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ICT-Enabled Development Case Studies Series: Busy Internet (Accra) Submitted by Editor on 31 January, 2003 - 23:05.
An initiative of IICD and bridges.org
I. Overview Initiative: BusyInternet (BI) Accra is the largest technology incubator in Africa. It provides businesses and the public with affordable, state-of-the-art information and communication technology (ICT) services, customer service, and a social environment that promotes technology use. Implemented by: BusyInternet International
Funding or financial model: BI Accra is run on a for-profit business model. BusyInternet International, Databank Ghana, and Fidelity Partners Ghana, provided capital layout of US$1.7 million. Timeframe: BI Accra was launched on 23 November 2001. Local context: Ghana has a population of 19.9 million (2001). More than 60% of its population live in rural areas, the general life expectancy is 56.9 years. The literacy rate for people aged 15 years and over is 72.6% and 44.8% earns less than US$1 a day (2001)[1]. The GDP per capita is US$372. (2000)[2] Electricity production is below local demand. Ghana has an advanced financial system comprised of a central bank (Bank of Ghana), eleven commercial banks, five merchant banks, and a series of rural unit banks. Ghana is politically and economically stable with little corruption and danger, and is therefore a good place to conduct business. Liberalisation and privatisation of the ICT and telecommunications sectors is underway. Ghana has a liberal free trade macro economic policy[3]. Foreign direct investments are aggressively promoted, including incentives for foreign investors. The development problem/obstacle addressed: Limited availability of, and costly ICT infrastructure is a problem for the majority of the poor people in Ghana. There are 1.82 telephones per 100 people in (2001)[4], with teledensity skewed in favour of large cities. There is a long waiting list for new telephone service and a waiting time of up to one year. "Telephone bills are inaccurate, overcharges common, and the installation of a new line can cost a business more than US$1,000 -- the rough equivalent of the annual office rent. Phones go dead and remain unrepaired, for months," writes G. Pascal Zachary of Technology Review. Mobile phones are gaining in popularity, with 102,000 mobile phone subscribers by 2000[5]. The cost of a cell phone call was US$0.90 per minute (peak hours) and US$0.72 per minute (off peak) in 2001. According to Eric Osiakwan, secretary of the Ghana Internet Service Providers Association, there are approximately 20,000 Internet subscribers and about 1 million users in over 2000 cyber cafés throughout Ghana. In 2001[6] there were 235 Internet hosts, and a computer density of 0.33[7]. Internet access is expensive overall - between US$6.00 and US$50.00 per month depending on the ISP and the type of service provided. Power shortages are also a major problem and force many organisations to buy back-up generators. How ICT is used to overcome the problem: BI Accra is an incubator for ICT companies that gives local businesses and the general public affordable and reliable access to ICT. BusyInternet revamped an old two-storey building and created Internet access halls that house 100 flat screen personal computers and 15 wired offices. The building has a VSAT Internet connection[8] and 1 megabyte of bandwidth -- which costs US$8,000 a month, plus a yearly license fee to the government of US$2,000 -- a back-up power system, and an internal network. The centre is open 24 hours a day, 7 days a week and gets about 1,800 visitors per day. Access to the Internet is charged per minute. ICT start-ups can hire offices from BI Accra at a monthly rate of US$400 for 18 square meters and an additional US$250 monthly for other services such as reception facilities, telephones, electricity, broadband Internet and security. BI Accra has successfully incubated ten ICT companies since its inception. It actively markets the services of its resident ICT companies. In return, these ICT companies are obliged to run community programmes that will have a broader impact on socio-economic development. BI Accra also offers low or no-cost Internet access to structured groups, such as those visiting the centre for HIV/AIDS and "Internet-for-Beginners" workshops. Next steps: BI Accra intends to franchise the business in other African cities within the next three years. If or when the Ghanaian Government legalises Voice over Internet Protocol (VOIP) -- which will dramatically reduce the price of phone calls by routing them via the Internet -- BI Accra plans to deliver that service from its centre. BI Accra also plans to extend service offerings to their tenant companies in terms of capacity building, financial advice, marketing and fundraising. They are also negotiating to host the Ghana Internet Exchange.
Geographical area targeted: Accra, Ghana.
