Could you give us a brief overview of your career until your appointment as Managing Director of L.T.C?
I was actually in the public sector. This was way back almost 20 years ago. After I left school, I was employed at the Ministry of Finance, in the area called the Office of the Comptroller General for Public Corporations. My responsibility was to review and analyze the performance of government-owned companies and to report to the Minister of Finance all the issues that have economic importance and consequences for the country. We were involved in the budget process and the annual report for instance among other tasks. That job was like the stepping-stone for my next position which was also in the public sector. I was appointed Managing Director of the Liberia Sugar Corporation (LIBSUCO) which at the time was a major investment in the Southeastern part of Liberia. LIBSUCO was a 6,000 acres plantation with a sugar factory. It was done through a partnership with the Republic of China. While I was there, President Tolbert's successor, Samuel Doe, invited me and offered me a job as Managing Director for LTC. I was in the position for six years before I tendered my resignation; then, I went into the private sector as General Manager of a paint manufacturing company which was somehow of family interest. Then the war came and everything was disrupted. After the war, when President Taylor assumed the presidency, he invited me to assist with the rehabilitation of the telecommunication company.
As a former officer in the Comptroller General's Office, how did you view the performance of Public Utilities at that time?
In the 1970s, putting things in the right perspective, we have to understand that it was a period of boom for Liberia. Liberia in 1979 hosted the OAU conference. There was a lot of infrastructure development. Before that, in the mid '70s, the government of Liberia was trying to enhance the performance of the parastatal (government owned companies). They tried to do that by making them to operate as commercially as possible with minimal political influence. In the way of history, prior to that time, the LTC was under a company called the Public Utility Authority (PUA). The company included the Liberia Telecommunications Corporation, the Liberia Electricity Corporation, the Liberia Water and Sewer Corporation and the Liberia Broadcasting Corporation. All of these companies reported to the chairman of the PUA. During the mid-'70s, through the effort of the office of the Comptroller General, the government decided to decentralize to have each company in the PUA operating on its own. In the case of LTC, particular attention was given to remove it from the Posts and Telecommunications Ministry, which was more in a government office. They wanted LTC to be as commercial as possible with profit motive. The company's financial performance needed improvement. The thinking at the time was there was not enough attention given to the business and commercial aspect of the company…and traditionally, the company has been headed by an engineer. So, following these arguments, it was decided to have a non-engineer to head the company with his principle deputy having engineering background. As it stands today, the reason LTC is seen as one of the more viable corporations is partly because of the nature of the industry. We believe that the telecommunications sector can positively impact all of the sectors such as education, health, operations of government; every sector is touched and influenced by the telecommunications. Coming out of a long war, the expectations of government are very high. But coming out of a long lasting war, we had to face a lot of devastation; almost all of our networks outside Monrovia were destroyed in this war. That is the bad news. The good news is the equipment that was destroyed in the war would have been obsolete today because of new technology. The other good news is a lot of the new technology is less expensive than the technology of 20 years ago. So we have the opportunity now to expand our network taking advantage of more recent technology at a more affordable cost. Our strategy on paper and what we had planned to do was first to assess the situation, try to rehabilitate what is fit to rehabilitate from the network, try to modernize where it is feasible and most importantly, to expand the capacity. Our capacity today is less or pretty close to what it was before the war. But over 10 years have passed, so we are lagging behind in terms of development. We have gradually moved from an analogue environment to a digital one. We have two earth stations, which are state of the art, operating on the IDR technology, which is the latest technology, and that is connected to our switching center, telephone exchanges by a new, modern micro-wave link. These two investments were done through the cooperation of some of our foreign partners. The earth stations and the microwave link were contributed through the participation of MCI and AT&T jointly, both American private companies that have interest in terms of business relationship. They were both our main telephone carriers. What we have not yet done adequately is to expand our switching capacity. In the switching area for Liberia, the main exchange is in this building. It's an old exchange. It was installed in 1988 there about. Most of our revenue is generated from the digital exchange. We also still have an operation on the analogue exchange. Both are manufactured by Ericsson. The analogue exchange was installed in 1964 and it's still working. It makes a lot