July 22, 2007

Africa, Offline: Waiting for the Web

ON a muggy day in Kigali in 2003, some of the highest-ranking  
officials in the Rwandan government, including President Paul Kagame,  
flanked an American businessman, Greg Wyler, as he boldly described  
how he could help turn their small country into a hub of Internet  

Mr. Wyler, an executive based in Boston who made his fortune during  
the tech boom, said he would lace Rwanda with fiber optic cables,  
connecting schools, government institutions and homes with low-cost,  
high-speed Internet service. Until that point, Mr. Wyler, 37, had  
never set foot in Africa — he was invited by a Rwandan government  
official he had met at a wedding. Mr. Wyler never expected to start a  
business there; he simply wanted to try to help the war-torn country.

Even so, Mr. Wyler’s company, Terracom, was granted a contract to  
connect 300 schools to the Internet. Later, the company would buy 99  
percent of the shares in Rwandatel, the country’s national  
telecommunications company, for $20 million.

But after nearly four years, most of the benefits hailed by him and  
his company have failed to materialize, Rwandan officials say. “The  
bottom line is that he promised many things and didn’t deliver,” said  
Albert Butare, the country’s telecommunications minister.

Mr. Wyler says he sees things quite differently, and he and Rwandan  
officials will probably never agree on why their joint venture has  
been so slow to get off the ground. But Terracom’s tale is more than  
a story about a business dispute in Rwanda. It is also emblematic of  
what can happen when good intentions run into the technical,  
political and business realities of Africa.

Attempts to bring affordable high-speed Internet service to the  
masses have made little headway on the continent. Less than 4 percent  
of Africa’s population is connected to the Web; most subscribers are  
in North African countries and the republic of South Africa.

A lack of infrastructure is the biggest problem. In many countries,  
communications networks were destroyed during years of civil  
conflict, and continuing political instability deters governments or  
companies from investing in new systems. E-mail messages and phone  
calls sent from some African countries have to be routed through  
Britain, or even the United States, increasing expenses and delivery  
times. About 75 percent of African Internet traffic is routed this  
way and costs African countries billions of extra dollars each year  
that they would not incur if their infrastructure was up to speed.

“Most African governments haven’t paid much attention to their  
infrastructure,” said Vincent Oria, an associate professor of  
computer science at the New Jersey Institute of Technology and a  
native of the Ivory Coast. “In places where hunger, AIDS and poverty  
are rampant, they didn’t see it as critical until now.”

Africa’s only connection to the network of computers and fiber optic  
cables that are the Internet’s backbone is a $600 million undersea  
cable running from Portugal down the west coast of Africa. Built in  
2002, the cable was supposed to provide cheaper and faster Web  
access, but so far that has not happened.

Prices remain high because the national telecommunications linked to  
the cable maintain a monopoly over access, squeezing out potential  
competitors. And plans for a fiber optic cable along the East African  
coast have stalled over similar access issues. Most countries in  
Eastern Africa, like Rwanda, depend on slower satellite technology  
for Internet service.

The result is that Africa remains the least connected region in the  
world, and the digital gap between it and the developed world is  
widening rapidly. “Unless you can offer Internet access that is the  
same as the rest of the world, Africa can’t be part of the global  
economy or academic environment,” said Lawrence H. Landweber,  
professor emeritus of computer science at the University of Wisconsin  
in Madison, who was also part of an early effort to bring the Web to  
Africa in the mid-1990s. “The benefits of the Internet age will  
bypass the continent.”

RWANDAN officials were especially interested in wiring primary and  
secondary schools, seeing information technology as crucial to  
modernizing the country’s rural economy. Some 90 percent of the  
country’s eight million people work in agriculture.

But as of mid-July, only one-third of the 300 schools covered in  
Terracom’s contract had high-speed Internet service. All 300 were  
supposed to have been connected by 2006.

Over all, less than 1 percent of the population is connected to the  
Internet. Rwandan officials say the company seems more interested in  
tapping the more lucrative cellphone market than in being an Internet  
service provider. (In November, Mr. Wyler stepped down as chief  
executive of Terracom, saying he wanted to spend more time with his  
family; he still serves on the board.)

In a telephone interview from his home in Boston, Mr. Wyler said he  
would not address the government’s criticism, saying he did not want  
to be quoted as saying anything negative. But he said there were some  
things he had not anticipated, particularly the technical challenges  
of linking Rwanda’s Internet network to the rest of the world. The  
only way to do it is to buy bandwidth capacity on satellites, but  
there are not enough satellites to meet demand.

Mr. Wyler also says he believes that Terracom suffers from  
unrealistic expectations. “Terracom has done everything it can, “ he  
said. “Because of the technical challenges, the Internet service is  
as good as it’s going to get. But given what we started from, I still  
think we have accomplished a lot. In the beginning there were a few  
people with Internet service; now there are thousands.”

The Rwandan government had hoped that the number of Web surfers would  
be much higher by now. Rwanda, which is about the size of Maryland,  
has little industry, and its infrastructure is still being rebuilt  
after being left in shambles by a 1994 genocide in which 800,000 to a  
million people were killed.

