After a weeklong visit to
somewhere new, the most important thing to remember is
that one trip does not make you an expert. Still, I
cannot resist commenting on my recent trip to Accra, the
capital city of Ghana, in Western Africa.
Among my meetings there, I joined a lunch discussion
with local entrepreneurs and government officials about
opportunities and obstacles to economic development. The
sponsors were BusyInternet, a local Internet cafe-plus,
and Jim Moore of the Open Economies Project at Harvard
University's Berkman Center.
Even as the local entrepreneurs were discussing the
importance of government support for their sector, one
of them, software free-lancer Ebow Halm, said, "The
government needs to consider the users' needs as well as
the IT community's needs."
Sometimes what benefits one party may harm another,
and well-meaning charity may not always have its
intended effect. That's the notion behind the site of
the meeting: BusyInternet. Created by Welsh entrepreneur
Mark Davies, it provides local people with inexpensive
Net access, much like a library or a post office.
WELSH RARE BYTES
Wealthy from two other start-ups -- Citysearch and
First Tuesday -- Davies had originally planned to set up
a nonprofit Internet service. But he quickly concluded
that a for-profit entity would do more good, reach more
people and finance its own expansion. A free service, on
the other hand, would have to be rationed and would
compete unfairly against Accra's other Internet cafes.
Rather than simply provide Net access to the poor,
Davies has set out to help the poor get rich enough to
buy their own Net access.
So as cheerful and inviting as it is, BusyInternet is
a lot more than just a cyber cafe. It's a commercial
center.
Built from a gutted bottled-gas plant on a main drag
in Accra, the two-story operation has about 100
terminals in an open downstairs, and 50 more in private
carrels and wired offices upstairs. There's also a
waiting area as well as a service center to collect
printouts (10 cents U.S. per black-and-white page) and
send packages or faxes.
Instead of opening a business incubator with
complicated rules and business plans, Davies simply
hooked up 1 megabyte of bandwidth and set up shop,
offering terminals by the minute and 15 wired offices by
the month.
The kind of people who turned up with money to use
the offices represent just the type of entrepreneurs you
could have picked with a complex development plan and
careful analysis of local needs, but they selected
themselves: small IT-dependent business people, some
e-commerce folks, but mostly Web development or
programming professionals.
The lunch we attended was only one of the activities
Davies and his local partners are building around
BusyInternet. For now, however, the basic access
business is already paying the way: Bandwidth in Ghana
is so scarce that simply providing good connectivity at
retail prices is a great business model.
In a country where the ability to communicate is very
expensive and most people have neither phones nor
computers where they live, such services would seem
wasteful delivered direct to one's home. In Accra, by
far Ghana's most wired city, there are several hundred
such cafes, averaging perhaps eight terminals each.
BEATING THE HIGH COST OF BANDWIDTH
So what did we learn at our lunch?
First of all, that Internet cafes are not just a
preserve of tourists and college students. People of all
kinds were in the cafe both times I visited. Not a
terminal was unused, and the building operates 24 hours
a day.
Mostly, customers e-mail, rather than surf, to
communicate with friends and family, hunt for jobs, or
just get things done. At $1 U.S. an hour, using the
computers for entertainment gets expensive. In Ghana,
formally employed factory workers can earn up to $45 a
month, but many people have no formal employment.
And bandwidth in Ghana costs 10 times or more than it
does in the United States. Davies pays about $8,000 a
month for his 1MB shared connection, plus a yearly
license fee to the government of $2,000.
Most of the entrepreneurs I talked to host their
sites in the United States. It's less expensive and more
reliable.
"To get across town you have to bounce through
satellite into the states and back down here, so it's
about twice as fast to host them in the U.S.," Davies
explains. "Getting a local Internet exchange should
change that and bring many servers (and jobs) back onto
the continent."
Does wire cost so much more in Ghana? Of course not.
It's more complicated than that. The country has access
to about 20MB of Internet bandwidth, which is mostly
unregulated though you need a license to offer it.
But for a variety of reasons, including investors'
perception that there's no market, capacity is low and
prices remain high.
There are plans for state-controlled Ghana Telecom,
as well as private investors and other companies, to
increase bandwidth and start a local exchange.
But what that will mean to wired Ghanians is unclear.
BusyInternet should benefit from the greater capacity
a local exchange would provide, and from a new sea-based
fiber-optic cable in the works. And its customers will
benefit from that, too, as well as from increased
competition that would improve service and lower prices.
But will BusyInternet and its competitors be viewed
as a model of development, or as a disruption of the
status quo? The business climate can seem a bit stormy
if the Ghana's government -- or its
government-controlled utilities such as Ghana Telecom --
sees emerging entrepreneurs as rivals.
But things do seem to be improving now, we were told.
And I hope it's true. Ghana's best hopes lie not with
big projects, but with entrepreneurial efforts that can
make things work on a small scale and then scale up.
Much of the country's $1.3-billion government budget
doesn't come from its economy, but from outside
donations. And most of that money doesn't go directly to
citizens. It flows into large projects and subsidized
government programs ... many of which compete with -- or
stifle -- local development.
To some, an entrepreneur like Davies may seem like a
carpetbagger: a Welshman who made his name in the North
and now runs a for-profit venture in Ghana. But if he is
successful, he will build more facilities, raise the
current 40 percent local share of ownership, hire more
Ghanians, and offer more cost-effective services to more
users. Some of those users will themselves become
entrepreneurs.
So you decide which model is better: government
subsidies and control or a little old-fashioned
carpetbagging.
