The changing face and pace of Africa

 Continual advances in the capacity, speed, geographic reach and reliability of fixed-line and mobile broadband connectivity are fundamentally changing how businesses operate and how individuals go about their daily lives.

Africa has travelled a huge distance in a very short time, and connectivity continues to improve in what Informa Telecoms & Media say has recently become the second best connected region, in terms of mobile subscription count, in the world – ahead of Western Europe and the Americas. The upshot for Africans and businesses operating in Africa, is that valuable online business and personal applications – such as mobile banking, social networks (including Facebook, Twitter and YouTube), business networking, information security and cloud computing – are becoming increasingly available.

However, just a few years ago the situation was fundamentally different. Poor international and terrestrial connectivity restricted the effectiveness and efficiency of businesses: new communications technologies such as video-conferencing and real-time information sharing were unavailable – even emails with attachments couldn’t get through, online networking was all but non-existent and business expansion into new geographies was fraught with difficulty.

Meanwhile, slow, high-cost, geographically-limited and unreliable Internet and mobile access served to isolate Africans from the information, functionality and data services available with high-quality connectivity. Handset prices were also beyond the reach of most Africans.

The communications landscape in Africa has changed dramatically in the last couple of years, with significant investments in high-capacity fibre-optic submarine cables and terrestrial networks dramatically  improving connectivity into, out of and within the continent.

New submarine cables boost international connectivity

Eighteen months ago, the 10,000km EASSy (East African Submarine System) cable went live, bringing unprecedented bandwidth and international connectivity to some 20 countries in Eastern and Southern Africa – from South Africa to Sudan. At 4.72 Terabits per second, EASSy is the largest system currently serving Africa and represents two-thirds of the international submarine cable capacity available to sub-Saharan Africa.

Investment in new, high-capacity fibre-optic submarine cables linking Africa to the rest of the world continues apace. During 2012, more submarine cables are scheduled to go live – including WACS along the Western seaboard and EIG providing connectivity to Europe. These two systems alone will provide almost 10Tbps of additional capacity to and from the continent.

By investing in EASSy, WACS and EIG, WIOCC is creating a unique high-capacity ring around Africa, connected to Europe, enabling it to offer African and international telcos and internet service providers high-quality, reliable international connectivity at an affordable price.

Terrestrial network growth

The arrival and subsequent growth in international capacity has acted as a strong catalyst for national operators to grow and enhance their own terrestrial networks.

Hamilton Research Limited recently reported a 15% increase in Africa’s total inventory of terrestrial transmission networks over the last 12 months, which by the end of Q3 2011 had reached 676,739 route-kms. Laid end-to-end, that is enough network infrastructure to wrap around the earth almost 17 times.

Over the last year, an average of 138 route-kms of new African fibre-optic network entered service every day, and 2012 should see continuous interconnected terrestrial fibre running from Cape Town to Cairo.

WIOCC’s shareholders – 14 telcos from across Africa – are major contributors to this terrestrial expansion, rolling out and interconnecting high-capacity fibre-optic networks to carry mobile and fixed-line voice, data and internet traffic domestically, between neighbouring countries and internationally.

Population Within Reach Of A Terrestrial Fibre Node, Sub-Saharan Africa 2010 – 2011

Source: Hamilton Research.

There is no sign of any slowdown in the growth of terrestrial networks. On the contrary, the forward inventory of networks in Africa under deployment, being planned or proposed is increasing.

Improvement in terrestrial connectivity, and the benefits it brings, is set to increase at an even faster rate than previously. Across Africa there is now twice as much fibre under deployment than two years ago – according to Hamilton Research, 62,255.5km in September 2011, compared to 31,687.7km in September 2009.

A faster, slicker and more modern Africa

The explosion in fibre reach is bringing high-capacity national and international fibre backbone networks to dozens of new towns and cities for the first time, significantly increasing the number of people in Africa with access to broadband networks and the myriad of services they can carry.

At the same time, existing terrestrial networks are being upgraded to improve reliability and data-carrying capacity, in order to meet the greater needs and raised expectations of end-users and satisfy the demands of an expanding wholesale market.

It is no surprise that businesses in Africa and African consumers are flourishing in this fertile environment of increased network reach, enhanced data speeds and network capacity, improved Internet reliability and greater affordability.

The new-found improved connectivity has a multitude of benefits. International investment into African markets and companies is continuing, governments are competing to position their countries as hubs for outsourcing operations, and web-based business is growing fast. It is bringing a growing range of innovative, popular and useful applications to the fingertips of an increasing number of African consumers and businesses. Mobile banking (very successfully introduced in Kenya under the brand name of M-PESA and a field where Africa leads the world), e-wallet services, online bookings and payments, and popular networking sites such as Twitter, Facebook, YouTube, Spotify and LinkedIn, are all now available to many at the touch of a button.

Businesses are using online services to improve their efficiency and are now able to cost-effectively extend operations to satellite offices. eGovernment initiatives are changing the delivery of public services. The Kenyan government has introduced an online company registration system, dramatically cutting waiting times, and in 2011, Rwanda was recognised for its efforts to give rural citizens access to information on healthcare, food prices and crop prices.

However, the benefits are not yet universally available. Other initiatives are taking the internet to those who remain unable, for reasons of price, coverage or knowledge, to take advantage. Mobile service provider and WIOCC shareholder, Zantel has recently launched an internet cafe franchise in Tanzania as part of its corporate social responsibility programme. The initiative offers free computer and internet training and access to a growing number of rural communities and young people across the country. Internet buses, which take internet access to underserved rural communities, are an alternative or supplementary approach being implemented in some markets.

What next?

Fixed and mobile broadband markets in Africa are on an extended journey and will continue to evolve, as will the growing number of services accessible with this revolution in connectivity.

To facilitate this growth, bandwidth demands will continue to rise sharply - inexorably linked as they are to the increasing number and sophistication of connectivity-enabled, data-rich business and domestic applications. Network diversity is also increasingly important, with uptime and high-quality service delivery vital for differentiation in competitive markets.

With handset prices falling and smartphones becoming increasingly available over the next couple of years (Informa expects there to be 127 million smartphones in Africa by 2015), the business, music, entertainment, social networking, financial services and media sectors in Africa are all set to experience further significant change as connectivity continues to improve.

After five consecutive years of close to 20% growth in the number of mobile subscribers, Africa is the fastest-growing mobile market in the world. However, with a mobile penetration of 649 million subscribers (equivalent to a 65% penetration rate) in the fourth quarter of 2011, there is still plenty of scope for significant further growth. The GSM Association predicts there will be more than 735 million subscribers by the end of 2012 and that at the end of 2016 Africa will have a mobile penetration rate of 86.92%.

Better, faster and cheaper

With high-quality international and terrestrial fibre-optic connectivity now available, and the continent’s communications infrastructure continuing to improve – driving better, faster and cheaper broadband access - the future for businesses and individuals in Africa is bright.

Chris Wood, CEO of Africa's carriers' carrier WIOCC