African Internet operators still face huge obstacles

Johannesburg, 03 Aug 2001

There are still huge obstacles facing the Internet industry in Africa, Ajit Jatania, CEO of Simba Technologies in Tanzania, said this week.

Speaking at the ACT summit in Pretoria, Jatania said that while the industry is still facing the normal obstacles of expensive bandwidth, there are many other problems specific to Africa that prevent or deter companies from entering the market. Among these, he said, are the difficulties companies experience collecting revenues and the restrictive licensing policies that hinder new players entering the market.

Jatania also said the high-risk image of technology is still very much in place in Africa and "people are still scared of Internet technologies", while the long lead-time to break-even also discourages many investors from joining the Internet industry.

"It is not easy to become an ISP. It is expensive and needs a wide range of skill sets." Jatania said his company has developed a franchise business model that he believes goes a long way to opening the way for new players to enter the market in Tanzania.

The franchise package offered by Simba includes connectivity, bandwidth, technical support and the necessary licences. He explained that franchise operators piggyback on Simba's existing licence which covers the whole of Tanzania. The franchise system "uses common branding so you don't have to apply for a separate licence".

Jatania said the franchise system also means there is a "zero learning curve" for franchisees and they can quickly draw on the high bandwidth that Simba has in place. When it comes to collecting fees, "prepaid is the only answer".

He added that many users in Tanzania have recognised the benefits of forming user communities that share Internet access infrastructure. These "multi-user dialling units" are becoming increasingly common in the more densely populated areas. However, he noted that a lot of work should be done in remote areas to improve awareness of Internet technologies.