From hidden costs, misleading calling-card advertisements, high interconnection rates and grey markets, the African international telephony business works well for everyone except those who want to make reliable and low-cost calls to Africa.

Pick up a mobile phone in London or Paris to call Africa and you risk being drawn into an international telecoms heist. Millions of Africans in the diaspora face a dismal choice between exorbitantly high charges and distorted connections. For the companies making the profits and the governments receiving revenues, it is a multimillion dollar business.


Sitting in The Gold Coast, a bar in Brixton, South London, Ghanaian Raymond Bannerman says “it’s a real rip off” to call Africa. He spends around $23 a week buying ‘low-cost’ calling cards to phone Ghana and Benin as part of his import-export business. He says it would be “crazy” to use a fixed-line or to call directly from his mobile. However, instead of the 600 minutes advertised on the cards, he usually gets around 10 or 15 minutes. “They charge you £5 ($7.5) and you definitely don’t get £5 of phone calls,” he tells The Africa Report. “It’s one of my biggest costs. But if you have to call, you have to call.”


Africans living abroad rarely call Africa directly from their mobile phones. Direct calls are good quality and are quickly connected, but they are expensive. Most people use an alternative: a calling card. Calling cards offer discounts but take your call through a network of middle-men, often using ‘grey routes’.


In northern Paris, at a kiosk on a busy corner opposite La Chapelle Metro station, Moussa Sylla is busy selling pre-paid calling cards with names such as Peuple d’Afrique, Nelson 
Mandela and Paradis. “The tariff differs, depending on the quality,” explains Sylla, from Mali.


Calling-card companies usually charge a maximum of $0.40 a minute to call Africa. The same call using a pre-paid SFR SIM card in France would cost $1.94 per minute. In Britain, the O2 network charges its pay-as-you-go customers $2.27 per minute. 


It is much cheaper to call Europe from Africa. To call London from Kenya with Safaricom (in which Britain’s Vodafone has a minority stake) costs $0.37 per minute. Use MTN Nigeria to call the US and it costs $0.27 per minute. 

The price of regulation


So why does it cost more to call Africa from Europe? Western operators blame the difference on high interconnection rates, the fees mobile operators charge for terminating an international call on their networks. But even in countries where rates are at their highest, they are not more than $0.30 per minute – a mere fraction of the price customers are charged to call Africa. Claire Paponneau, senior vice-president for Africa and the Middle East at France Telecom, says that technically calls to Africa do not cost any more than calls from Africa. However, she says that the cost of maintaining shops and back-office services in Europe is much higher than running operations with street vendors in Africa. 


Western operators arrange their prices into baskets of countries. These are not always adjusted when rates change in Africa. Instead, one insider at a UK mobile operator explained it might decide to lose money on calls to one country in a basket, but make profits on others ­– sometimes large ones.


Consultant Devine Kofiloto, formerly with Informa Telecoms, says that Western operators fuel the grey market by charging high rates. “If they brought their prices down, there would be no incentive. That would close their window of opportunity. It’s really as simple as that.”

Read the full investigation in the August-September edition of The Africa Report, on sale now. Click below for a preview or subscribe to The Africa Report via our online store.