Private Sector Development

This summary is part of a research project carried out between March and October 2006 in support of the International Institute for Communication and Development (IICD), one of The Communication Initiative (The CI)'s partners.

According to this case study, due to the costly information and communication technology (ICT) infrastructure a majority of Ghana’s 20 million people, of which nearly 50% earn less than US$1 a day, are left without affordable internet access. Moreover, poor telecommunications infrastructure, erratic power supply, and power shortages have rendered the quality of internet connectivity questionable, at best.

After first considering establishing a non-profit organisation that would provide subsidised internet access to Ghanaian students and business people, the co-founders of BusyInternet (BI) Accra opted for a for-profit business for reasons of sustainability. BI Accra opened its doors in November of 2001 after a year of research, 10 months of groundwork, and a capital outlay of US$1.7 million. It took just four months for BI Accra to become cash flow positive.

The primary objectives of BI Accra are to incubate ICT companies and provide local businesses and the general public with affordable and reliable access to ICT.

In order to accomplish these objectives, BI Accra created an internet access facility that accommodates up to 200 people with 100 flat screen PCs and 15 wired offices. VSAT internet connection, 1 megabyte of bandwidth, a backup power system, and an internal network ensures high quality and reliable internet connectivity. Both financial and social return is of equal importance to BI Accra. ICT start-ups can rent serviced office space, which includes reception facilities, telephones, electricity, broadband internet and security. In addition, BI Accra actively markets the services of these ICT companies in return for them running community programmes that have a far reaching impact on socio-economic development. BI Accra recognises Ghanaian economic poverty levels and thus prices its services in line with local income and ability to pay. Half-price nights have been established for those unable to afford the regular price. They also offer subsidised rates or no fees to groups working on community development issues.

The following outcomes have been observed:

• 50% of BI Accra is now owned by local Ghanaian investors;
• On average, 1,800 people gain internet access daily;
• Sustainability is being achieved with over a 60% occupancy rate for BI Accra;
• Ten ICT businesses have been successfully incubated in just over a year's time;
• Free monthly debates and organised expert lectures are hosted by BI Accra to raise awareness about national ICT policy;
• Networking forums and lunch discussions are also organised to give young entrepreneurs the chance to make contacts in the business community; and
• Subsidised or no-cost internet access is offered to those participating in HIV/AIDS workshops, “Internet-for-Beginner” classes, the monthly “Internet for Schools” programme, and the weekly “Internet for Kids” workshop.

The following challenges were noted:

• Poor technology infrastructure, such as telephone communications and unreliable electricity, has made it challenging for people to access the internet; and
• High economic poverty levels deny a majority of the population the ability to afford internet access.

Key factors leading to the success of the project:

• VSAT internet connection, which ensures internet connectivity via satellite instead of telephone lines;
• Use of backup power resources and transformers to ensure reliable internet connectivity;
• Subsidising internet access for the public and groups actively involved in community development initiatives;
• Stimulating debate and engaging stakeholders by hosting policy workshops on Ghana's ICT policies.

BI Accra will expand its services into other African cities within the next three years. They are actively lobbying for the legalisation of Voice over Internet Protocol (VOIP), which they hope will dramatically reduce the price of telephone calls by routing them via the internet. BI Accra also plans to extend service offerings to their tenant ICT companies to include capacity building, financial advice, marketing and fundraising. Finally, they are negotiating to host the Ghana Internet Exchange.