Contact Information: II. Gauging Real Impact This section considers whether and how BusyInternet Accra has made a Real Impact at the ground level by looking through the lens of basic best practice guidelines for successful initiatives. The bridges.org's 7 Habits of Highly Effective ICT-for-Development Initiatives are used here as a framework to highlight what BusyInternet Accra has done well. The 7 Habits of Highly Effective ICT-for-Development Initiatives 1. Implement and disseminate best practice. The founders had relevant experience in starting up ICT businesses and studied various telecentre models before they established BI Accra. BI International works with international agencies, foundations and companies to facilitate knowledge sharing within Africa, and between Africa and the United States. 2. Ensure ownership, get local buy-in, find a champion. The founders consulted people from the ICT industry in Ghana, but the planning and implementation of BI Accra was private. However nearly 50% of BI Accra is now owned by local Ghanaian investors. 3. Do a needs assessment. The founders spent a year researching in Ghana which included conducting a needs analysis and market survey. 4. Set concrete goals and take small achievable steps. The business has concrete financial goals for each of its services. BI International has not been hasty to open centres in other cities and focused on making the first centre in Ghana a success. 5. Critically evaluate efforts, report back to clients and supporters, and adapt as needed. As a business, BI Accra conducts regular financial analysis. They also run customer surveys to gauge satisfaction and make suggested improvements. 6. Address key external challenges. The project anticipated the poor infrastructure of the region and chose alternative Internet connectivity, and provided sufficient backup power resources. The business model recognises poverty levels and prices are set in line with local income and ability to pay, introducing half-price browsing at 50 cents per hour during the night. Ghana's ICT policies need further work, but BI Accra is doing its part to engage stakeholders by hosting policy workshops and debates where government officials are invited to participate. 7. Make it sustainable. The majority of telecentres in Africa -- many of which depend on donor funding -- fail to become sustainable. But the for-profit model of BI Accra forced the founders to focus on economic sustainability. BI Accra was operational within ten months, and became cash flow positive within the first four months of business. The over 60% occupancy rate of its cyber café indicates that BI Accra is on the right track. III. Lessons Learned We invited Mark Davies, the founder and CEO of BusyInternet International, to share his views on BusyInternet Accra's greatest success, the challenges he has faced, key constraints and dependencies that affect BusyInternet Accra, opportunities for future improvement of its ICT business and services, and other lessons he has learned. Here is what he had to say: "It has been an amazing vantage point to sit in a place where technology, Internet, development and democracy intersect. We have learned so many lessons about who uses technology here, what the skill sets are, what the potential is. Clearly the application of technology to these environments has massive potential -- assisting development's move from awkward and time-consuming bureaucratic precedents to fast and efficient customer-focused solutions. The potential to accelerate information distribution, e-governance, and take advantage of an educated labour pool to serve as digital workers for overseas markets (and, over time, local markets too) is exciting. Not only do we have smart software programmers building "tropicalised" versions of accounting packages, cyber café billing packages, Point of Sale modules, configuring Linux, exploring VOIP technologies, but we also have people digitising hand-written New York City parking tickets, answering calls for New York offices, and potentially much more. Clearly, partnerships between Ghanaian companies and overseas counterparts that can connect workers to markets and products are crucial. It is just as important that local entrepreneurs develop management capacity, get access to managers who have worked in mature corporate environments, and promote best practices with regard to customer service. We were lucky to choose Ghana as it has a growing ICT cluster and a liberalised environment that allowed us to get started quickly and permitted us to serve an already educated community with a superior product."
