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Continental shift is coming

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Over the past few years, Africa has been playing catchup with the world in terms of connectivity and even though it is now nearly on a pr, there are still many African countries being left behind, writes ANTÓNIO NUNES, CEO, Angola Cables.

In 1994, there were more telephone lines in New York City than there were in the entire continent of Africa. Over the next two decades, digital transformation in Africa dramatically picked up speed. Today, the continent is teeming with pioneers building ‘digital bridges’ within and between villages, countries and continents, as well as connecting Africa to the global economy and research communities. Inasmuch as this may be true, many parts of Africa continue to play catch-up with the rest of the world in terms of the control and directness of subsea fibre optic connectivity.

This challenge appears to be a colonial artefact of the global growth of the Internet as the continent has arguably faced more geographic, political and economic barriers to its development than other regions.  Fortunately, this is about to change; representing a symbolic ‘Africa first’ shift for the continent in terms of its self-determination and autonomy in the telecommunications arena. For countries in sub-Saharan Africa, it presents a massive opportunity to leapfrog other countries. For regions outside of the continent, it will also offer a more efficient, alternative route for burgeoning Internet traffic across the world’s largest continent.

Currently, the West Africa Cable System (WACS) is the most important conduit for data for the West Coast of the continent.  Managed by a 12-member consortium, it provides carrier-level services to operators in Sub-Saharan Africa across a dozen countries, including 12 landing points in Africa and three in Europe (Canary Islands, Portugal and England). Running more than 14,000 km – starting in Yzerfontein (South Africa) to London (UK) – WACS is an essential artery for the digital connectivity and economic development of countries connecting to the cable.

But in order for Internet traffic to travel between Africa and the Americas (the largest centre for the production and aggregation of digital content and services), it must first go through Europe, a rather inefficient route, and one might even say unnecessary if needing to cross the Atlantic ocean.

Three continents interconnected

With the South Atlantic Cable System (SACS) – expected to be completed in 2018 – the first direct link between Africa and South America will be created.  A subsea cable extending more than 6,500 km between Brazil and Angola, SACS will be 100% owned and managed by an African company, Angola Cables.  Combined with Monet*, a cable system to be completed this year and operated by  Angola Cables, Algar Telecom, ANTEL and Google, SACS represents a paradigm shift  for Africa and the Americas in terms of connectivity and collaboration.

Currently, the latency, or the time lag between a data packet being sent and received, on subsea fibre optic cables systems between Angola and Brazil is 350 milliseconds, due to the trafficking of Internet via Europe.  With SACS, this will be reduced fivefold to approximately 63 milliseconds. In effect, this will create a ‘continental shift’ in terms of Internet access to and from Africa, bypassing Europe. Once operational, an African company will be fully responsible for the digital exchange between Africa and the Americas.

Together with growing terrestrial fibre optic systems, mobile technologies and satellite services, such a direct connection between will also improve other countries’ (in the Middle East and Asia, for example), access more parts of the world, either as sources of content or investment destinations for Africa-based data and communications services. Hubs for telecommunications innovation have blossomed on the continent, and with the completion of SACS and Monet, further expansion of data centres and Internet Exchanges Points (IXPs) in Africa is expected.

Beyond Connectivity

Telecommunications and digitalisation are some of the most powerful tools for empowering countries and economies.  If one looks at mobile telephony, it has spread further and faster in Africa than any other part of the world. According to GSMA, a global organisation representing nearly 800 mobile operators and hundreds of mobile technology companies, the doubling of mobile data usage increases annual growth in GDP per person by half a percentage point. Consider some of the following facts about the mobile market in Sub-Saharan Africa:

  • 420 million unique mobile subscribers exist in the region, with an average penetration rate of 43% as of the end of 2016.
  • By 2020, the number of mobile broadband connections will more than double to reach half a billion, nearly two-thirds of the region’s total connections.
  • Smartphone connections have doubled over the past two years to nearly 200 million, accounting for a quarter of mobile connections.
  • Mobile data traffic is forecast to grow twelvefold across Africa as a whole over the next five years.

