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FairTrade Broadband

by Adrian Wooster
FairTrade roadband
C8N i
FairTrade roadband
Contents
Executive Summary 1
ackground 2
FairTrade roadband 3
Vodels for Success J
Cooperation 4
Local E Pemote 8alance 5
Services for Trade 6
Communication is King 6
Crowing Expertise 6
Recchn the commnty Z
8edrock of Technology 7
A VirtuaI Dperator 8
eyond FairTrade
An NC0 Story 9
Education for All 9
A PIan of Action 10
About CN 12
About the Author 1J
0o you know C8N: 1J
Consltn Servces 1J
Events 1J
Contact 14
Appendices 15
A Chana and Telecommunications 15
lnternctoncl Ccpccty 15
The Competton 1
C8N ii
lmportcnt
The material contained in this document is
private information. and is not to be
copied. altered or transmitted. either in
part or whole without the consent of the
author.
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C8N iii
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Executive Summary
8N has recently been engaged in a number of projects in subSaharan Africa. This work
has highlighted the challenges many organisations have in obtaining the kinds of
telecommunications services Europeans take for granted. The reasons for this are
numerous and are no doubt affected by local conditions in each country. but a number of
themes underly everything resulting in very low levels of CT investment.
C
Firstly access to suitable and affordable nternet services is scarce. t is common for
broadband packages to cost an order of magnitude more than we might expect in Europe. and
for connection speeds to be significantly lower than we might consider reasonable. Pefer to
the Appendices for a brief review of the Chanaian telecommunications market as an example.
Secondly. access to skilled T expertise is often difficult to source. and local reference
projects can be thin on the ground making it difficult for businesses to gain an understanding
of how CT might assist them.
What is being proposed is a FairTrade 8roadband provider. created as a cooperative social
enterprise. The first goal will be to negotiate a satellite broadband agreement across sub
Saharan Africa. which will provide affordable bandwidth in packages specifically designed to
meet the needs of the FairTrade and NC0 communities. The second goal is to develop
delivery mechanisms which develop local skills in member countries. t is hoped that these
skills will benefit the community beyond the immediate needs of the member.
As a cooperative organisation. the intention is to divide any trading surplus in three ways:
Peinvestment into new services
0ividend to members
Funding technology related educational projects in member countries
0nce membership is sufficient. the plan is to become a "virtual network operator"; this will
allow us much greater control to shape and manage services. However this will require
significant seed investment. n the interim. we will secure a reseller service which will offer
cost savings over many existing African broadband offerings and some control over some
aspects of the service.
We are seeking initial commitment to support the service. and sources of seed funding. We
are looking for a commitment to order 50 broadband connections. and seed funding of
f500.000. The seed funding will achieve two things; secure the hardware for the initial
customers which will then be rented to the founding members. and place up to five "fly
away" satellite terminals on the ground where they can be used to train local businesses and
support teams while also providing a rapid response in the event of an emergency
intervention by NC0's.
C8N 1 Executive Summary
Education for AII - Chana
8ackground
n recent months C8N has been engaged in a number of small projects in Africa. 0ne of the
commonalities between each of these projects was the cost of nternet connectivity across
the continent; broadband services comparable with Europe are virtually nonexistent. and
the pricing of what is available is astronomically more expensive than anything available in
Europe.

For example. Kuapa Kokoo have a broadband service installed in their Kumasi headoffice.
This is provided by a local company offering wireless broadband using lowcost equipment.
The service is costing Kuapa f2.000 per year yet the contract is for just 10 kbps download.
bursting to J2 kbps speed if capacity permits. and an unusable 4 kbps upload speed; this is a
fraction of the speed of a basic dialup service and below the level of service permitted under
UK law
1
. n contrast. a fairly standard business class broadband service in the UK would cost
no more than f500 per year and will deliver up to 8 Vbps; in other words 800 times faster for
a quarter of the cost.
This is by no means a criticism of Kuapa's choice of internet provider; this is not an unusual
package for the region. t is. however. a damning comment on the global telecommunications
industry; this is not the fault of African operators and governments alone. with many
European and American operators helping to create the environment.