IV. The Story This section presents a narrative description of BusyInternet Accra that highlights why this use of ICT for development is particularly interesting. In Ghana, picking up the telephone to call your auntie can require a lot of patience and some gritting of teeth. When making a call from mobile to fixed lines, almost half of telephones calls do not go through because of system failures. Businesses often have receptionists who spend most of their time just dialing numbers until they get through. Davies (38), who sharpened his teeth as an ICT entrepreneur in the early days of the dotcom boom, was traveling in West-Africa and Brazil when he "considered how to best mingle the obvious entrepreneurial spirits that exists here (in Africa) with a fascination for new technology an the economic pressure to make cash". Said Mark: "I reflected on how I first came up with the idea of Metrobeat (his first successful IT company)…and really it's simply about putting enthusiastic people within reach of the tools. Their own imaginations and experiences will, and should, determine how they use and shape the tools for themselves." Davies and his business partners, Ellen McDermott and Alex Rousselet, first considered setting up a non-profit that would give students and the business people of Africa free or subsidised access to the Internet. However, following the advice of experts on development initiatives in Africa, they eventually chose the for-profit route. "It would make the project sustainable and thus live beyond the interest of its sponsors (a key issue many had warned us about in the first months). It would create a type of fiscal discipline that would inform our expenditures and focus us on being competitive," he said. The BusyInternet founders eventually chose an old bottling plant in Accra, Ghana, to set up shop. On 21 November 2001 BI Accra was launched, complete with Internet access halls that can accommodate up to 200 people, 100 flat screen PCs and 15 wired offices. The building has a VSAT Internet connection (which ensures Internet connectivity via satellite, instead of telephone lines), 1 megabyte of bandwidth, a backup power system, and an internal network. Although BusyInternet found it relatively easy to set up shop in Accra, it was not all plain sailing. It took a supplier days to find a truck to pick up a faulty printer for repairs. And due to the almost weekly power cuts that plague Accra, they had to install a backup generator and a huge battery to keep the computers going. They also installed a transformer to deal with the erratic power supply that can fluctuate between 240-290 Volts. In addition, the computers have to be cleaned frequently to protect them from the effects of dust. Investing in expensive infrastructure has eventually been worth it. Within four months of becoming operational, BI Accra was cash flow positive. An average of 1,800 people visit the centre daily to access computers, send e-mail, surf the Net or to make use of the conference, audiovisual facilities and copy centre. The cyber café boasts an occupancy rate of over 60%. ICT start-ups can hire serviced office space from BI Accra. Ten businesses have been successfully incubated in just over a year's time. Outstanding customer service is also key to BI Accra's success, so staff and management keep up-to-date with customer needs with regular surveys and participate in monthly training and team-building exercises focussing on putting the customer first. BusyInternet prides itself on its "unique business concept which places equal importance on both a social and financial return". To raise awareness about national ICT policy, BI Accra hosts free monthly debates on the issues and organises expert lectures on ICT subjects. Networking forums and lunch discussions are also organised, to give young entrepreneurs the chance to make contacts in the business community. Low or no-cost Internet access is offered to those attending HIV/AIDS workshops, Internet-for-beginner classes, the monthly "Internet for Schools" programme and the weekly "Internet for Kids" workshop. Those who cannot afford the normal price, to use the ICT services can pay half-price at night. To attract people to the centre who might not otherwise be interested in technology, movies are shown at the centre on weekends. Another magnet is Liquid, the BI Accra restaurant and bar with its cool-blue bubble design where the local cyber crowd hangs out to network and dream up ideas. BusyInternet believes that creating a social scene around technology will help spark an innovative technology culture. "Good ideas are mostly conceived on the backs of napkins over lunch or on envelopes," says Mark. "It's also a great place to sit on the main Accra ring road and watch the digerati and bustling life of Accra go by …" [1] Development Data Group, World Bank, http://www.worldbank.org/data/countrydata/ict/gha_ict.pdf About the IICD and bridges.org ICT-Enabled Development Case Study Series The ICT-Enabled Development Case Study Series aims to disseminate best practice examples of how information communication technology has been successfully used by ground-level initiatives to alleviate poverty. Case studies are an effective tool for examining what works best, what fails, and why. The intention of this series is to share knowledge and catalyse lessons learned about ICT by local organisations and the international community. The current focus is on efforts based in Africa. The case study series is a joint initiative of the International Institute for Communication and Development (IICD) and bridges.org, two organisations that share the goal of encouraging the effective use of ICT in developing countries. IICD is an independent non-profit foundation, established by the Netherlands Minister for Development Cooperation in 1997 and based in The Hague. Bridges.org is an international non-governmental organisation based in Cape Town, South Africa. This initiative is supported by the Building Digital Opportunities Programme (www.iconnect-online.org), funded by the UK Department for International Development (DFID), the Directorate General International Cooperation (DGIS), and the Swiss Agency for Development and Cooperation (SDC). |