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Africa heads for nomadic Internet age

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By 2015, a fifth of African Internet traffic will be carried by cellular networks, compared with a global equivalent of just 3%. Informa Telecoms & Media (ITM) expects the broadband experience in Africa to become increasingly nomadic with the number of broadband connections over cellular networks exceeding 250 million by the end of 2015.

The ITM State of Broadband in Africa Survey was conducted online in June and July 2011, and quizzed over 250 respondents on the state of the market. When asked how important different communications service types are in influencing Africa’s economic development, the overriding response was that mobile telephony and broadband services are making the most positive impact on economic growth.

Africa’s communications market is mainly consumer-facing but, at a time when operators need to find new revenue streams, it is noteworthy that enterprise services are seen as highly important to so many of the respondents’ business strategies. Enterprise mobility services will play an important part in the future strategies of many operators, and especially in the region’s more developed markets.

In a competitive marketplace ‚ and there are few more competitive telecoms markets in the world than those in Nigeria, Tanzania and South Africa ‚ it is important that carriers can differentiate either in terms of network quality or products. Informa believes that the digitisation of Africa can only become a reality if the customer experience of internet services is good.

A supply of local content is pivotal to this customer experience: The demand for highly-valued and relevant content is a major driver for Internet take-up. But the primary sources of content in Africa remain international, and there is a paucity of local content available.

For the continued growth of broadband in Africa, it is important that this changes, Informa has found. Without enough relevant local content, international content alone will not maintain usage at the levels required by the operator. But the most popular internet sites accessed across the continent are still the likes of Facebook, Google, BBC and YouTube. Proving a business case for expansion is the main inhibitor to new broadband growth with 55 per cent of respondents claiming the infrastructure costs are the most significant impediment to expanding broadband rollout. On a similar theme, 40 per cent point to insufficient connectivity and backhaul as providing an obstacle to broadband growth.

The arrival of new submarine cables should help to rectify the retail broadband service issue and there is some evidence that the EASSY and Seacom cable systems are having some impact on retail broadband markets on the east coast of Africa. Certainly, the associated declines in bandwidth pricing in wholesale data markets have been significant, but this has not always crossed over to the retail market.

According to the survey, improved international capacity (34 per cent) has been the single biggest impact of the landing of new submarine cables since 2007, just ahead of lower international bandwidth pricing (32 per cent). Back at the time of the Africa Connect Summit, SAT-3 was the only submarine cable serving Africa’s west coast. Four years later, there are five additional operational cables, two of which serve East Africa. These cables provide a potential 15 Tbps of international bandwidth ‚ in 2007, Africa had access to an estimated 0.04Tbps. Little wonder then that a third of the survey’s respondents said that additional international capacity has been the biggest impact from submarine cable investment.

* Article courtesy information telecoms & media, organists of AfricaCom.

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