of noise and doesn't have many of the features that digital has. Our primary effort is to improve our switching capacity. In February of this year we had a major fire that caused significant damage to the exchange. Since that time it was only on October 26 we had a major equipment failure. The old exchange was down. So, for all practical purposes, no telephone was in Monrovia through LTC. We feel it is counter-productive to focus so much on the problems of the country and on the problems of LTC. We are trying to focus more on the solutions. The government of Liberia has made it clear that it is supportive of the idea of privatization. LTC is one of those companies that is considered for privatization as well as the Liberia Electricity Corporation, Liberia Water and Sewer Corporation and some others. We are of the opinion that telecommunications company maintained by government as a branch of government will not have access to the capital market where they would need the capital required for an accelerated pace of development. We endorse the idea of privatization, but we feel the government should be careful in how they get there-by being as objective as possible and by making sure that potential investors have sincere commitment for the welfare of the country. We have invited the ITU (International Telecommunications Union) to assist in making assessment of the telecommunications sector in Liberia. The ITU sent a mission here that studied the law creating the LTC and the law creating the Ministry of Posts and Telecommunications. They looked at broadcasting and they looked at other operators here. They came up with a document entitled: "The Liberian Telecommunications Sector Reform." In that report, the ITU mission proposed steps the government needs to consider in the privatization process. The steps are first, liberalization, second, privatization and third, create an independent regulatory agency. The government has already introduced the concept of liberalization. Besides the LTC, there are two other operators that are working.
Cellular operators.
Yes. There is also a third one, a GSM cellular operator that has been licensed.
What is its name?
I believe it is called Lone Star communications. I believe and understand that they should begin operation at the beginning of 2001. So that will introduce GSM into the network. But the mobile and cellular operators are both competitive and complementary. LTC as fixed network provider has limitation on where it can reach. Our cable plant is rather small area. We have also installed a wireless system. It's called the wireless local loop system, which gives us opportunity to compete with cellular operators in the same areas where our cables are not reaching. And that project is helping our competitive situation.
What is the extent of your network?
Currently, the fixed network has 7,000 subscribers. Of those, 5,000 are on the analogue and 2,000 on the digital. The local wireless loop system has capacity for 2,000, so you are looking at installed capacity of 9,000 right now, only in the Monrovia area. Before the war we had 10,000 subscribers only in Monrovia. So we are about where we were before the war. The wireless switch that we have here is expandable to 10,000 wireless lines. It also has the option of connection to fix lines or wireless. | The size of the market is smaller compared to other neighboring countries and the investment required is very high. How do you intend to cope with the limitation of the actual market size and the technological requirements?
The market is small depending how you look at it. One of our goals is to make telecommunications services available and affordable to the people of Liberia. Assuming Liberia has a population of two million, you have presently 10,000 lines working, and the other cellular phone companies have maybe 1,500 between them. There is a tremendous suppressed demand. There are a lot of people on the waiting list for telephone. So true, the market is small, but the demand is so much unsatisfied that there is a tremendous opportunity right now for all of the players and even perhaps for new players to enter the market. The focus had been for Monrovia. But Monrovia is not Liberia. You have big cities out of Monrovia, where none of the operators has installed capacity. When you look at the size of the market compared to other countries, it is small. But when you look at the size of the market, potential market, it's quite sizable to be tapped. It's a resource yet to be tapped. I believe if the capacity existed, quality of services existed and thirdly, if the price was affordable enough, you could have over 100,000 telephone lines within a couple of months in Liberia.
What makes LTC an attractive partner for any potential investor?
Our problem is also our chance. Every challenge presents certain perspectives. In our case, the challenge is to provide good service to the people of Liberia. The opportunity is because the service is so limited and the quality is so wanting, that there is tremendous potential for the right strategic partner in partnership with LTC to go out and improve the quality of service, its availability, and expand to the benefit of the partnership as well as to the benefit of the country. In the long run it is the total number of subscribers that will bring profitability to the investment.
MCI and AT&T are American based companies. Relations with the United States are tense. Do you foresee any other strategic partner likely to be involved in the process of rehabilitating and building a commercially viable entity?