“We have almost no natural resources and no seaports in Rwanda, which  
leaves us only with trying to become a knowledge-based society,” said  
Romain Murenzi, the minister of science, technology and scientific  

Officials saw Terracom’s investment as crucial to its transformation.  
Unlike many African governments, Rwanda’s was eager to privatize the  
national telecommunications company, which had outdated equipment,  
high prices and few subscribers.

But from the start, government officials say, there were problems  
with Terracom. Mr. Butare, the telecommunications minister, said the  
government had trouble getting basic information from the company.

Complicating the situation, Mr. Butare said, was that Mr. Wyler tried  
to run Terracom from the United States, visiting Rwanda just a few  
weeks at a time. He left day-to-day management to a poorly trained  
staff, Mr. Butare said.

“There were spots where they did some things here and there,” Mr.  
Butare said. “But over all they have failed to do what they promised.”

Internet rates have been lowered, from about $1,000 a month when  
Terracom arrived in 2003, but most people still can’t afford it. The  
average Rwandan makes about $220 a year, and a fixed-line Internet  
hookup costs about $90 a month. Basic wireless Internet is about $63  
a month. Those rich enough to pay the fees complain about poor service.

Government officials say the company has spent more time marketing  
and signing up cellphone customers than on expanding Internet  
service. According to government figures, Terracom has 30,000 to  
40,000 mobile phone subscribers and about 20,000 Internet customers.

The situation came to a head late last year, when government  
officials contended that Terracom secretly tried to trade its shares  
in the Rwandan telecom to GV Telecom, a regional African  
telecommunications company incorporated in the British Virgin  
Islands. Rwandan officials were furious, saying this was a violation  
of the contract signed by the two parties.

The plan was scrapped and Mr. Wyler was widely criticized. In June,  
the government fined Terracom nearly $400,000 for failing to comply  
with its licensing obligations, failing to provide information about  
its operations and failing to pay several fees.

“We decided to penalize Terracom after they failed to fulfill their  
obligations for a long time,” said Beatha Mukangabo, legal officer  
for the Rwanda Utilities Regulatory Agency. Terracom said it has paid  
the fines and is working with the government to meet all of its  

Mr. Wyler said he has not been involved in Terracom for nearly 10  
months and could not comment on its current operations.

Christopher Lundh, Terracom’s new chief executive and a former  
executive of Gateway Communications in London, has worked in several  
African countries. He now lives and works full time in Rwanda, and  
many government officials say Terracom’s performance has improved  
under his leadership.

Mr. Lundh acknowledged that there were problems with the company’s  
operations in the past. “The former management did make some promises  
that they were not able to keep,” he said. “That’s why I was brought  
in to professionalize things.” He also said that the company could  
have better handled the matter with GV Telecom but that he thinks the  
government overreacted.

He said the Rwandan government is to blame for some of the delays.  
“We would get to schools that don’t even have electricity or  
computers,” he said. “That is not our fault.” In addition, he said  
that many of the complaints about the company concerned things beyond  
its ability to control. Getting adequate bandwidth remains a constant  

Like most telecommunications companies in eastern Africa, Terracom  
depends on satellites for Internet service. Satellite service is much  
slower than cable because of delays in the signals. Satellites also  
provide less bandwidth than cable.

Adding to the problem is that most of the satellites serving Africa  
were launched nearly 20 years ago and are aging or going out of  
commission. A satellite set to go into service last year blew up on  
the launching pad. Power is also an issue, as intermittent power  
failures in Rwanda hamper efforts to provide a steady electricity  

DESPITE these limitations and earlier setbacks, Mr. Lundh says  
Terracom is moving ahead with plans to give Rwanda the most advanced  
Internet infrastructure in Africa. A nationwide wireless connection  
should begin operating near year-end, he said, about the time a  
nonprofit group, One Laptop Per Child, based in Boston, is to  
introduce a $100 laptop in the country.

And Terracom is continuing to lay fiber optic cables to connect  
Rwanda to several other African countries, eliminating a need for  
phone calls and Internet traffic to be routed via European or  
American networks.

The government, meanwhile, is moving forward with its own plans to  
build a fiber optic network. It also has granted Internet service  
licenses to South African companies and plans to issue several more.  
“We think we are going to have a healthier market pretty soon,” said  
Nkubito Bakuramutsa, director general of the Rwanda Information  
Technology Authority. “We have learned from past experience.”

Mr. Bakuramutsa said he hopes to bring the price of Internet service  
down to about $10 a month.

Mr. Lundh said his company welcomes the competition. But, he added,  
getting necessary bandwidth remains an issue and no matter what  
company supplies Internet service, speed will be a problem.  
“Eventually you reach a point of diminishing returns,” he said.  
“Unless there is a new undersea fiber optic cable built or a new  
satellite launched, it’s going to be difficult.”

Magnus K. Mazimpaka contributed reporting from Rwanda.


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s. e. anderson (author of "The Black Holocaust for Beginners" -  
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