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Part Two:    Defining existing resources & providing support

By Dr. Richard Ochero & Vanessa Kratzmann

This is the second in a series of articles informing TPC readers on a project currently underway to supply computers to Uganda. The September article introduced Africa, then Uganda, illustrating the physical beauty and the political hardships that define reality there. For those of you who did not see last month's article, among other things, the following demographics were discussed and will be of importance in this month's discussion. The article is also archived on the PCs4Uganda website.

There are 20 million people -
20% in the cities and 80% in the rural areas
5% in Kampala, the capital city
1% possesses wealth and influence
20% are the engine of the country and the economy. They are the English speaking, skilled working class, which in Uganda means poor, but educated according to British standards. This 20% is the center of potential for this month's article.

The inventory of PCs in Uganda will shock you. Consider pop. 20 million. My estimate is that there are approximately 1000 PCs in the country. They are in one of two venues: accessible and inaccessible. The aim of this project is to supply the arenas that provide access, namely schools and community access centers.

Where the 1000 PCs are.
Of the five locales, Educational Institutions and Public Access venues are the focus of this project.
Private companies (over 50%) are primarily foreign and house PCs that are inaccessible to the public.
Government institutions (less than 10%) have a very limited number of systems that go largely unutilized for more reasons than there are actual computers.
Residences (negligible) that do have computer systems are predictably the 1% aforementioned: the wealthy influential homes, who misuse their privilege by treating the PC as a status symbol instead of a real work tool.
Schools and educational institutions (20-30%) make up the fastest growing accessible sector. The results of their sadly irrelevant and out-of-date curricula have, none-the-less, been very effective in conveying a basic message to the young workforce: that computers are indispensable. The access to computers, no matter how bare-boned they may actually be at these schools, has created a genuine curiosity, a mind-expanding awareness, and ultimately an expectation of more to come in the minds of students who have passed through the halls of these institutions in recent years.
Public Access (near 10%) in the form of Community Centers offer promise provided they are able to acquire equipment. Until now, they have not been able to. Alternatively, Internet cafes exist, but these commercial enterprises tend to limit themselves by lack of vision or business sense. In defense of these well-meaning entrepreneurs, they are limited by lack of resources and insufficient support services (i.e., on-line access). And many thanks to them for providing the only public access to computers to date.

The state of the IT industry
Human Resource Potential
Examining existing educational programs, public access points and those who attend them was the inspiration for the PCs4Uganda project. This is what exists now.

Ugandan vocational schools have been able to set up curricula based on learning computer skills. These schools have touched the minds of the young workforce. And in their free time, during periods of unemployment and upon graduation, these city youth flock to Internet cafes, which have sprung up in the capital. This shows a connectedness of the next working generation with the world outside Uganda. These hangouts have positively sparked the imagination city youth looking for productive ways to spend their time. 90% of young people that were asked revealed that they were there to hang out, meaning that technology and information access is considered to be cool. They accept computers as part of their everyday life, and as they grow into responsibility, the necessity for computers is a sure thing. It is important to note that these educational programs and café business ventures exist because there is a demand. The presence of the West and IT is felt by this generation, who recognize the power of computer technology, even with such limited exposure. The potential for Uganda's skilled workforce to succeed on a global level is realistic with the right hardware.

Equipment Shortage Challenges
There exist three main factors that truly prevent growth in the IT industry and even threaten to leave Uganda so far behind that it may never meet a level of sustainability on a global level. These factors are supply, infrastructure, and economics. Improvements in the area of infrastructure are being made, leaving supply and economics as the real hurdles to overcome. The distribution of computers and related services is aimed at a severely limited customer base, namely the privileged 1% that have accumulated wealth. This narrow market that the few distributors have targeted in Kampala is in itself frustrating because it is a classic example of a price tag being placed on information, making the gap between the rich and the poor more defined. It excludes the country's workforce, along with this most unique segment of the society (the youth) that in recent years has shown curiosity in the prospects of the computer interface - the next generation that is the key to Uganda's economic stability and growth.

Supply problems (i.e., acquisition/distribution)
Because the customer base is so small, Computer Retail is not an attractive business in Uganda. Those who can afford local prices prefer to buy abroad. The end result is that little to no distribution exists locally. What does exist are parts and service providers that target the few PCs operating in companies and schools. The market is too small to grow, and furthermore, the few existing businesses have no competition.

