Hello, Africa? Have We Got Phones For You

A year ago, 30-year-old Nomonde Ntontela was an out-of-work cashier when she heard that Vodacom, one of South Africa's cellular operators, was looking for entrepreneurs to operate "phone shops" in black townships and squatter camps. Today, customers line up outside her business--a specially outfitted shipping container with five metered cell phones, set down in one of the most squalid sections of Alexandria.

Ntontela's customers include illegal aliens from Mozambique and parents who have left their children in rural villages to find work in the city. Private phones are virtually nonexistent in the townships; before Ntontela's shop opened, residents paid nearly $1 to take a minibus to the other side of town. The phone shop in their neighborhood, one of thousands built by Siemens, Alcatel Alsthom, and other suppliers for underprivileged areas, is clearing almost $2,500 a month. Ntontela nets about $800 after paying cellular charges, a small fee for the franchise, and her one employee. "I don't have financial problems anymore," she says--and she has started saving for a second shop.

RINGING THE CONTINENT. No question, this telecom wasteland is ripe for development. There are only 0.8 main phone lines per 100 people in all of sub-Saharan Africa--in rural areas, whole villages are without phones. Increasingly, African nations realize that their future development depends in part on connecting to the global phone network.

Money is the obstacle. African countries will need a lot more money than Western development agencies can provide. So they're cracking open phone markets to competition, privatization, and foreign ownership. Uganda, the Congo, and the Cote d'Ivoire have announced plans to privatize their phone companies in 1996, while Tanzania recently agreed to establish a second phone company, a first for Africa, with foreign ownership allowed.

But it's two megaprojects that are putting Africa on the radar screens of the world's telecom companies. South Africa, to redress decades of inequitable development, plans to spend more than $1.6 billion to build 1 million main lines in mostly black rural areas. Telkom South Africa received bids from 22 consortiums, many led by foreign telecom companies, and plans to award the contract in 1996.

The entire continent could get a boost from the second project: Africa One. This consortium, led by AT&T, plans by 1999 to ring the continent with an undersea cable, giving each nation a direct link to outside. Now, few African countries can dial one another directly--intraregion calls are typically bounced back via satellite from Europe. International calls cost about $10 a minute; a Zambian E-mail service, Uninet, pays $150,000 a year for an Internet link that would cost $5,000 in the U.S. "We think there is a huge untapped communications need," says William B. Carter, president of AT&T's submarine-cable unit. "As soon as the cable goes in, the price will drop, and demand should explode." International carriers eager to get a share of those future calls are financing 70% to 80% of Africa One.

Getting financing for other African projects has been tougher. But that may be changing, says Bert de Grave, head of international operations for Alcatel, a longtime supplier to Africa: "South Africa's opening up gives a certain comfort level to foreign investors." To promote more investment, the U.S. Agency for International Development has started a $75 million program to help African countries with regulatory reform and other changes. "The region is ready," says Wade Warren, director of the program. Increasingly, foreign phone companies are, too.

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