The reasons are often cited as complex. and it is certainly easy to be distracted by some of
the detail. but there is no underlying reason for telecommunications to be any more
expensive in Africa than in any other continent.
Take for example satellite broadband. All satellites fly above the equator regardless of
whether they are providing services to Europe. America. or Africa; the ground stations. where
services return to earth and join the nternet. are typically in Europe or America regardless of
where the customer is; the equipment needed at the customer site is the same regardless of
where its installed. n other words. there are no technical reasons why there is any difference
in the packages or pricing of services available anywhere on Earth but comparable services in
Africa are significantly more expensive than in Europe.
The focus of this report. therefore. is on models for sustainable telecommunications services
across subSaharan Africa with an emphasis on the FairTrade sector. The second part of the
report applies these ideas to Kuapa Kokoo. to show how this might work in a real business.
The goal is to help local businesses in developing countries to benefit from the power of
technology in a manner which is sustainable and appropriate for their needs. The result will
be a specialised niche internet service provider which is able to bypass many of the problems
with telecommunications markets in developing countries.
1
The UK's Telecommunications Act states that any connection speed below 28 kbps is not fit for purpose. even
when using dialup services on legacy "P0TS" telephone lines.
C8N 2 8ackground
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here are many things which make the FairTrade movement an attractive focus for a
telecommunications service which attempts to overcome the market challenges of
Africa. Firstly these are businesses which need a sustainable service which is only viable
if it makes a different to their business; this is essential when developing an nternet service
as capital grants will typically on cover initial setup costs. Secondly. there are typically
strong business support networks through bodies such as Twin Trading. ensuring that
technology can be applied in a sensitive and effective manner to organisations with little or
no local reference information to build on. And finally. there is some commonality between
FairTrade businesses which allows services to be honed to their specific requirements.
optimising the impact; they are typically agriculturally based. for example.
T
Vodels for Success
C8N members have successful developed over 200 communitybased broadband projects in
the UK. and much of this expertise will be of direct import to this project. 0elivering
technology is only a small part of the success of a project like this. A partner organisation of
C8N's. Close the Cap. cites seven pillars of a successful project
A viable business model
An "Us Feeling"
A set of basic services
Additional local services
Community communication
Customer care
A quality network
0nly the last of these really focusses on the technology. and over half of the pillars are
something which can only be delivered with local knowledge. n broadband terms the word
"community" has tended to mean a group of people located together geographically. While
the African FairTrade businesses are far from colocated. the philosophy of the seven pillars
and the sense of community remains appropriate.
The focus of the project on business support for FairTrade organisations firmly ensures that
there is a viable and sustainable business model underpinning the service. Vore detail of how
this may be structured and develop is discussed later in this document.
C8N J FairTrade 8roadband
Education for AII - Chana
Cooperation
The second tenet of community broadband is to develop an "s feeln"; one way to ensure
this through a cooperative structure. giving the customers a say in how the business is run.
its future strategy. and the shape of the service set.
Vany FairTrade organisations are familiar with this structure and should feel comfortable with
it. Each organisations opting to source services from the FairTrade SP will become a member
with an opportunity to become elected onto the management board and to influence the
future direction of the business and services.
The cooperative movement defines a set of core principles:
7oluntary and 0pen Vembership This project will be open to any FairTrade or
charitable organisation seeking broadband
connectivity in developing countries
0emocratic Vember Control All members will have the opportunity to nominate
and elect the board. and will be encouraged to
participate in the organisations strategic processes
Vembers' Economic Participation A proportion of the project's surplus will be returned
to members in the form of a dividend
Autonomy and ndependence While the project will need to raise seed funding. and
may from time to time develop other contractual
relationships. these will be done on terms that ensure
democratic control members.
Education. Training. and nformation A core role of this project is to develop members
ability to use technology effectively. and to build in
country expertise. Further. a proportion of the
projects surplus will be used to fund educational
projects in member countries.
Cooperation Among Cooperatives Through C8N and other relationships. the project will
actively seek to promote relationships with other co
operative organisations.
Concern for Community This project will have little impact if it fails to focus
on the wider communities of members. 0nly in doing
this will local projects continue to be sustainable.
