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Africa - Fixed Broadband Market - Statistics and Analyses

LONDON, Nov. 29, 2016 /PRNewswire/ -- More internet investment needed to sustain Africa's economic growth

The development of the internet market in Africa has been stymied by the poor quality and relative scarcity of the fixed-line infrastructure. As a consequence more than 90% of all internet connections are via mobile networks. However, there is continuing progress being made to increase fixed-line connectivity, both at the backhaul and the local level. Growth is expected to be strong in most markets in coming years, albeit from a low base.

Supported by sympathetic regulatory regimes as also by governments which have come to understand the key functions of broadband connectivity for economic growth, a number of countries have focussed on their fibre-based national broadband plans. There are also a number of countries with active small-scale fibre operators which have concentrated their efforts in wealthy suburbs and business districts.

Taking their cue from policies adopted in Europe and elsewhere, regulators are formulating policies which encourage network sharing and access to ducts, thus facilitating the roll out of networks and reducing deployment costs. Key markets for these developments include South Africa, Kenya, Nigeria, Ghana and Tunisia. In Tunisia the regulator in September 2016 launched a public consultation regarding its plans to introduce measures aimed at sharing and accessing operators' fibre-optic infrastructure. The plans are intended to develop economic and technical conditions for sharing networks which will expedite rollouts by minimising costs. For its part, Tunisie Telecom has partnered with Korea Telecom to develop a 1Gb/s broadband service, while it has also trialled G.fast technology providing data at up to 800Mb/s over short loops.

There is also continuing activity and investment in terrestrial and subsea infrastructure, aimed at providing the necessary backhaul capacity to support fixed-line and, more particularly, mobile data traffic. Increased bandwidth is also helping to reduce broadband pricing for end-users, thus enabling a greater proportion of the population to access services. International bandwidth supply is substantially higher than demand, and there is considerable capacity remaining even without the potential given by future cable upgrades. As such, effort is being concentrated in improving last-mile access. Although this is principally being made via 3G and LTE networks, there is substantial activity with fibre and upgraded DSL infrastructure as well.

On the metro fibre level much regulatory intervention is still required to facilitate access to infrastructure operated by monopolies and to prevent the duplication of fibre ducts on routes connecting city centres with economic hubs.

Key players in the cable sector include Liquid Telecom, which is building a new cable, dubbed Liquid Sea, running 10,000km from South Africa along the east coast, with connectivity to the Middle East and Europe. The cable has a design capacity of 30Tb/s, or about ten times the capacity of existing submarine cables in the region. A consortium including MTN Group, Saudi Telecom Company, Telecom Egypt and Telkom South Africa is also promoting the Africa-1 cable which will run from South Africa to Egypt, with branches to join other cables connecting to Djibouti and the Middle East.

Liquid Telecom also continues to increase its terrestrial network length and capacity, while also investing in local operators. In October 2016 Liquid Telecom and Botswana Power Corporation (BPC) set up a joint venture, Liquid Telecom Botswana, as a new network provider. Liquid Telecom Botswana will lease capacity on BPC's fibre-optic backbone infrastructure and so be better provisioned to support services for its wholesale and business customers.

The region is also on the cusp of further leaps forward as a result of spectrum policies. Governments and regulators are making use of spectrum released from the switch from analogue to digital broadcasting. Those countries which failed to meet the ITU's June 2015 deadline are expected to make progress during 2017, enabling spectrum in the 700MHz band to be repurposed for broadband use and thus driving broadband connectivity deeper into rural areas.

There have also been continuing investments in building local Internet Exchange Points to reduce dependence on international connectivity for local internet services, so lowering the cost of developing local hosting and application development. The African Internet Exchange System, an African Union project implemented by the Internet Society, aims to have 80% of African users' internet traffic exchanged within Africa by 2020.

These developments are encouraging for the future growth of the region's fixed-broadband sector, which will further drive economic progress as well as a range of benefits based on enhanced social inclusion among consumers.

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