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VoIP Booming in Africa
securitas writes "The NY Times reports on the rapid growth of voice-over-IP telephony (VoIP) in sub-Saharan Africa and the battles it is waging with the government monopolies/ILECs. VoIP upstarts are taking market share from the government telcos, making it vastly more affordable to make a phone call since they don't charge the usual exorbitant tariffs and excessive user fees. Governments have responded by shutting down these operations, seizing equipment and cutting off service to lines they suspect of using Internet telephony. Part of the boom is related to the wait times for getting a phone line (Ghana Telecom has a backlog of 300,000 line requests), poor quality of service (50% of time you get a busy signal instead of a dial-tone) plus the willingness to trade voice quality for basic service. Foreign companies are now setting up VoIP call centers and multinationals like gold giant Newmont Mining plan to use VoIP for communications in and out of Africa. Some observers call Accra the next Bangalore, predicting a boom for the region that may make sub-Saharan Africa a major technology hub. This fits nicely with Kofi Annan's drive to use the Internet and wireless networks to change the lives of the poor."
Does your phone company require a "hot" line for DSL? They (often) don't here; you can have DSL without even paying for dial tone service, and at prices roughly equal to what you describe. So, even at your asymmetric rates that comes to $4 a line for voip - about a quarter of what you were paying just for the internet connection back in "modem days."
I was in Ghana a few months ago for twelve weeks.
VOIP is illegal, aside from strictly personal use as it represents potential for competition with the phone company. Ghana Telecom only wants to implement VOIP such that it may save them more money to increase their bottom line.
In fact, as I understand it, they have implemented it to a rather large degree, and have yet to pass any savings to their extremely poor customer base. Internet cafes outside of the capital, Accra, often pay somewhere in the vacinity of $1000 per month[1] simply in long distance charges, as no ISPs exist outside of the two major cities. Despite the fact that the infrastructure exists to extend leased lines and add pops in many locations throughout the country, Ghana Telecom has no interest.
USAID, in an ill-advised attempt to help has set up and fully funded telco charges for some remote internet cafes but left behind no administration, allowing the established companies to severely undercut their competition.
[1]: 8,400 Ghanaian cedis equal one US dollar. Many people outside of the two major cities (Accra, Kumasi) often make under 100,000 per month. While this is often sufficient for housing and food, twenty cents per minute long distance charges are simply outrageous.
Its amazing how open source voip is unknown. Unfortunately not many people know this even exists. What a shame !
If you are looking for a nice Open Source VoIP client that works on Windows, Linux, and OS/X, try Speakfreely. For linux/osx track down the Tcl/Tk GUI.
encryption, multiple codecs, NAT, the works.
http://www.fourmilab.ch/speakfree/
The original author and once-again maintainer is John Walker, founder of Autodesk, Inc. and co-author of AutoCAD. (!!!)
note: the debian package is criminally out of date and www.speakfreely.org is depreciated, out of date, and morphed into a commercial site.
~.~
I'm a peripheral visionary.
One of the worlds largest Voice of IP rollouts is almost complete at the Australian National University (ANU), with over 1500 handsets already installed. For more info see here.
The Quality of Service (QoS) issues (lag, jitter, etc) were overcome using tagged VLANs and prioritising voice over video and other general data traffic. The Gigabit eithernet backbone is in a meshed star topology, supposedly providing five 9's (99.999%) reliability. Multiple gateways connect the internal telephone system to the outside analogue world.
Looks like Africa has some competition.
Disclaimer: The tech scene in Ghana was and is probably changing at a phenomonal pace. Anything I say below could be wrong not only because it might be completely outdated, but also because it's a complicated place both politically and technologically. But to the best of my knowledge, the information below is accurate.
I was in Ghana as a volunteer last August, and I actually worked for a Ghanaian ISP that terminated VOIP calls, in addition to consulting and helping other "ISP's" set up VOIP gateways.
The legality was murky at best. Everyone gave me conflicting answers about whether it was legal or not. From the prevalence (I'll explain later), I would say that it's certainly tolerated. Few people (if any) ever got busted for doing VOIP. Part of the reason is that corruption is so rampant, you can easily dash (bribe) your way out of any trouble if you're willing to pay up.
Most "Internet Cafe's" or ISP there (most) with their own satellite were doing VOIP. The math was easy. A 512 down/384 up connection were costing about $8,000 U.S. per month (this is before fiber became available). You can't sign up any decent amount of dialup customers because most people didn't have phonelines and GT (Ghana Telecom) would take its sweet time pulling lines.
