Geo Business

 Poor states can grow online: moot

  NAIROBI: With online business increasingly driving economic growth, developing nations' top priority should be the infrastructure their citizens need to get connected, delegates at an Internet conference in Nairobi said this week.

The Internet's potential to raise living standards is under-exploited in the developing world, where just 21 percent of the population have access, compared with 69 percent in the developed world.

In a study published earlier this year, consultancy Mckinsey found that the Internet accounted for 21 percent of economic growth in mature economies, and that almost $8 trillion changes hands through e-commerce each year.

But regions such as Africa, lacking the broadband infrastructure mature economies enjoy, have an uphill struggle to encourage telecoms operators to invest in the mobile networks needed to bring the Internet to the masses -- especially when the masses have little disposable income to repay their investment.

"There is no way developing countries should sit back and wait, because online activities are driving offline activities," said Joe Mucheru, head of Google in Sub-Saharan Africa.

Participants at the United Nations-sponsored Internet Governance Forum said there was a need to expand infrastructure such as undersea cables and wireless networks for markets where the primary mode of connection to the Web is by mobile phone.

Increased bandwidth capacity and increased competition will cut prices and allow more people to get connected, government officials and company executives attending the forum said.

SPOTTED OPPORTUNITIES
Some Western telecoms operators facing stagnation at home are prepared to make big bets on connecting developing nations; France Telecom, under the brand name Orange, is seeking to double its revenue in the Middle East and Africa to 7 billion euros ($9.5 billion) in the coming years.

It is already present in Egypt, Tunisia, Senegal and Kenya, among other African countries. One of its present projects is the building of an undersea cable to improve Internet connectivity in west Africa.

"We've prioritized spending on the undersea cables, since that will really be a vast improvement to what is currently available," said Thierry Bonhomme, head of networks at France Telecom.

Today, much of Africa's Internet traffic is delivered via satellites, which have far less capacity and connectivity than the intercontinental cables that are slowly being built.

In Nigeria, it costs $1,100 to buy capacity per megabyte on the Lagos to Abuja link -- nearly double the $600 it costs to buy the same capacity on the much longer Lagos to London link, due to the lack of internal infrastructure once the signal reaches Africa.

Executives of cable operators there have been lobbying the government to formulate forward-looking policies that can help cut the costs of moving capacity within the country.

INTERNET A HUMAN RIGHT?

Bitange Ndemo, the top official at Kenya's ministry of communication, says the answer lies in the construction of a national fiber network to take capacity brought on submarine cables to homes and businesses.

"I ask you to make (access) to this resource (high-speed Internet) a human rights issue," Ndemo told participants at the meeting.

"If access to broadband is declared a human rights issue, then governments will step in and invest so no human being is left behind."

The east African nation, whose approach to provision of communication infrastructure and industry-friendly regulations was promoted by delegates to the conference as a viable model for other developing nations, is in the process of putting up a next-generation LTE network -- more advanced than most developed economies can boast -- to be run by several firms.

The mobile phone is the primary tool of access to the Internet in Africa, driving some handset makers such as Nokia to incorporate Web functions into their latest low-priced models aimed at the continent.

In light of that, Robert Pepper, vice president for global technology policy at Cisco Systems, said African nations could increase access to the Web by switching off analog television in favor of digital TV and using the spectrum used by TV stations for wireless Internet networks.

Nations that impose steep taxes and levies on landing rights for firms that are building submarine cables connecting the continent with the outside world will miss out as the cable operators bypass such nations, delegates to the forum warned.

"Traditionally, international telecom firms were seen as a source of foreign investment and international currencies. Now, if governments have high fees and taxes for cable landings, operators will just by-pass those countries," said Cisco's Pepper.