Africa takes its e-mail to the post office

Edited/Distributed by HURINet - The Human Rights Information Network
## author     :
## date       : 26.10.98
INTERNET: Africa takes its e-mail to the post office

Mark Turner reports on attempts to bring the internet to a
continent with few computers [Financial Times, UK]

  In an industry dominated by American technology and
  know-how, one small African internet company has   come up
  with an exciting home-grown strategy.

  Over the past two months Africa Online has registered
  30,000 e-mail customers in Ghana, a country which   only
  had 20,000 personal computers at the last count.   Ayisi
  Makatiani, the company's 32-year-old Kenyan chief
  executive, estimates his clientele will triple by the
  end of the year.

  The secret is an exclusive deal with local post offices,
  through which Africa Online offers any Ghanaian an
  e-mail address free of charge. Customers can then   send
  messages at around 25 cents a go.

  "It's wonderful: everyone makes money," enthuses   Ayisi
  Makatiani, who co-founded Africa Online in 1994   while at
  the Massachusetts Institute of Technology.

  "To begin with we help the post offices set up, and split
  the fees 80:20. Later on that will go down to 55:45. It's
  like a post office box, except ordinary Ghanaians can
  boast they have an e-mail address."

  This kind of innovation recently prompted UK-based
  African Lakes to acquire Africa Online from its   American
  parent Prodigy, injecting much-needed   finance after a
  year of fast growing sales but flagging investment.

  Africa Online already operates in Kenya, Tanzania,
  Ghana, Côte d'Ivoire and Zimbabwe, and there are   plans
  for further expansion. Its internet subscription   base
  has grown from 3,000 to 8,000 in two years, and   in 1998
  revenues are expected to exceed $6m.

  Mr Makatiani is still pinching himself. Africa Online
  started life "basically as a mailing list for Africans in
  the US, which told people about parties and African
  news", and later offered similar services to Kenyans at

  When Prodigy was taken over by Mexican   entrepreneur
  Carlos Slim's telecom group last year,   Africa Online
  started looking for alternative finance; this   October,
  after scarcely two months of talks, African Lakes took the

  But if it wants to live up to its dreams, Africa Online
  still has its work cut out. Sub-Saharan Africa,
  excluding South Africa, only had 4,000 internet host
  computers at the beginning of the year, and one user   per
  5,000 people.

  That compares to one per six in the US and Europe.

  Poor telecommunications and tough regulations across   the
  continent add to the frustrations facing a market   that,
  although growing, remains fundamentally stunted   by low
  incomes and high overheads.

  Mr Makatiani admits the past year has been difficult. A
  lack of finance has meant Africa Online in Kenya could
  not buy until now the 512 kb/second line needed for   fast
  access for its growing clientele.

  "A 512kb line costs $100,000 a month," complains Mr
  Makatiani. "In the US you get twice that for $1,000 a
  month This is reflected in prices: a monthly
  subscription in Kenya with 20 hours free access costs
  more than $80 a month.

  Although communications are cheaper in Tanzania, the
  main problem has been finding adequate sales and
  marketing staff, while in Côte d'Ivoire tough labour laws
  can prove "very punishing", according to Mr Makatiani.
  Good managers are difficult to find throughout.

  Perhaps surprisingly, the one challenge Mr Makatiani   has
  not faced is finding good technical staff. "The   problem
  is not training people - the internet is simple,"   he
  says. "The real difficulty is keeping them from being
  stolen by higher-paying companies."

  Despite these pitfalls, Africa Online remains firmly
  convinced that it is on to a winner.

  Advertising, news services, specialised telecoms
  services and electronic commerce are all around the
  corner, says Mr Makatiani. "When Kenya's Telecom is
  privatised, we will be ready."

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