Sub-Saharan Africa now accounts for nearly a tenth of the global mobile subscriber base and is expected to grow faster than any other region over the next five years. With an improved connection between the Americas and Africa, complemented by a strong mobile industry on the continent, the social and economic development of the regions is expected to improve in line with such growth. Today, mobile connectivity has become the main platform for innovation and the driving force for greater inclusion, with about 270 million people in the region accessing the Internet through mobile devices. Last year, mobile technologies and services generated $110 billion of economic value in Sub-Saharan Africa, equivalent to 7.7% of GDP. As local and global connectivity continue to improve, mobile’s contribution to GDP is expected to increase to $142 billion, equivalent to 8.6% of GDP, by 2020.

Research and Education

The telecoms / mobile ecosystem in the region is attracting talent and investment to African tech companies, as well as linking up academic institutions and research and education (R&E) organisations in other parts of the world. As trans-Atlantic connectivity improves with the completion of SACS and Monet, universities and other learning communities in African, North American and Latin American countries are increasingly collaborating to improve knowledge sharing and research.  Examples include the Florida International University’s Center for Internet Augmented Research and Assessment (CIARA) that recently expanded its development of a next-generation Internet network to include Africa.

With a project called the AmLight Consortium – a multi-institutional project composed of NPOs, universities and regional R&E networks – CIARA promotes the development of advanced network applications, content, and services between the Americas and Africa. Over the next 10 years, the Amlight Consortium will dramatically increase the use of Americas-Africa cable systems for research and education applications, including establishment of a high-performance network link between the AMPATH IXP in Miami, and Angonix, an IXP in Luanda, Angola (owned by Angola Cables). This infrastructure will connect with the Atlantic Wave-Software Defined Exchange in Sao Paulo, Miami, Boca Raton, and Atlanta. The collaboration aims to provide efficient peering between national R&E Networks and communities of interest through a distributed open software define exchange model.

The ongoing development of Africa depends on the degree to which it can globally integrate with the digital economy. With a growing appetite for data and mobile devices requiring broadband connectivity (supported by next-generation international networks), the continent requires investment in its telecommunications capacity in order to support socio-economic advancement. With the imminent launch of a trans-Atlantic cable system between Angola and Brazil, Sub-Saharan Africa is poised for a paradigm shift in connectivity. It will also be a profound and symbolic step toward the continent taking the driver’s seat in expanding the region’s economic opportunities and determining its digital destiny.

Africa News

Africa phones go flat

Africa’s mobile phone market declined 2.1% quarter on quarter in Q3 2018 according to the latest figures from IDC.

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The global technology research and consulting firm newly released Quarterly Mobile Phone Tracker shows overall shipments for the quarter totalled 52.6 million units, with feature phone shipments falling 2.7% QoQ and smartphone shipments declining 1.3% over the same period.

Transsion brands (Tecno, Infinix, and Itel) led the feature phone space in Q3 2018, with a combined unit share of 58.2%. Nokia was next in line with 11.7% share. Transsion, Samsung, and Huawei dominated the smartphone space with respective unit shares of 34.9%, 21.7%, and 10.2%. However, in value terms, Samsung led the smartphone market with 37.2% share, followed by Transsion (21.0%) and Huawei (13.0%).

There were differing fortunes in the region’s three major markets, with Nigeria suffering a heavy 11.6% QoQ decline in mobile phone shipments, while South Africa and Kenya saw respective QoQ growth of 8.5% and 7.9% in Q3 2018.

“The decline in Nigeria stemmed from a slowdown in government spending, ongoing warfare in the country’s northern states, and market uncertainty in the lead up to elections,” says George Mbuthia, a research analyst at IDC. “In South Africa, the market’s growth was spurred by the penetration of low-end devices from brands such as Mobicel, Mint, and Nokia, while the launch of entry-level smartphones helped drive growth in Kenya despite increases in taxes and fuel prices placing a significant burden on disposable income in the country.”

While feature phones remain steadfastly popular across Africa, particularly in more rural areas, consumers are increasingly being attracted by smartphone offerings from Chinese brands such as Xiaomi, Oppo, and Huawei, which are actively targeting feature-oriented customers at more economical price points.

