Could East Africa become an outsourcing hub?

An internet cafe in Dar es Salaam. The internet connections at these establishments are painfully slow and expensive. (Eamon Kircher-Allen/GlobalPost)

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DAR ES SALAAM, Tanzania — Ramadhan Mubarak shook his head as he gestured to his six forlorn PCs.

“I believe that many people want to use the internet,” he said. “But most Tanzanians are poor, so they can’t manage the cost.”

Mubarak owns two of the handful of internet cafes in downtown Dar es Salaam, and he can barely cover his overhead of $1,500 a month. Like many people here, he’s hoping that will soon change: East Africa’s new fiber-optic cable has been laid across the Indian Ocean and made landfall here on July 23. When it goes into use in late August, it is likely to dramatically reduce costs and improve connectivity speed.

The cable, which is a two-year, $650 million project of the private venture Seacom, connects East and Southern Africa to India and Europe and will end the dependence of Tanzania’s internet on satellites. Even accounting for exaggeration — some boosters have promised it will improve education and healthcare and curb corruption — pretty much everyone who uses the internet here agrees that fiber-optic connectivity is nothing short of a revolution.

“I think you'll see a wave of creativity and new business opportunities as more and more Africans come online by the millions,” wrote Jon Gosier, a founder of the Uganda-based software development firm Appfrica in an email message. East Africa could become an outsourcing hub, said Gosier, who maintains a blog on African tech innovation. “I think in 5 years or so we'll be where places like India and Singapore are now.”

At Dar es Salaam’s iStore — the city’s Mac vendor — employees were optimistic that fast Internet would make their high-end machines attractive to more businesses and home users.

“The fiber cable’s going to work,” said Kishan Vadher, a salesperson. “Especially because of the way we are used to the internet.”

What Tanzanians web surfers “are used to” is fickle and crushingly slow browsing. The internet is also astronomically expensive. Businesses signing up for a connection of one-megabyte-per-second (MBps) with BensonOnline (BOL), a Tanzanian ISP that offers unlimited data transfer, pay $4,800 a month. In contrast, in the United States consumers can pay less than $100 a month for that kind of bandwidth.

Even “normal” BOL subscribers — who get 256 kilobyte-per-second connections — pay $1,500 per month for their subscriptions. When small businesses split the bandwidth between several computers, basic internet activities can be excruciating.

http://www.globalpost.com/dispatch/africa/090807/tanzania-gets-broadband