Doing E-business with Africa

The opening up of Africa to the Internet via submarine cables and terrestrial communications networks will provide South African logistics companies and cross-border fleet operators with new business opportunities, writes UDO RYPSTRA.

New developments in tele-communications continue to lead to new innovations in doing business. This applies to Africa too, where two developments are opening up new business opportunities for commerce and industry in general, but the freight logistics and tourism travel industries in particular.

The first development is the arrival of several operational submarine cables and new cables being planned to link West, East and Southern African with Europe, Asia and the rest of the world. No less than five undersea cables are under construction, entering service or became operational this year. Costing more than US$2,5 billion, they could boost data capacity to more than 16 terabits a second in 2012 from almost none in 2000. Some experts believe this new bandwidth could slash broadband prices by as much as 90%.

The second development is a result of the first one: phone operators, rather than pure cable companies, are investing or planning to invest in terrestrial networks to link the hinterland, including land-locked countries like the DRC, Rwanda, Zambia, Zimbabwe and Botswana, with the submarine cable networks. The operators are banking on growth in Africa, where broadband penetration is currently just 3,2%, according to Pyramid, a US research company: This could bring thousands of companies throughout Africa on-line.

The networks are (see map on page 78):
• The East African Submarine Cable system, or EASSy , which went live on 16 July; it is owned by 16 investors, all comprising phone operators, including Bharti Airtel of India and MTN of South Africa.
• Glo-1, a US$800 million link from the UK to Lagos, is going into service this year and is financed by Nigerian phone company Globacom Ltd.
• Cable & Wireless is investing in the US$600 million West Africa Cable System, or WACS, with MTN and Vodafone’s Vodacom Group Ltd, linking the UK to South Africa.
• France Telecom SA is leading a group building the 17 000 km, US$700 million Africa-Coast-to-Europe, or ACE, cable.
• The first 7 000 km Portugal-Lagos-South Africa phase of Main One, backed by the Africa Finance Corporation, African Development Bank and some Nigerian banks – the only one of the five not affiliated with a phone operator – will also go into service this year.
• Vodacom, MTN, Cell-C and now also Telkom are deploying thousands of kilometres of fibre, with plans to eventually hook up a big percentage of their base stations to their high-capacity backhaul network. Cell-C has already started while Vodacom has said it will hook up about 1 000 of its towers to its own fibre backhaul network during the current financial year. MTN has similar plans.

These developments in Africa caused quite a bit of excitement and debate at the recent Mobile Web Africa conference in Johannesburg where phone operators, software application developers, web designers, advertising companies and others discussed the multitude of new opportunities that were presenting themselves, to do business with the continent’s one billion inhabitants.

They were also discussed a week later at the Nepad Conference at Gallagher Estate, where delegates talked about the “exorbitant” cost of doing business with Africa via satellite and the much cheaper alternative the new networks could offer.

Smart phones
It is obvious what these developments mean in terms of South African companies doing business with other African companies, which can now also access the Internet more cheaply via office computers and smart phones. For starters, it will be a boost for E-freight, or electronic logistics management solutions to enhance the way shippers and land carriers move information, freight and money to manage and grow their businesses. Where logistics companies and transport operators have previously been able to use E-freight technology for a few African cities only, the whole African continent is opening up.

E-freight offers electronic means of tendering shipments, bidding, negotiation, scheduling, delivery notification, and financial settlement. It also provides various enhancement services, such as online document imaging for each load, integration facilities with enterprise resource planning, land transportation management systems, and integrated wireless track and trace offerings such as those offered by UPS and DHL.

But also think in terms of what it can do in terms of vehicle tracking and vehicle telematics. “There will be many opportunities for the freight and tourism industry and not just in terms of vehicle tracking. It will be in terms of fleet management as well,” said Antonie Roux, head of the telecommunications division of Naspers, who spoke to FOCUS at the Mobile Web Africa conference. And here he was referring to new opportunities for DigiCore and MiX Telematics.

Fleet management
As many fleet operators know, GPS is widely used as a fleet management solution to pinpoint the location of the drivers. Since updates can be transmitted at a regular timed interval, the location of the drivers can be tracked easily at any given time. The transmission of the location can also be triggered by events like ignition on or off. Until now, the data has been made available by a service provider on a website. Users with proper security credentials can track fleet activity live or historically by logging on to the website – and they can make use of features like digital mapping and various reporting tools.

Vehicle telematics is more than that: it is the use of computers and telecommunications to improve and enhance the functionality, security and productivity of vehicles and the drivers. Basically, it is the convergence of personal computers, mobile phones, GPS and the Internet. Fleet managers can use the technology to not only locate a group of vehicles, but also to locate them in relation to customer sites. Fleet managers and job dispatchers can make use of the technology to transmit and receive job messages to and from the drivers. The onboard device will then create the most effective journey route and send back the estimated arrival time to the job dispatch office.

Effective and efficient – this technology helps reduce journey times, save fuel and ultimately improve the satisfaction of the customers. A leading American vehicle telematics company says on its website: “Vehicle telematics is a great tool to make an organisation run more effectively. The activity of the fleet can be analysed, where the result can be used to make decisions, based on actual information – not just assumptions. Better tracking and planning can lead to an improvement in the journey times, fuel economy and drivers’ hours.”

Brett Faure, manager for all business development in Africa for DigiCore, agrees that Africa is showing a “huge potential” and that it is more focused on the fleet management side rather than stolen vehicle recovery. “C-track is operational in 17 African countries already and we are looking at expanding even more. With so much focus on minerals and resources on the continent, large organisations are investing into Africa.

“With the increase in development and mining it is of the essence to minimise risks of injuries and vehicle abuse in these corporations,” Faure said that through the
C-track system, DigiCore could help customers, like BHP Billiton, to monitor speed violations, driver seat belts, impact and roll over of vehicles and many more.

“With mobile networks increasing their footprint in Africa more and more users will have access to the Internet. Our product uses the GSM networks as well as satellite networks to deliver the information via the internet to the customers’ doorstep,” Faure explains.

Finally, it is obvious that better, shared telecoms infrastructure throughout Africa will facilitate the harmonising of customs and immigration procedures, the creation of more one-stop border posts, access to tourism information by people just having to click on a few smart phone buttons to submit documents, place an order or make a booking, paying for it via Paypal, or just accessing the information they need for rapid decision-making.

C-track’s African footprint now includes South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Tanzania, Zambia, DRC, Uganda, Kenya, Nigeria, Tunisia, Liberia, Guinea, Senegal, Mauritania and Morocco.