“There is a new wave of Chinese brands aggressively pursuing growth opportunities in the region, while the more-established Huawei is also accelerating its marketing efforts and expanding its distribution budget,” says Ramazan Yavuz, a research manager at IDC. “These brands have quickly progressed along the learning curve and evolved their offerings to perfectly reflect the realities of the region by addressing the diverse pricing and feature needs of the consumer base.”

Looking ahead, IDC expects Africa’s overall mobile phone market to reach 58 million units in Q4 2018, spurred by the festive season and online consumer events such as Black Friday. The introduction of more affordable smartphones in the African market will help drive progress in this space over the coming quarters, while the share of feature phones will decline steadily as the transition to smartphones gathers momentum.

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Africa News

Mobile money to cross borders

Orange and MTN launch pan-African mobile money interoperability to scale up mobile financial services across Africa.

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Two of Africa’s largest mobile operators and mobile money providers, Orange Group and MTN Group, today announced a joint venture, Mowali (mobile wallet interoperability), to enable interoperable payments across the continent. Mowali makes it possible to send money between mobile money accounts issued by any mobile money provider, in real time and at low cost.

Mowali will immediately benefit from the reach of MTN Mobile Money and Orange Money, bringing together over 100 million mobile money accounts and mobile money operations in 22 of sub-Saharan Africa’s 46 markets. Mowali is ready to enable interoperability between digital financial service providers beyond MTN and Orange operations and markets, to support the existing 338 million mobile money accounts in Africa.

Mowali is a digital payment infrastructure that connects financial service providers and customers in one inclusive network. It functions as an industry utility, open to any mobile money provider in Africa, including banks, money transfer operators and other financial service providers.

The objective of Mowali is to increase the usage of mobile money by consumers and merchants.  Mowali enables money to circulate freely between mobile money accounts from any operators in all countries.  From the customer’s point of view, this means “I can pay or receive money anywhere from my mobile account regardless of my operator”. The system will unlock further innovation in the digital financial space within the continent. 

For Stéphane Richard, Chairman & CEO of Orange, “by providing full interoperability between platforms, Mowali will provide an important step forward that will allow mobile money to become a universal means of payment in Africa. Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa, particularly for more isolated communities. This solution embodies Orange’s ambition to be a leading player in the digital transformation of the continent. By joining forces with another of Africa’s market leaders, MTN, we aim to accelerate the pace of this transformation in a way that will change the lives of our customers by providing them with simpler, safer and more advantageous services. “

“One of MTN’s goals is to accelerate the penetration of mobile financial services in Africa, Mowali is one such vehicle that will help us achieve that objective. Furthermore, co-operation and partnerships that help us accelerate the pace of development and overcome some of the scale, scope and complexity of challenges that society faces are key. This partnership with Orange is therefore an important step in helping us play a meaningful role in supporting the United Nations’ Sustainable Development Goals related to eliminating extreme poverty and enhancing socio-economic development in the markets we operate in and beyond. Thus giving our customers access to a bright, digital future.” said Rob Shuter, Group President and CEO of MTN.

The GSMA supports the Mowali initiative as interoperability at this scale is a key accelerator for both financial inclusion and Mobile Money usability across Africa.  “Today, there are over 690 million mobile money accounts around the world. Mobile money services have become an essential, life-changing tool across Africa, providing access to safe and secure financial services but also to energy, health, education and employment opportunities. The creation of Mowali will help to further transform mobile financial services throughout the African region. It demonstrates the mobile industry’s continued leadership and commitment to driving financial inclusion and economic empowerment through industry collaboration. The GSMA is proud to support its development,” said Mats Granryd, Director General, GSMA.

“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome, in support of financial inclusion. With Mowali, Orange and MTN deliver a solution that will enable them, and other companies, to scale digital financial services across Africa, faster, to everyone—including the poor,” said Kosta Peric, deputy director of Financial Services for the Poor, at the Bill & Melinda Gates Foundation “This is a signal that a new wave of innovation, which can help alleviate poverty and drive economic opportunity, is coming. We’re pleased to see an implementation of Mojaloop—an open source payment platform available to operators across the sector—help achieve that.”

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