These Pochdale principals could not be more appropriate to the needs of this project. 8eyond
the key theme of democracy. the intention is that any surplus the organisation generates will
be split three ways:
Peinvestment in new services
0ividend to member organisations
Support for educational CT projects in member countries
The goal of this mechanism is to ensure that the business remains sharply focusses on the
needs of its members. both in the short and longer term.
C8N 4 FairTrade 8roadband
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Local E Pemote 8alance
A key to the success of a FairTrade broadband service will be achieving a balance between
what can be offered locally in each country. and what needs to be delivered from a central
point. Cenerally. unless there is a critical benefit. the service should be delivered and
managed locally. However. in some key areas this makes little business or technical sense.
For example. it makes no sense to replicate a network management centre in each country
when a single central system will be more efficient.
Each member country will develop a local delivery team. ideally from within the local
member businesses. This team will provide internal T support for the members. drawing on
the expertise of the other national teams and the central body. The nature and scale of the
local services offered by the teams will be shaped by local needs. resources. and skills.
The role of the central team will be to coordinate assistance to fill and gap between the
local member needs and what is delivered by the national team. f a service is core to local
members' businesses. its not overly complex. and it changes infrequently then its an ideal
candidate for the local team. However applications which are not core to the business. are
highly complex or subject to frequent changes are typically candidates for external support.
C8N 5 FairTrade 8roadband
Education for AII - Chana
Services for Trade
While its clear that FairTrade businesses. like any commercial organisation today. will benefit
from basic email and web browsing. there are fantastic opportunities to deliver much more
because of the common challenges and opportunities facing generally agricultural businesses
in Africa.
For example. delivering a core set of business tools. such as customer relationship
management (CPV). warehouse management. and so forth can be done in a sensitive way.
backed up with experienced business and technical support.
Technology is increasingly being used in western farming methods but this can be complex
and expensive. For example. the use of geographical information systems (CS) can deliver
significant benefits but they are notoriously complex to develop. t is quite possible that a
centralised CS service could be delivered which overlays business information with local
geographical information.
Communication is King
A remote. handsoff service provider is no different to any of a thousand organisations. and
will be unable to communicate with its members in a way which can be understood easily.
There is a growing tendency to use increasingly complex terms to describe services and
benefits. This is often considered a failing in a modern knowledge economy where T literacy
is high but in emerging markets. home to the many FairTrade organisations. T literacy is
much lower and may be nonexistent.
Communication must be in plain language. ideally provided by local people who understand
local culture. customs. and language. Centralised diktats will fail to engage members. and
the use of technological terms will miss the point of this project. While a modern. slick
support system will be required. the first port of call will be local people; balancing clear
communication in the local language. with professional and international expertise.
Crowing Expertise
The balance between local and remote services will encourage members to engage with the
development of new applications and to grow local expertise. A role of the central body will
be to encourage and foster this process. and to coordinate skills sharing. As national teams
grow in confidence and stature. it is hoped the project will develop distributed centres of
excellence which other members can draw on.
0ne member. for example. may develop a detailed understanding of alternative energy
sources out of the local necessity. Acknowledging these centres of excellence and promoting
them will further enhance their skills and. over time. will deliver a firstclass technology
platform for the benefit of all members. from the ground up.
C8N 6 FairTrade 8roadband
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Recchn the commnty
n order to make investments in new technology sustainable for member organisations. the
aim is to draw on C8N's expertise in community broadband and engagement. For example. it
is highly likely that the kind of nternet capacity this project will be able to deliver could
become a valuable community resource as well as serving the members own needs. This might
take the form of an nternation 0irect 0ial telephone service and nternet caf. or may allow
the connection to reach the local hospital or district assembly.
The goal is to transfer knowledge gained in the UK to member organisations. so local
expertise can deliver services which will help support the running costs and engage with the
community.
8edrock of Technology
The prime underlying tenet of this project is to develop a global community
internet provider and a valuable source of technology advice. n the search
for this goal there should be no barriers to adoption. n this regard. the
preference should be for 0penSource solutions where they exist. Firstly.
