VZCZCXRO1284
PP RUEHMA RUEHPA
DE RUEHCO #0111 0500614
ZNR UUUUU ZZH
P 190614Z FEB 08
FM AMEMBASSY COTONOU
TO RUEHC/SECSTATE WASHDC PRIORITY 0180
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS COTONOU 000111 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EEB/CIP/BA 
AF/W FOR DBANKS 
 
E.O. 12958: N/A 
TAGS: ECPS EINT BN
SUBJECT: TELECOMS: LACK OF ELECTRICITY AND BANDWIDTH 
 
REF: STATE 9659 
 
1.(U) Summary: In conversations with EconOff, business leaders in 
Benin's mobile telephone and internet provider sectors related the 
challenges and opportunities they face.  The mobile telephone 
providers highlighted the lack of a stable power supple and a 
saturated market (5 mobile phone providers for a population of 7.9 
million) as obstacles to growth.  The internet service providers 
bemoaned the high prices they pay Benin Telecom, a parastatal 
telecommunications company, and the low bandwidth that is available 
as inhibiting factors to the development of internet access in 
Benin. End Summary. 
 
--------------------------------------- 
Mobile Phones: Where's the electricity? 
--------------------------------------- 
 
2.(U) According to Talibi Haidra, the Director General of MOOV 
Benin, a local mobile telephone provider, the major impediment to 
the growth of the mobile telephone sector in Benin is lack of access 
to a stable source of electricity.  According to Haidra, each of his 
transmission facilities must have a back-up generator to provide 
power during frequent power outages.  Additionally, several of the 
transmission facilities are located in areas which are not served by 
the electrical grid, which requires MOOV to maintain two generators 
at each location providing power 24/7.  This results in higher 
prices for consumers as electrical power is expensive when generated 
by MOOV instead of procured from the grid. 
 
3.(SBU) Haidra also cited uneasiness with the GOB's licensing scheme 
as a possible impediment to growth.  Citing irregularities in the 
licensing agreements negotiated by a previous administration, the 
GOB annulled the licenses of all of Benin's mobile phone providers 
and required re-negotiation of the licenses and additional payments, 
in 2007.  While Haidra believes the situation has been resolved, he 
underlined that such changes in government policies discourages 
investment in the sector.  Haidra also felt that the GOB, with five 
operators for approximately eight million people, had issued too 
many licenses with the competition now demanding prices so low that 
quality will suffer. 
 
4.(U) Haidra identified internet provision as a possible sector for 
growth.  MOOV recently began offering internet access over its 
network and Haidra projects that he will eventually have around 
50,000 customers for this service. Haidra stated that the 
manufacturers of the pylons for his transmission antennas and VSAT 
equipment were American but he procured the equipment through 
regional re-sellers.  American companies may have an opportunity to 
sell directly to local mobile phone service providers if they 
desire. 
 
-------------------------- 
ISP's: A lack of bandwidth 
-------------------------- 
 
5.(U) Internet access in Benin is provided through three different 
vehicles: dial-up, ADSL, and wireless connections.  In discussions 
with the internet service providers association in Cotonou several 
obstacles to improved service were revealed.  Internet service is 
provided to Benin by fiber optic cable.  At present Benin Telecom, 
which re-sells the access, subscribes to a 155 mbps connection with 
the intention to upgrade to two gbps in April 2008.  Benin Telecom 
then resells internet access, at extremely high prices, to private 
internet service providers, as well as to its own customers. 
 
6.(U) These high prices are passed onto consumers which slows the 
growth of the market.  For example, a 128 kps ADSL connection costs 
approximately 75 USD a month.  A one mps connection costs 
approximately 1,000 USD a month.  Internet service in Benin is also 
expensive because of the lack of a local routing system for local 
internet traffic.  Without such a system all traffic is routed 
internationally resulting in higher prices for local internet 
service providers.  The equipment for such a system has been 
delivered to Benin Telecom but the company has not installed it. 
 
7.(SBU) Comment: The major impediments to telecommunications and 
internet access in Benin are a lack of electricity for mobile phone 
operators and a lack of business acumen at Benin Telecom, the public 
telephone company.  Problems with the electricity supply await 
government intervention to increase supply and the area covered by 
the electrical grid.  The problems at Benin Telecoms could be 
resolved by business leadership which understood the cost benefits 
of negotiating a better price for access with its fiber optic 
internet provider and then passing on those cost savings to 
customers which in turn would drive an expansion in the market and 
more profits in the long run. End Comment.