Tangled cellular web.
COMSTAR is not alone: Two other companies are stuck in the same predicament. Without the blessing of CI-TELCOM, they cannot connect their cellular subscribers to the existing telephone network or to the rest of the world.
COMSTAR's inability to actually get on the air - despite a new liberal telecommunications law - underlines the urgent need to privatise the debt-ridden and over-staffed CI-TELCOM. It also raises suspicions concerning the amount of influence the French Government-owned France Telecom has over CI-TELCOM.
Later this year, an international tender for 51% of CI-TELCOM will be issued. This includes a seven to 10 year monopoly concession for a fixed-point telephone service. At the moment it is impossible to tell just how lucrative a cellular business could be. But potential investors are enthusiastic about the profit scope of a privatised CI-TELCOM.
That seems a long way off given the amount of foot-dragging CI-TELCOM is indulging itself. Its lack of cooperation may, in part, be the result of inexperience but the delays remain largely unexplained. More important, they subvert the Government's ambitious plans to open up the economy and create an industrialized nation in the next millennium.
Mr Akossi Akossi, Director General of the Cote d'Ivoire Telecommunications Agency, has defended the Government. In his explanation he asserted that it had to liberalise the telecommunications sector before privatising the national telephone company. Why? Because CI-TELCOM could not afford to build a cellular network.
Most people involved in Cote d'Ivoire's cellular business think the process should have been the other way around. But old monopoly habits are hard to break. One foreign analyst says, "What CI-TELCOM doesn't realise is, the moment one of these cellular operators goes on the air, it will be CI-TELCOM's biggest customer."
Tool for the wealthy?
CI-TELCOM has 75,000 unfulfilled requests for a phone service. Experts here agree that the system is, less technically faulty, than unbalanced and poorly managed. A privatised company would be able to ratify most of the requests with regular telephones. But with a substitution market absent, cellular could remain little more than a tool for the wealthy elite.
Nonetheless, the Government wants to install digital Global System for Mobile Communications networks (GSM). If COMSAT, or any other company, can get started within the next few months, it will have the first GSM network in West Africa. The attraction is slightly dented in the knowledge that it will still cost twice as much as most of the analogue networks already installed in Africa.
Cote d'Ivoire does not really have an ample cellular market to hold three cellular providers, maybe not even two. Thus the competition is on and each of the contenders is pushing to fill the, as yet, empty space.
COMSTAR, a subsidiary of International Wireless Incorporation, is ready to invest $30m now. By 2004, when it hopes to have 52,000 subscribers, total investment could reach $70m.
International Wireless, backed by Boston Technologies and Tel Mex, wants to create a GSM cellular network across the whole of West and Central Africa. Cote d'Ivoire is just the beginning. It has already negotiated a second license in Guinea. Mr Michael Phillips, Managing Director, says he has $15m worth of equipment in the USA, waiting to be shipped over the moment that promised tax advantages are confirmed.
Mr Phillips feels he has the support of the Ivoirian Government, which is even organising business conferences in California to attract investors. "American business people are in touch with me daily about this," says Mr Phillips. "When COMSTAR finally starts up, the rest of the world will say, 'Boy, maybe Cote d'Ivoire is a good place to invest dollars.'"
The third bidder, France Telecom, received a license in 1994 along with COMSTAR, but has neither marketed itself nor erected cell sites. What it has done is to form a commercial partnership with the powerful SIFCOM Group, giving it even more marketing and political clout. SIFCOM is a major equipment importer, a partner in the local Canal+ Horizon pay TV station and the number one cocoa exporter in the Cote d'Ivoire.
France Telecom's bid
France Telecom failed to enlist SBC Communications, USA, as an operational partner. This would have been a sharp advantage given SBC's interest in the Cote d'Ivoire. But it is thought the American company thinks little of delays: In 1994 they dropped out of negotiations with COMSAT.
But France Telecom may prove lacking in the necessary urge and hands-on experience required to operate a network in Cote D'Ivoire anyway. This is the view of local telecommunications professionals in spite of France Telcom's cellular operations in France and Belgium.
But Mr Henri Neuville, Director of France Telecom's Abidjan Office, is of a different view. Still in the process of studying the location of towers, he calmly asserts that France Telecom will be the first on the air come autumn. If so, France Telecom is set to gain $28m during a 10 year cellular venture. But the figure could be substantially more: CI-TELCOM already owes it an undisclosed number of millions of dollars in long distance fees.
Mr Bergson Koffi, President of Loteny Telecom, has drained his patience even longer than either of his competitors. He obtained the first cellular license back in 1992. He engaged in technical and market studies with Teleglobe International of Canada. But CI-TELCOM had already dug in its heels against cellular competition. The joint venture with Teleglobe subsequently dissolved in 1994.
Such was Mr Koffi's need for a financially fruitful operational partner, he was almost forced to give up. But a few days before his provisional license expired in March, he got a call from Telecel International.
With headquarters in the USA, Telecel operates eight analogue networks in Africa and owns its own transponder on Intelsat 359. It started its first cellular network in Zaire in 1987 and, more recently, won a contract in the Ukraine. Few can boast a greater knowledge about operating cellular systems in francophone Africa than Telecel.
The new consortium also includes Access Telecom, a provider of beeper and trunking services in Dakar and Abidjan. Mr Koffi says he will spend $12m now and a further $38m during the next decade. He has already spent over $1m and done more research than anyone else: "If France Telecom had done one 10th of the research that I have, they would be on the air already."
He is not worried about being the first on air because he knows what the market really wants and he has "the only real Ivoirian cellular license".
Abidjan, in the midst of a boom powered by healthy coffee, cocoa, cotton and lumber prices, may be one of the largest cities in Africa without a cellular network. Neither can it lay claim to a commercial internet provider. Thus, COMSAT International Wireless and Access Telecom both hope to install servers this summer.
Consumers may not count for much to CI-TELCOM, but the Cote d'Ivoire has to untangle its cellular muddle in order to launch the privatisation tender.
If not, many potential suitors might decide, like SBC, to put their money elsewhere.
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|Title Annotation:||cellular network in Cote d'Ivoire|
|Date:||Jun 1, 1996|
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