ICT-Enabled Development Case Studies Series: Africa
An initiative of IICD and bridges.org

CASE STUDY: BusyInternet Accra

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% earn 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:
Estelle Akofio-Sowah (Managing Director), [email protected]
Mark Davies (Founder and CEO), [email protected]
Tel: +233 021 258 800
Eml: [email protected]
URL: http://www.busyinternet.com/

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.
Setting up an Internet café in such conditions is not ideal, but Mark
Davies, an experienced ICT entrepreneur, recognised the demand and today he
is the CEO of BusyInternet Accra, the biggest Internet cafe in Africa.

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
[2] International Telecommunications Union,
http://www.itu.int/ITU-D/ict/statistics/at_glance/basic01.pdf
[3] International Monetary Fund,
http://www.imf.org/external/np/pfp/ghana/ghana0.htm#03a1.
[4] International Telecommunications Union,
http://www.itu.int/ITU-D/ict/statistics/at_glance/basic01.pdf
[5] International Telecommunications Union,
http://www.itu.int/ITU-D/ict/statistics/at_glance/basic01.pdf
[6] See the ITU World Telecommunication Development Report: Reinventing
Telecoms - World Telecommunication Indicators, 2002, pA-36.
[7] See the ITU World Telecommunication Development Report: Reinventing
Telecoms - World Telecommunication Indicators, 2002 pA-66
[8] (Very Small Aperture satellite Terminal) A small earth station for
satellite transmission that handles up to 56 Kbits/sec of digital transmission
__________________________________
Author: bridges.org
Date: 31 January 2003

About the IICD and bridges.org ICT-Enabled Development Case Study Series

The ICT-for-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 originations 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).