent that some of its members have now decided to resort to court actions to resolve disputes because the NCA has instituted a regulatory regime that does not support fair and transparent management of the country's frequency spectrum. Other problems faced by service providers in the internet sector include lack of regulatory guidelines for and imposition of restrictions on the commercial deployment of Voice Over Internet Protocol (VoIP) by ISPs, lack of policy guidelines to promote the growth and success of the ICT industry, and improper pricing of access to bandwidth, fibre-optic, submarine and other infrastructure.

Improving Internet access

The internet has become a powerful tool that is being exploited for both social and economic development. For instance, the internet has facilitated the establishment of an electronic marketplace for commerce, marketing, advertising, distribution, entertainment, invention, social interaction, gender empowerment, and it's also used for online distance education and there is the need to promote widespread use of the technology.

But efforts to make the internet available to majority of Ghanaians will be useless if local investors do not recognize that it is expensive to build parallel networks as it is wasteful and increases cost to consumers. For regulatory authorities, there is the need to realize that the current accounting rate system is dying, which calls for an alternative before it dies. It cannot continue to form the basis for refusing to allow ISPs and consumers to benefit from VoIP.

Maybe government officials have to focus on the revenues to be derived from taxation when more persons are connected to the network, as opposed to the current focus on lost revenues from settlement rates. Ghanaian internet consumers crave cheap and easy access to the internet, and efforts must be made to make it available to them.

Courtesy: Evans Boah-Mensah

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