ADDRESS BY HIS EXCELLENCY THE PRESIDENT
ALHAJI DR AHMAD TEJAN KABBAH
AT THE COMMISSIONING OF
THE SIERRATEL DIGITAL
TELEPHONE EXCHANGE IN BO
ON 3RD APRIL 2004

(SALUTATION)

The role of communications and indeed telecommunications in particular, in the political, economic, social and technological development of Nations cannot be over-emphasized. Not too long ago, however, a diplomat in conversation with me described Sierratel's main exchange equipment as a collector's item that will be better used if kept on display at our National Museum. I asked him why and his reply was that the switchboard was obsolete.

You can therefore imagine my delight to receive an invitation from the Board of Directors of Sierratel to come to Bo today to commission a new digital telephone exchange! I therefore thank the Board, management and staff of Sierratel for giving me this opportunity to be here today to launch this digital Exchange which, from the evidence I now have, is definitely not for our National Museum.

Our world is characterized by four main societal environments. These are the political, economic, social and technological environments, normally abbreviated as PEST. In each of these environments, telecommunications can, and as a matter of fact, contribute immensely. Consider, for instance, the number of very important official discussions that take place over the telephone everyday at both the national and international levels. Let us also think about the number of ordinary personal conversations that take place over telephone lines every day, not to mention the number of messages sent and received via the internet, the huge possibilities offered by satellite communications that make it possible for us to view television and digital images on an infinite number of channels, and more.

The affordable and speedy exchange of information in the goods, labour, money and capital markets of any country's economy can contribute significantly to the quality of decisions made with respect to transactions carried out in those areas. One of the main considerations in determining the degree of competition within markets is the extent to which sellers and buyers have accurate and reliable information about market conditions. Competitive markets can lead to economic efficiency which in turn can serve as a powerful stimulant to economic growth.

It is the realisation of the significance of the telecommunications industry as an engine of growth and a vehicle for the transfer and distribution of information and data in the economy that led my government, as far back as the year 2000, to formulate a policy for the rehabilitation of the fixed line services of Sierratel with the hope that that development would be accompanied by the introduction of competitive cellular, mobile telephone services.

But soon afterwards Government realised that Sierratel was incapable, both managerially and financially, to achieve the objectives of that policy for the modernisation of the telecommunications industry. The only option then open to it was to privatise the company and at the same time introduce a Telecommunications Act. The Regulatory Authority for the industry to be established under that legislation would take care of the issuance of licences particularly for Very Small Aperture Terminals (VSATs) and Internet Service Providers (ISPs), and would ensure that operators do not infringe the terms of their licences and maintain competition within the industry. Government sought help from the International Finance Corporation of the World Bank for the process of privatising Sierratel but the transaction itself collapsed in 2002 when, Spectronics, one of the key potential investors for Sierratel pulled out of the bidding process.

Because of the lack of financial prudence and disharmony at both the Board and management levels, Sierratel has been unable to meet the challenges to its market share by Celtel and Millicom who now together have about 100,000 subscribers as opposed to Sierratel's 23,000. Obviously its failure to provide adequate fixed line services to meet the increasing demand for telephones is a contributory factor to its loss of market share. The company spent most of 2003 pursuing a joint venture partnership for a mobile service that was commercially unsound and consequently not supported by Government.

Towards the end of 2002, Government opened up competition in the industry with the expectation that a Regulatory Authority would have been in place by the first quarter of 2003. A year has since elapsed without the establishment of such an authority. Meanwhile, uncontrolled competitive market forces have emerged in the market place that have partly contributed to the prevailing rising phone costs and also to the recent instability in the foreign currency markets. This development witnessed a surge in the demand for foreign exchange from Internet Service Providers and VSAT operators to fulfil their overseas obligations.

During 2003 my attention was drawn to some financial and other irregularities in the company which could have been contained if there was unity at both Board and management levels. This situation has made it difficult for the company to focus on the necessary remedial actions that should be taken jointly by the Board and management to improve financial controls and the proper supervision of the company's operations. Government is concerned that these corporate financial malpractices have also made it impossible for the company to pay dividends to government since I became President in 1996. In normal competitive private market conditions, a situation such as this would be a recipe for a take-over bid, resulting in the company's new owners dismissing the non-performing management. As a first step, however, Government and the National Commission for Privatisation have injected some fresh blood into the Board with a view to bolstering its strength and thereby restructuring and streamlining the management of the company. We look forward to some progress flowing from this initiative.

Let me now turn to the main reason for which we are here today. During the last few months government deliberately embarked upon decentralising the political process by holding regional cabinet meetings in all the provincial headquarters and is now preparing the ground for local government elections to be held in May 2004. The dispersal of zones of economic development away from Freetown to the provinces is a corresponding economic expression of our policy of decentralisation. The Commissioning of this digital telephone switch board in Bo today is an example of this trend and marks the end of the first phase of Sierratel's programme of providing modern telecommunications services in the provinces, which involves the replacement of a total of 1300 lines of old electro-mechanical switches in Bo, Kenema and Lungi that were installed over thirty five years ago, with a four fold increase in digital lines totalling 5000.

In Bo, 2000 new digital lines will replace 500 old ones, whereas in Kenema 1500 new lines will replace 500 old ones. Lungi will have another 1500 new lines to replace the old 300 lines. This new facility makes it possible for calls to be made from Bo, Kenema and Lungi by International Direct Dialling (IDD) worldwide and within the country. Internet access is therefore now possible to large databases globally from these three localities in Sierra Leone. Additionally telephone services have been restored at Rotifunk and Moyamba.

Sierratel's second phase of restoring telephone services in the provinces has already started with the refurbishment of microwave radio stations that were destroyed during the rebel war in Segbwema, Landofeh mountains, Koidu, Port Loko, Lunsar and Makeni. This is to be followed by the installation of digital systems before the end of 2004. Around 63% of these microwave radio stations are currently powered by solar energy which is environmentally friendly and relatively inexpensive.

I have been informed that Management and the Board have recently been developing a programme of collaboration with Ericsson, a renowned Telecommunications Company from Sweden, to add to its operations a mobile phone service and wireless land phone facilities that can be installed in remote rural communities with minimum infrastructural development.

Government welcomes this initiative, the realization of which, I understand will pave the way for a renewal of the Company's direction. The successful implementation of this project will be a test of the renewed commitment of the Board and Management to raise the level of performance of Sierratel and prepare the company for meeting the challenges it now faces in a highly competitive environment.

I note that similar upgrading of the telephone facilities has commenced with the refurbishment of microwave radio stations in Port Loko, Lunsar and Makeni. It is important that greater attention is now directed at the Northern Region which has lagged behind in the telephone rehabilitation process because of continued rebel presence in the region even at the latter period of the war.

As I have said at the outset government is aware of the enormous economic and social benefits to be derived from the provision of an efficient, affordable and accessible communications system. It is for this reason that government supports such policies as the privatisation of Sierratel and the setting up of a Regulatory Authority to stimulate healthy and constructive competition in the industry. The management of Sierratel is therefore urged to adopt measures that would make Sierratel attractive to serious external investors who could bring to the company both new money and modern technology. The Ministry of Transport and Communications and the National Commission for Privatisation should endeavour to make arrangements for the speedy enactment of the draft Telecommunications Bill so that confidence can be restored and orderly competition can take root in the industry. These measures, it is hoped, will also put a check to the current exorbitant increases in cellular mobile telephone charges, and thus reduce the burden of high charges on the ordinary citizen.

It now gives me great pleasure to officially declare the new digital exchange in Bo open, which also covers Kenema, and to thank you all for your attention.

-End-