Telecommunications Infrastructure and ISPs (i.e., access to consumers)
Progress being made: UTL was the only phone company (government owned) up until five years ago, when Celtel brought in wireless hand phones. They made money but only in the capital region. MTN, a South African company, arrived three years later, bringing prices down with the competition. MTN then invested in the installation of transmitters in all major towns outside the capital. In less than a year, they bankrupted Celtel and stole the mobile phone market. As of last year, these events had brought the number of wireless phones to 250,000 in less than three years. It took the country over 40 years to reach 56,000 landlines.
Recently, UTL was sold to a French company. They have supplemented landlines with wireless transmitters and provided internet services. In addition, a monthly flat rate has been introduced, removing the biggest barrier to internet access. This has put pressure on MTN, who has done a good job until this point in creating an infrastructure. The competition between these two companies is good news for the IT industry. Case in point: this time last year, ISP cost U$60/month for insufficient connectivity and the phone company charging a separate bill by the minute. Today you can have a flat rate U$45/month for both phone and ISP bills. Celtel was bought out by a Swedish company. This can only improve the situation from the consumer's point of view.
A total count of ISPs at this time last year: three. Africa Online then bought out one company bringing down prices and raising efficiency. UTL, under its new foreign investors, has now entered the trade, bringing the count of ISPs in Uganda to four. While home access is still not affordable at this time, a surge in demand for affordable access through an increase in personally/small- business owned PCs will bring swift changes to rates charged by these marketing savvy telecommunications companies.

Economics (i.e., the cost of systems, software and access)
Reality: In a country where the bulk of the working population exists at or around the minimum wage level of about U$20-40/month, the pricing of PC related equipment and services is high. And contrary to commercial logic.

  • Aside from 17% VAT, Uganda has no additional tax on PC equipment. Yet a second-hand 486 has a price tag of U$1000+. Peripherals including cables and floppy disks are 100-1000% more expensive than in Tokyo. And most of what is on the shelves is secondhand.
  • The expense of an ISP at U$60/month, while an improvement over the cost in 1999, is still not a justifiable expense in the home, even to business people with foreign incomes (higher than the incomes quoted above).
  • Internet cafes charge U10-20cts/min. The lines are slow. Accessing a hotmail account, for example, takes 3-5 minutes. So the total process of logging-on, writing one paragraph and then sending it takes a total of 10 minutes. Surfing the net is not affordable on a regular basis, and falls into the category of an occasional luxury.
  • Local PC schools charge U$10-30/month tuition for 10 classes that do not cover relevant applications. For example, MSDOS is covered in the first five lessons. Professional institutions, which are longer in duration and cover more applications, are no better, offering extended courses where a few relevant software programs are covered among near obsolete applications. Once sample curriculum reads WinOS and MSOffice with MSDOS, Pagemaker, Lotus, ccMail, and WordPerfect. Where are the now relevant basics--typing programs, Windows98/2000, Internet, Word and Excel to be found? They are not.
Supply, Infrastructure and Economics all make progress at their own rates depending on so many factors. The aim of the PCs4Uganda project is to be a contributing factor in the areas of Supply and Economics.

Aims of the Project
The vision of the PCs4Uganda project is to connect Uganda's outlying local districts to the capital city, Kampala, through computer networks and provide this generation of youth with the opportunity to change their title from poor, but educated to empowered and connected. The PCs4Uganda project has been established to provide educational institutions and local public access centers with large quantities of donated computers, essentially flooding the country with access to the technology. This wave is projected to set off a series of changes in existing conditions. The demand for more affordable services will create competition for ISPs. The public, newly equipped with systems and support, will require local retailers to reconsider their inflated prices. The working class will be able to afford - through income and affordable tools - to keep pace with their peers in other nations around the world.

And finally, a new more efficient mode of communication from the capital with the outlying towns should lead to escalating growth in all other sectors of the economy. Quantity and precise timing are essential with this project to set these changes into motion.

Old PCs bound for the junkyard could connect a fragmented Africa, the way used cars have done from the 70's until now, and because the IT knowledge has more depth, the results will be more profound. The automobile did it at 50km/hour, the computer can do it at a whopping 500MHz/second.

Future segments will report on progress being made with the PCs4Uganda project, as well as updates on Uganda itself.

For more information, please visit the website.

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About the author
Richard Ochero left Uganda in 1981 to study in China. A qualified Medical Doctor, he worked in Hong Kong for 3 years, before linking up with Terry Lloyd at LINC Media about 5 years ago. He has since worked with Panache at the UBS; with LINC at Ericsson and is currently based at Morgan Stanley. He's also editor for two of LINC's several newsletters. Richard returned to Uganda for a short visit in 1999 after an 18 year absence. This so- called one month visit turned into a 2 year re-acquaintance with his homeland. Two month ago he launch the "PCs for Uganda" charity Project.

© Algorithmica Japonica Copyright Notice: Copyright of material rests with the individual author. Articles may be reprinted by other user groups if the author and original publication are credited. Any other reproduction or use of material herein is prohibited without prior written permission from TPC. The mention of names of products without indication of Trademark or Registered Trademark status in no way implies that these products are not so protected by law.

Algorithmica Japonica

October, 2001

The Newsletter of the Tokyo PC Users Group

Submissions : Editor

Tokyo PC Users Group, Post Office Box 103, Shibuya-Ku, Tokyo 150-8691, JAPAN