The American foreign policy attention at the time didn't have negative impact. We are still dealing with them. They are the major carriers of our traffic. I don't think so far there is official effort to affect that in a bad way. There are other issues that are happening in the industry. The U.S. is moving to reducing the cost on the tariff. Right now, we are still relatively high with our conventional carriers. They have a new concept, which they refer to as the carrier carriers. Some of the very big giants like AT&T and MCI, so as to minimize cost, might go to another carrier to direct traffic to Liberia. So, if you can do it the cheaper and conventional way, why not? All telecommunications companies in the world right now are rethinking some of their original tariffs structure, because there is lots of new technology that is driving competitiveness. For example Internet. There is a private Internet Service Provider in Liberia. LTC doesn't have Internet service. When I was discussing with the President (Taylor), I told him that in the beginning we tried to fix telephone service first. But in hindsight that was wrong thinking because any telecommunications company that doesn't get involved in the Internet Service and in the cellular mobile services will gradually loose market shares, and eventually will have no business. So it is very important to have strategic partnership…someone who is able to bring about an accelerated pace of development in the area of Internet service, in the area of cellular, mobile services, so that we can try to keep with the technological development.
What would be the profile of the ideal strategic partner?
If the decision was up to me alone, I will be looking for somebody (1) who has the expertise, the capital and the resources necessary. But beyond that, someone who has the commitment and believe in the future of Liberia to make that investment and make the partnership work. I think it's natural because of the nature of the industry that Internet services will be an area of focus as well as cellular mobile service. The reason for that is because it is much faster to install new capacity utilizing wireless technology than it is to utilize the old cable fixed wire.
There has not been a time frame set up for the privatization process...
Some countries approach privatization through open tender. Liberia may not have the luxury because you have certain countries that have taken position of sanctions or other restrictive approaches to Liberia. In such a case, we may have to explore the option of identifying those friendly governments or countries where the private sector interest exists for meeting the criteria for Liberia. There are so many ways to approach the privatization of Liberia. It's just important that government begins to look at all the options and say this is the one that is best at this point in time.
Under your leadership, where would you like to take the LTC?
Under my leadership, if I had a wish to be granted, I certainly wish for the capital to be acquired to bring about the expanded capacity or modern equipment that have the features and benefits that are attractive to the people, the customers and that will begin to extend telephone services to the rural areas of Liberia. In two words, my wish and dream is to make telephone services available and affordable to the people of Liberia. We talked about the digital divide, the technological gap between the western countries and Africa. The truth is that gap is getting wider and wider. As we talked about the Y2K bug 9-10 months ago, people lost track of the fact that today you have people in Africa who have never seen telephone before - who have never even heard a dial tone. So to me a development program has to be realistic, you have limited capital and lots of constraints. It is necessary to keep things good with technology, but it is also important to make some level of adjustment to satisfy the objective realities of your own situation in your country. There are people in rural Liberia who don't care whether they have a digital or analogue phone. But just give them a phone so that they can call. We, who have the privilege of serving our country in the decision making areas, we have the challenge of being able to balance the modern, the new, the high technology with the practical reality of our day.
What has been your most challenging and rewarding experience as Managing Director of L.T.C?
The most challenging has been trying to manage the limited capital resources. Up until now, our financial performance is adequate to meet our basic operations, but not adequate enough to meet operating cost and investment in the infrastructure and expansion. One of the most rewarding feelings is to gradually introduce new technology that is more modern and more reliable.
What message would you address to the half million readers of Far Eastern Economic Review?
Liberia presents tremendous opportunities for investment, and particularly in the telecommunications sector because of its limited stage of development; it's almost back to virgin forest waiting to be harvested. So I think the potential investor should be willing at least to take a look. We have a strategic position within Africa. You have all of the African countries that are standardized with certain technology like the GSM. Liberia right now is not in that. Hopefully we will be in the future. But if you look at investment in Liberia not from the narrow perspective of Liberia as small country but beyond, Liberia is an active player in Africa whereby investment could reap return as the result of sub-regional activity between Ivory Coast, Guinea, Nigeria and Ghana, for example. Liberia Telecommunications could really be a window to the rest of Africa. |
LIBERIA TELECOMMUNICATIONS 