GUINEA'S BANDWIDTH WOES

UNCLAS CONAKRY 000388

SIPDIS

E.O. 12958: N/A
TAGS: ETTC PGOV ECON PREL EINT ECPS GV
SUBJECT: GUINEA'S BANDWIDTH WOES


1. (U) Summary. Guinea,s telecom infrastructure is one of
the least developed in the world. With no fiber optic
bandwidth capabilities, there are only two satellites that
provide bandwidth capabilities for the country. A symbol of
the GOG,s highly centralized nature, bandwidth is only
broadcast into Conakry and then re-broadcast into the
country,s interior which causes service interruption,
overall service slow-down, and system failure. The GOG
exacerbates the situation through attempts to extort extra
tariffs, solicit monetary "donations," and prohibit sector
expansion projects. End Summary

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Brief Overview of Telecom Sector
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2. (U) The telecommunication sector is one of Guinea's
fastest growing and most lucrative sectors. Five large
international telecommunication firms operate in Guinea:
Israeli-American owned Cellcom S.A.; French-owned Areeba
Guinee; French Telecom subsidiary Orange Guinee; French-owned
Intercel; and the Guinean owned Societe de Telecommunication
de Guinee (Sotelgui).


3. (U) Guinea began broad efforts in telecommunications for
the first time in the early 1990,s with government-owned
cellular phone company Sotelgui. As part of a wave of
government privatization efforts in the late 1990,s, the GOG
privatized the telecom sector in 1997. Subsequently, larger
firms moved in to take advantage of a market where few people
had access to landlines or cellular telephones. Cellular
networks are easier to install than landlines as they do not
require extensive infrastructure. Today, the telecom sector
has millions of customers across Guinea, and is currently the
fastest growing consumer base in Guinea.

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An expensive business
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4. (U) Due to poor infrastructural development in Guinea,
companies pay much more for bandwidth than most telecom
companies outside of Guinea. Intelsat, one of only two
satellites broadcasting into Guinea, charges telecom
companies $40,000 USD per year for every four megabytes of
bandwidth. These costs are paid directly to the satellite
companies, not to the GOG, and are well above the world
industry norm due to a lack of satellite market competition
and poor infrastructure. These high costs are ultimately
passed on to Guinean customers.

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Double payments for bandwidth broadcasting?
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5. (SBU) Hanuk Dombek, Directeur General of Cellcom Guinea
S.A., told POL intern that in the months since the Demcember
coup d,etat, the GOG increased tax payment queries, and
subjected the company to extensive and extra-legal contract
auditing. These policies left Cellcom paying at least a
$300,000 USD tariff on satellite bandwidth broadcast into the
country. The GOG does not own the satellites over the
country and satellite bandwidth broadcast into Guinea is
normally paid by the satellite companies to the GOG. Costs
are then passed on to telecom companies, and the fees account
for a large amount of double charging.


6. (SBU) Dombek said that while Cellcom never paid this
tariff before, the contract structure did leave a "gray" area
that obliges Cellcom to pay. When asked, Areeba and Orange
said that the GOG demanded extraneous payments, but seemed
hesitant to verify if payments were packaged with contractual
pretenses. They also avoided responding to questions about
the status of these requests and if they had paid extraneous
demands to the GOG.

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GOG against submarine fiber optic cable?
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7. (SBU) West Africa is the only region in the world outside
of Antarctica that does not have access to bandwidth provided
by submarine fiber-optic cables. France Telecom plans to
change this by providing submarine cables to over 17
countries along Africa's western seaboard including Guinea.
Although the service will eventually be offered to all
telecommunication companies in Guinea, Orange,s connection
with France Telecom will make it cheaper for Orange Guinea to
operate. Embassy sources in the telecom sector informed POL
intern that the GOG is against providing access to fiber
optic cables because the practice of providing cheaper access
to a subsidiary is "unfair." In essence, the GOG is
preventing access to this new technology. (Comment: Embassy
believes that blockage of this cable is meant to solicit
monetary concessions from Orange. End Comment)

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Bandwidth only broadcast into Conakry
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8. (U) One of the main technical problems with the telecom
sector is that bandwidth is only broadcast into Conakry, then
re-broadcast to the interior. This causes a number of
problems: service interruption in Conakry and in the
interior, and slow connection speeds. In addition, each of
Guinea's service providers regularly experience communication
shut-downs due to system "saturation." Without constant
electricity, telecommunication companies find it difficult to
maintain consistent operations and uninterrupted service.


9. (SBU) Comment: While the consumer base continues to grow
in Guinea, the telecom sector remains underdeveloped.
Customers are so accustomed to system failure in Guinea, that
it is not unusual for people to have three cell phones with
different company subscriptions as a way to hedge their bets
when systems are interrupted. GOG involvement in double
taxing and general company harassment may stifle plans to
expand network operations or improve service capabilities.
In a country where communication efficiency is declining, the
GOG may worsen existing telecommunication problems. End
Comment.
BROKENSHIRE