Telecom companies in the country are largely reluctant to expand broadband services to the rural areas of the country. Charles Benoni Okine & Rita Adongo write on government resolve to reverse the trend.
The Government has negotiated for the release a US$150 million loan facility from the Chinese Government for the expansion of broad band services to all parts of the country.
The project would be undertaken by Huawei Technologies Company Limited from China is to boost business activity in that part of the country.
The Minister for Communications, Mr Haruna Iddrisu, dropped the hint at the opening of the second Ghana Telecom Summit in Accra.
“It is the resolve of the government to see to the extension of broadband services in the rural parts of the country and that is why we have gone for that money to undertake such a project”, he said.
Presently, broadband penetration in the country is put tentatively at about 10 per cent following the landing of the Glo One and Main One fiber optic cables in the country. There already existed Sat 3 which is presently owned by Vodafone.
With these, the total installed capacity is estimated at more than one trillion terabytes, a capacity huge enough to reach every part of the country to facilitate economic activities.
Many businesses, particularly the banks and other financial institutions are unable to extend services that are technologically based such as Automated Teller machines among other there because of there is no available service.
Internet and mobile banking has also become the order of the day but the rural people are unable to enjoy such services and are being made to continuously rely on the same traditional banking style where a customer has to walk to the bank to manually fill a form to withdraw cash, even the smallest amount.
Other businesses which rely on less paper and had to locate in the hinterlands to do business are also denied the opportunity and, therefore, the gap between the rural and urban centers continues to widen.
Presently, all institutions are concentrated in Accra and making the city choke with huge levels of traffic.
There are attempts to find out the correlation between the non-availability of broadband service in the rural areas and the impact on productivity.
But Mr Iddrisu said the government has recognized the economic lose to the state, hence its resolve to find the funds to make that service available to the rural areas of the country which seem to be deprived of good things.
He said the government has also announced tax breaks for telecom companies that push deep into the rural areas with their services.
But, the telecom companies have complained about the huge investments required in doing so and the level of returns on their investments.
Mr Iddrisu bemoaned the fact that the rate of internet penetration in country was still abysmally low as compared to the country’s Western counterparts although it was one of the best in the sub region.
He added that it was time as a country to gradually walk on to a paperless era with the presence of e-applications hence the need for an expansion and improvement in the broad band service of the country.
“How do we reach the age where we also use e-applications such as e-banking, e-health and e-educations without an effective broadband?” he asked and noted that until the resolve is made, there will be no breakthrough.
Economic broadband impacts of broadband.
Meanwhile with the proliferation of broadband connections worldwide, the Internet is increasingly described as being always on and with a minimum speed of 256 kbps. This broadband Internet moves well beyond traditional dial-up and mid-speed Internet (e.g., less than 256 kbps) in terms of the applications it supports and the value it offers.
While dial-up Internet offers some additional value over telephone communication, in terms of basic Internet browsing, e-mail, and simple document transmission, most agree that the Internet’s full capacity is only realized through broadband Internet that allows the use of multiple ICT applications and services.
Assessing the economic benefits and impact of broadband Internet is fundamentally different to assessing the impact of telephone communications, for the following two reasons:
First, a broadband Internet connection does not in itself provide any value or service, thus contrasting with a traditional telephone connection that provides an instant use and benefit through immediate and direct verbal communication (saving travel costs and time of alternative means to communicate). Only the use of Internet services and applications made possible through a broadband connection create benefits for the user, such as remote network access, VoIP services, video-conferencing, and online-banking among others.
Second, the realization of benefits from broadband for a country is strongly dependent on overall conditions such as the: regulatory framework (example; security for e-commerce transactions, laws for on-line banking, among other things); business environment such as computer penetration, ability to develop skills, capacity for organizational change; supporting infrastructure in terms of reliability and electricity; and ICT literacy among the population, among others.
Like electricity, ICT may be considered a general purpose technology, which is characterized through its pervasiveness throughout the economy and society, its constant evolution and improvement, and its capacity to spawn new innovations.
Measuring economic benefits of broadband
Due to broadband Internet’s multitude of applications and its recent national spread in certain markets only (in many developing countries it is limited to the main urban areas only), it is more challenging to measure its economic impact than traditional telephony. As a consequence, the situation for measuring the impact of broadband can be summarized as follows:
- It is still in a nascent stage – the first attempts at gathering empirical evidence were made in 2003 in Ontario, Canada and in 2005 with national scale data from the United States
- It is often restricted to the developed and most advanced nations; and
- There is little quantifiable proof and no internationally comparable data of value.
Also, in developed countries the impact of broadband is measured at the individual subscriber level, while most developing countries are aiming at providing broadband at a community level.
A method to measure the benefits from services used via a broadband connection in the developed world is to make the simple assumption that the direct benefit must be higher than the cost of the broadband connection to the subscriber, otherwise they would not subscribe. The assumption is that the subscriber has conducted a personal (or household) cost/benefit analysis and has determined that the net benefit outweighs the cost. This is a reasonable assumption since the market is the final arbiter of value, and demand is the indicator of benefit.
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