0penSource solutions reduce the financial barriers where there is a
structured support framework. Secondly. the community development
ethos of 0penSource software dovetails with the ethos of a
communityrun FairTrade service provider.
C8N 7 FairTrade 8roadband
Education for AII - Chana
A 7irtual 0perator
iven the geographical reach of the FairTrade and NC0 sectors in subSaharan Africa.
initially at least. only satellite technology can provide the coverage. As time progresses
other technologies may become feasible. such as direct access to the EASSy and SATJ
fibre projects following the east and west coasts of Africa. A sample analysis of the Chanaian
market can be found in the Appendix as an example of the challenges faced by organisations
in Africa.
C
0ne of the core reasons for developing this project is because the satellite industry has
something of a stranglehold on African internet connections. charging many times what a
European business may expect to pay for a comparable service. 8reaking this stranglehold will
require centralised negotiation in Europe for what is termed a "virtual network operator". or
7N0.
A 7N0 solution would allow the project to benefit from operating its own satellite network
without the cost of buying the hub infrastructure. Essentially it involves renting network
capacity from a single physical provider which is isolated from the resources rented by other
service providers. and is largely managed by the host operator. This permits more
competitive broadband P services packaged in a way which meet the FairTrade movements
needs. without the significant upfront investment traditionally associated with building a
satellite service from the ground up.
8y managing our own service. it will be possible to develop flexible services which meet the
needs of our members. Vany existing satellite services are focussing on large corporate
solutions or on the broadcast market. both resulting in highcost services beyond the need
and pockets of most organisations. For example. a standard SVE package might offer 512 kbps
symmetrical broadband connection. contended at 50:1. while typical satellite offerings will
often start at 10:1 or less and tend to be highly asymmetrical. This may make them suitable
for delivering video content in one direction but is not ideal for running many interactive
business applications or twoway voice solutions.
However. a typical satellite agreement will require a minimum commitment. Typically this
will mean 50 founder customers and an investment of f250.000. The investment will secure
all the hardware for the founder members. which will then be rented to the subscribers in
order to keep the barriers to technology adoption as low as possible.
A further f250.000 will buy up to five "flyaway" terminals which can be help in the founder
member countries. These terminals will be used in three ways. Firstly they will be used as
training and awareness resources; secondly they can be used to provide ad hoc flexible
services to members; and finally they will be available locally for rapid deployment for NC0's
during emergency relief work.
C8N 8 A 7irtual 0perator
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8eyond FairTrade
he central focus of this document is very clearly on developing services and support
structures for the FairTrade sector. However. there are many overlaps and
commonalities with other sectors in subSaharan Africa. and it would be wrong to ignore
opportunities to to assist where it is possible and doesn't detract from the core focus.
T
An NC0 Story
While the core focus of the report is to develop services for businesses. there is an
opportunity to help NC0's working in subSaharan Africa. 0ver time. local expertise will have
been developed in many of the countries where NC0's are most active. capable of delivering
an firstclass and affordable service from a single source.
Typically an NC0 will require a vanilla service of perhaps no more than an nternet
connection for email and web access. and a telephone. Whatever the service develops for
FairTrade subscribers. these fundamental services will underly everything and could be
deployed at short notice. making it suitable for emergency relief as well as planned
interventions.
Education for All
FairTrade organisations have a well developed sense of community. and that often extends to
ensuring that their children are well educated. A goal of this project would be to share any
operating surplus between local education projects in members countries. and with the
members themselves.
With core expertise in technology. the educational dividend is perhaps most appropriately
and best delivered through technology support for classroom activities; broadband
connectivity to schools. "smart boards" and computer suites. For older children. this might
also extend to sponsoring course places on certification programmes such as Cisco's CCE.
C8N 9 8eyond FairTrade
Education for AII - Chana
A Plan of Action
his document outlines the challenges facing African organisations attempting the
leverage technology in an attempt to compete in global marketplaces. together with a
description of what a solution might look like - A FairTrade internet provider. able to
balance European negotiation with local delivery and a model to capture and transfer
expertise.
