Note to most African governments: "You're going the wrong way."

Everyone's excited about the imminent glut of bandwidth headed Africa's way from the construction of multiple submarine cables.  SEACOM went live last July, to the thrill of anyone excited about ICT4D.  Increased competition for international backhaul connections has the potential to drop the Mbps cost for Africa to connect to the outside world by a full order of magnitude, from the thousands to hundreds of dollars per month.  Such massive drops in costs to serve will spawn a new wave of investments in domestic infrastructure, since it will suddenly be possible to profitably reach a vastly wider market. Prices will drop precipitously, quality will skyrocket, adoption will soar.

Right?  I certainly thought so.  It's what got me excited in Liberia this summer.  I realized that in addition to the drops in international connectivity rates, the Liberian government had an opportunity to shape imminent investments in the country's domestic infrastructure, fostering an ownership and management structure that would minimize costs, leading to further declines in costs to serve, enabling even broader adoption (see my last post on Africa's golden opportunity). The near total lack of infrastructure makes Liberia's case particularly golden, but it's an opportunity sitting in front of almost every African country right now.  
 
Yet instead of promoting low cost infrastructure models, most African countries are going in the exact opposite direction. Instead of using incentives and regulation to shift imminent domestic investments towards lower cost structures, furthering the gains coming from the competition from submarine cables, countries have been caught with their pants down.  Faster than anyone thought it would happen, the connectivity is here and countries are finding themselves without a domestic broadband policy (this by the way is the idea for my thesis).  But that's not the worst of it.  Many governments have a huge incentive to maintain the status quo and even resist passing along the gains from submarine cable connections to the end users: they own the market.  If the state owns the provider of telecommunications services, why would it want to foster competition and pass on cost savings to the end user?  Ah, we're back to that pesky technically correct but politically infeasible thing (see my blog post on what I got wrong in Liberia).

Therein lies the rub.  The current incentive structure within the telecommunications space in Africa doesn't allow for the potential gains to be realized.  It would be a huge lost development opportunity if this status quo can't be broken.

Much much more on this to come.