In fact, it took something like 18 months I believe for the NGO that I was volunteering for to get two lines (and I believe they had to totally work their connections). Almost all businesses and expats resorted to cellphones (the dominate player was Spacefon, I believe it's actually a scandinavian company that worked out some sort of a sweet deal that can't be revoked). But it's almost impossible to call a cellphone from a landline or vice versa (another long story, also has to do with the fact that GT is a government owned monopoly).
Internet Cafe's were a joke. They typical charge was something like 4,000 cedis to 10,000 cedis per hour. That translates to about 40 cents to just over a dollar. Nevermind whether the typical Ghanaian can afford those prices, if you have to pay out something like $8,000 per month just for the bandwidth, you simply can't make your money back.
So instead, what you do is to set up an "ISP/Internet Cafe" and you really do sign up customers and such. But what you really do is to get GT to pull a bunch of phonelines to your premises. Then you install a VOIP gateway and negotiate with western telecomms to terminate calls to those phonelines. That was the only way that they can pay for the bandwidth. Even in the U.S., voice services are much more lucrative than data services.
The "ISP" that I worked for not only terminated calls of their own, they also helped other places set them up as well (they charged a consult fee in addition to getting some sort of kick back from the bandwidth provider). I personally help with a couple of those and helped setting up a traffic shaper/bandwidth limiter.
They were actually in negotiations with GT to help them set up a prepaid card system that used VOIP. But I don't believe it ever got anywhere. The trouble with GT is that they had a monopoly and didn't have any incentive to be competitive. And because long distance voice services profits are very high, they have almost no reason why they want to change things.
So while private companies are definitely adopting VOIP, I don't believe GT is actually taking advantage of the technology. I actually sat in on a meeting with some higher-ups at GT. They didn't seem to care that it's a good technology or it would be the right thing to do. The primary interest definitely seemed to focus on how they (personally) would benefit. It's not out in the open of course. And they would never mention it. Only how there are little things that are wrong on your applications and paperwork, and how they just haven't had to chance to pass it on to the right person yet.
Either way, it was certainly flourishing. Just about every client visit where the "ISP/Internet Cafe" that had a satellite, there were VOIP gateways terminating calls.
I spent several months working in Nigeria from 1999-2001. My client, a large business, had installed expensive VSAT links to its six or seven locations around the country - Lagos, Ibadan, Kano, etc. The satellite links provided a data channel (128kpbs, I think) and two voice channels. But what people really used the network for was VoIP, since the normal Nytel phone lines are so bad. People would find a pair of loudspeakers, a microphone, Netmeeting, and then shout at their PCs all day long. Very funny.
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Excellent post. I was going to write a similar note but I'll second this one and add to it.
Circuit-switched telephone networks aren't actually costly to build nowadays -- the competitive-bid price of circuit-switching (TDM) gear is a small fraction of what it was 15 years ago. Lucent and Nortel stock suffers as a result. Undersea cable bandwidth is also much, much cheaper. If one evaluates the cost of building a new wireline network from scratch, then TDM/circuit is not much costlier than VoIP; it could even be cheaper. BTW I do this for a living so I see the real prices.
However, most underdeveloped countries do not treat the telephone network rationally. It is a government agency, and its primary purposes are employment and taxation. Actually providing good service is secondary.
So the price of international calls is kept high. Outgoing rates are high because it's viewed as a luxury -- only a small fraction of the public can afford it, and those foreign businesses are rich, so they can subsidize the telehone network's employment role with very high prices. The price of incoming calls is held high too -- they charge high "settlement" fees to international LD carriers, who reflect them in their rates. That's why international call rates vary so widely between nearby countries. The price, then, has nothing to do with cost, and more to do with what a monopoly can get away with.
VoIP's role here is not technological goodness, it's stealth. Users can cloak phone calls inside IP packets that aren't metered at the country's borders. Thus they get around settlement fees on inbound calls, and don't pay the ridiculous outbound rates. This is good, from an economic perspective (arbitrage removes price distortion), but it makes VoIP look relatively better than it should. Government action distortions outside perspectives on technology.
If these countries really wanted to join the wired (and BTW even cell phones are "wired" in this sense) technological world, then they should rethink their adminstrative policies towards telecommunications in general.