T
Setting up a virtual network operator as described in the previous section. while considerably
less expensive than owning a physical satellite network. still requires significant startup
funding.
n order to make this a viable and sustainable project. two things are required:
Seed funding to create the virtual operator
nitial commitment from FairTrade organisations and NC0's that they intend to use
such a service
The initial funding level and commitment for a virtual operator agreement will determine
how quickly and flexibly the service can reach organisations. The following list may be used
to give an order of magnitude indication of the costs for a full virtual operator service:
f250.000 will create the virtual network immediately for the first 50 members
f500.000 will allow a number of local support teams to be trained and for provide a
number of "flyaway" solutions to be provided into a number of member nations to act
both as services to founding members and as examples to other local organisations
who may never have seen this kind of connectivity before. These "flyaway" solutions
would also be available to NC0's for emergency intervention.
The funding being sought is specifically for capital and startup elements. 0ngoing revenue
costs will be covered by subscriptions from FairTrade organisations and NC0's. The
investment used to secure the startup hardware will be recouped and reinvested by renting
the equipment to founder members.
C8N 10 A Plan of Action
FairTrade roadband
C8N 11 A Plan of Action
Education for AII - Chana
About C8N
he Community 8roadband Network was launched in the
UK during January 2004 by the then Pural Affairs
Vinister Alun Vichael and 8roadband Vinister Stephen
Timms. The C8N is a cooperative of communityrun
independent broadband operators. and it aims to encourage
and support the provision of local broadband services as an
alternative to the large national service providers.
T
At the time of the C8N's 2004 conception. most of the UK's
community broadband projects were being established to
provide broadband services to homes and businesses that were not being served by any other
operator.
C8N member projects typically cover rural countryside. where other forms of broadband can
be scarce. or urban areas identified for regeneration where a traditional broadband
infrastructure may not fulfil the needs of local people.
0ver the past two years. as 8T has accelerated its exchange upgrade programme. the focus of
the C8N members has begun to shift towards the provision of higherspeed nextgeneration
broadband services. including highercapacity wireless and fibreoptic networks. and to
sharing our experiences internationally.
There is an increasingly important role for community broadband projects even after
traditional operators have provided vanilla services into an area. Vany member projects give
something back to their local community. and are constantly innovating and evolving their
service to the needs of their community.
C8N 12 About C8N
FairTrade roadband
About the Author
Adrian Wooster is a 0irector of C8N and the founder of CTC.
where he specialises in next generation broadband strategy and
architecture.
He has worked for almost 20 years in the international
telecommunications industry. and been actively involved in the
community broadband movement for the past few years. having
been a cofounder of 0P8. a communityowned broadband
network in rural 0xfordshire.
Previously. he has been the Clobal Communications Architect
for a Silicon 7alley corporation. and product strategist for a
major competitive telecommunications operator. n 2004 he
formed CTC; an organisation which focuses on developing
innovative communityled technology projects from concept to
delivery.
0o you know C8N:
C8N supports. promotes and develops communityowned broadband schemes.
We have directly helped around 100 projects throughout Creat 8ritain
We have over 200 members regularly contributing
We develop strategic thinking in Next Ceneration services and architectures
We work with partners to deliver advanced and exciting community services
Consltn Servces
C8N blends social and technical consulting to maximise the impact on community initiatives
and projects.
Events
C8N's network of visionary thinkers and inhouse expertise ensures C8N organised events are
always stimulating and exciting.
C8N 1J About C8N
Education for AII - Chana
Contact
To enquire further about how C8N's expertise may help your project. contact Valcolm
Corbett:
0845 456 2466
m.corbett@broadbanduk.coop
Unit 12. Enterprise House
Vanchester Science Park
Lloyd Street North
Vanchester. V15 4EN
UK
C8N 14 About C8N
FairTrade roadband
Appendices
A Chana and Telecommunications
ssentially there are three core choices when selecting a broadband provider in Chana -
the state incumbent. Chana Telecom; a socalled competitive alternative provider; or a
satellite provider. E
Chana Telecom are an incumbent operator in the traditional mould with additional
challenges; they have been badly advised and managed by two foreign operators in recent
times in attempts to prepare them for full privatisation. most recently by Telenor of Norway.
