Alec van Gelder and Timothy Cox: Opening up markets to competition will improve Africans' access to life-changing communications technology (whereas Western aid propping up telecommunications monopolies will not)

Alec van Gelder is Project Director and Timothy Cox is Research Fellow at the International Policy Network, a development think-tank based in London.

Yesterday’s Man, Gordon Brown, was pitching Yesterday’s Idea at the African Union Summit in Uganda over the weekend. He thinks foreign aid will help telecommunications kick-start Africa’s lagging businesses.  It is an idea shared by Secretary of State for International Development, Andrew Mitchell, who has lauded the plan as “extremely sensible” in this week's New Statesman. Yet African economies have already demonstrated that building modern telecommunications infrastructure has less to do with government oversight and more to do with free enterprise.

Brown’s proposal is appealing but misguided. He thinks that because new technology has the power to revolutionise life for millions of Africans it needs government involvement — and our aid money.  This ignores the reality of African mobile telephony, which has boomed over the past decade.  When given the freedom to operate, Africa’s private sector has proven to be the best provider of life-changing communication technology to the poorest. A third of Africans now own mobile phones and almost 60 per cent of the population lives within range of a mobile signal.

Kenya provides one of the best examples of an open telephony market successfully serving millions of poor consumers.  At the beginning of the previous decade less than one per cent of Kenyans had access to a landline and just 3.7 per cent had mobiles. Yet the Kenyan government had had the foresight to increase competition with the former monopoly Telkom Kenya by auctioning new mobile licenses.  Local and foreign private investors were already investing in new infrastructure: now 42 per cent of the population has a subscription, and over 95 per cent has signal coverage. And access is even higher than the subscriber base suggests, because phones in rural areas are often for shared use.

However, access to technology varies greatly from country to country.  Botswana, with three competing providers, now boasts more mobile subscriptions per capita than China: 78 per cent of the population. By contrast the state-owned Ethiopian Telecommunications Corporation, continues to exploit a monopoly over service provision. Consequently, with no incentive to improve service or lower prices, only 3.7 per cent of Ethiopians have access to a mobile phone, and 1.1 per cent a landline.