They have invested little in their network and analogue services are patchy and expensive;
digital services such as A0SL broadband are not commonly available. Further. the price of
copper on the commodity market has risen to a point where telecommunications cabling has
become a target for thieves. adding further to reliability issues.
lnternctoncl Ccpccty
While Chana Telecom (CT) have access to what
ought to be competitively priced and highcapacity
international bandwidth. they have failed to pass
on in any meaningful way either the cost savings or
the performance improvements.
CT is a founding partner in the SATJ fibre project.
linking a number of West and South African coastal
nations with the main European backbone network
in Portugal. delivering up to 120 Cigabits per
second.
The inset is a map of fibre routes around Africa.
together with what the eAfrica
2
commission of
NEPA0 felt was necessary but currently unplanned.
The agreement granted monopoly access to the
fibre landing points to the founding partners. who have universally failed to pass on
proportionate performance or financial benefits to either their respective wholesale or retail
markets. Some cost savings were eventually offered to Chanaian wholesale operators but this
is far from proportionate.
2
See http://rights.apc.org/documents/open_access_EN.pdf for the full report
C8N 15 Appendices
lnternctoncl fbre rotes n Afrcc
Sorce: APC/Nepcd
Education for AII - Chana
There is growing pressure on the South African government. where the partnership is
incorporated. to wrest control of the network from the partners as a "strctecclly mportcnt
csset". There are also other plans. notably in Nigeria. to lay additional independent fibre
capacity to Europe but these are some way off and appear not to include Chana.
The Competton
n Chana. this has resulted in a number of alternative. often wireless. providers forming to fill
the void. From research done so far. these are typically offering very low bandwidth options
at high prices. For example. Kuapa Kokoo's
J
connection is with such an alternative provider;
the contract provides for an asymmetrical service with just 10 kbps download capacity and a
useless 4 kbps upload speed for an eyewatering subscription of f2.000 per year; a similar
budget in the UK would secure three businessclass 8 Vbps services.
Satellite services
The alternative is to avoid the vagaries of the domestic telecommunications market by using
a satellite operator. While this has proved to be a useful solution in remote areas of the
Europe and the US. initial research shows that this is also an expensive option in Africa.
Vany of the satellite groundstations where the service reaches the nternet are based in
Europe; the terminal equipment on the ground will be the same as ones used in Europe; and
all geostationary satellites are orbiting the equator. So while there appears to be no reason
for a cost differential between Europe and Africa. there is a substantial price difference.
Essentially there is no technical reason why satellite services in Africa cost any more than
ones in Europe. Varket forces will have some impact on this - the market for satellite
broadband in Europe is depressed after the widespread deployment of A0SL. This has led to
increased competition for relatively scarce satellite resources beaming over Africa where
customers have very few options. Traditionally the only customers of this kind of service have
been large western corporations and NC0's who need connectivity in order to function.
The cost is further exacerbated by license fees levied on all twoway satellite connections.
The Chanaian National Communications Authority currently charges S4000 per year per
terminal. with few exceptions. For an organisation like Kuapa Kokoo. this could form over 90
of the running costs of the service! So while a centrally negotiated satellite contract will
reduce the running costs. local negotiation will still be required to reduce the permit costs to
a reasonable level.
A more general market for broadband does not exist at the moment. so demand for SVE and
consumer services is limited. 0f course it may also be argued that at such inflated prices. no
market could develop.
Community 8roadband
Finally. there is some evidence of communitybased broadband services beginning to emerge
in Chana. Wireless Chana
4
. for example. are starting to develop coverage in the East of
Chana. All things being equal. such organisations could provide valuable assistance both in
building a solution and in supporting it into the future. However. one problem with Wireless
Chana's approach is that they developed their own technology platform which is incompatible
with any open or de facto standards; should the community project fail then support for the
technology will also disappear. requiring a total rebuild of the technology.
J
Kuapa Kokoo are a major farmers' cooperative in Chana producing cocoa beans. and a significant member of the
FairTrade movement
4
See www.wirelessghana.com
C8N 16 Appendices