Professional Documents
Culture Documents
TELECOMMUNICATION/ICT
MARKETS AND TRENDS
IN AFRICA
2007
2007 ITU
International Telecommunication Union
Place des Nations
CH-1211 Geneva Switzerland
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transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without prior permission of the International Telecommunication Union.
Denominations and classifications employed in this publication do not imply any opinion on the part of the
International Telecommunication Union concerning the legal or other status of any territory or any
endorsement or acceptance of any boundary. Where the designation country appears in this publication, it
covers countries and territories.
PREFACE
During the World Summit on the Information Society Development Agenda, because it enables people
(WSIS), governments and world leaders agreed on to achieve development goals such as universal
the need to work towards bridging the digital divide primary education, gender equality or
to build a people-centered, inclusive and environmental sustainability.
development-oriented Information Society, where
everyone can create, access, utilize and share Connect Africa, part of ITUs Connect the World
information and knowledge, enabling individuals, initiative, seeks to help assess the current situation,
communities and peoples to achieve their full trends, challenges and opportunities of the
potential in promoting their sustainable development telecommunication/ICT market in Africa.
and improving their quality of life, premised on the
purposes and principles of the Charter of the United ITU has been measuring the development of the
Nations and respecting fully and upholding the Information Society for many decades by collecting
Universal Declaration of Human Rights.1 data in cooperation with its Member States and
partner institutions. Besides highlighting the need
Together with some other UN agencies, ITU was to connect the least connected region of the world,
nominated as leading facilitator for several action lines this report seeks to help governments, the private
at the WSIS in Tunis in 2005. Within its mandate, sector, civil society and the international
ITU launched the Connect the World2 initiative in development community to take informed policy
2006. Connect the World is a multi-stakeholder effort, decisions.
established within the context of the WSIS to
encourage new projects and partnerships to bridge This report provides a comparative analysis of the
the digital divide. By showcasing development efforts development of the African telecommunication/ICT
which are now underway and by identifying areas market. In this regard, trends in main (fixed)
where needs are the most pressing, Connect the World telephone lines, Internet, broadband and mobile
will generate the momentum to connect the cellular services are examined, as well as
unconnected by 2015. privatization and investment conditions. The report
points out the challenges of the African
Connecting the unconnected is not an end in itself, telecommunication market, as well as the need for
but an important contribution to the UN Millennium coordinated action.
1
Geneva Declaration of Principles (2003): http://www.itu.int/wsis/documents.
2
ITU: http://www.itu.int/partners/index.html.
iii
This report has been prepared by the Market Information and Statistics Unit (STAT) of the ITUs Development Sector. The
designations employed and the presentation of country or area names in this report do not imply the expression of any opinion
whatsoever on the part of the International Telecommunication Union concerning the legal status of any country, territory, city or
area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The views expressed in this report are those
of the authors and do not necessarily reflect the opinions of ITU or its membership.
CONTENTS
PREFACE........................................................................................................................................................ iii
1. OVERVIEW ............................................................................................................................................... 1
ANNEX 1 ........................................................................................................................................................ 25
v
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
1. OVERVIEW
In 2006, world population amounted to 6.6 billion distribution of wealth is rather uneven between
inhabitants, of whom 923 million lived in Africa. countries. Out of a total of 54 African economies,
Africa was the second most populated region after South Africa alone accounted for a GDP of
Asia, with 3.9 billion inhabitants. 240 billion USD, 25 percent of Africas total GDP.
The GDP per capita of the region stood at 1079 USD
Although Africa has a share of around 14 percent of in 2006, compared to 3197 USD in Asia and
the worlds population, it accounted for little over 19358 USD in the Americas.
two percent of the worlds Gross Domestic Product
(GDP) in 2006 (Figure 1.1). While the global GDP With regards to access to Information and
amounted to 48800 billion USD, Africa accounted Communication Technologies (ICTs), Africa is lacking
for a GDP of 996 billion USD1. Within Africa, the in investment-intensive infrastructure, such as main
Broadband
subscribers
Internet
users
Mobile cellular
subscribers
Main (fixed)
telephone lines
GDP
Population
1
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
(fixed) telephone lines and fixed broadband. While communication. Mobile cellular technology has a
there were 1270 million main (fixed) telephone lines higher coverage rate in the region. Cheaper
worldwide in 2006, less than two percent of these were infrastructure and larger regional penetration,
located in Africa, while Asia for instance had a share cheaper handsets, competitive markets and business
of 48 percent (Figure 1.1). Obviously, Africa has still models oriented to the needs of the poorer segments
great potential to improve its telecommunications of the population, such as affordable prepaid cards,
usage and infrastructure deployment. have resulted in a mobile boom in Africa during
the last decade. Nevertheless, the share of Africa
Also due to prohibitively high tariffs and limited with 7.2 percent of the worldwide 2.7 billion mobile
computer literacy, the number of broadband subscribers shows still a lot of potential growth
subscribers in Africa is rather small. While the world (Figure 1.1). Africa already experienced a
saw 281 million broadband subscribers by the end of significant yearly growth of mobile penetration.
2006, one million, less than 0.4 percent, had While Africa had 198 million mobile cellular
subscribed in Africa (Figure 1.1). Since broadband subscribers in 2006, Asia had 1137 million, Europe
access is a major tool for e-government as well as 768 million and the Americas 558 million
e-commerce, this is a striking indicator for Africas subscribers respectively. Nevertheless, the African
future development. Broadband access has spread mobile market is still far away from saturation
rapidly in Asia, where 104 million persons signed up while the trend in several countries in the world is
for high-speed Internet access, followed by Europe towards a second mobile per person. In 2006, Africa
and the Americas with 89 and 80 million subscribers had a penetration of mobile cellular subscribers per
respectively. Regarding its share of the worlds 100 inhabitants of 22.0, the Americas of 62.0, Asia
population, Oceania with 4.5 million subscribers was of 29.3, Europe of 94.3 and Oceania of 72.6.
quite well connected.
Obviously, the African telecommunication market
In 2006, Africa had an estimated number of Internet has just begun its rise. As the mobile boom has
users of 44 million or 3.8 percent of the worlds already proven, Africa has a strong demand for
1.1 billion Internet users (Figure 1.1). The share of ICTs. This demand needs to be satisfied in order to
Africas Internet users is higher than its share of main insure the vital participation of Africans in the
(fixed) telephone lines and broadband subscriptions, Information Society. Nowadays, it is broadly
due to the popularity of public access points or cyber understood that access to ICT can contribute
cafs. This is particularly true for rural areas and tremendously to economic development. To create
villages, where the connectivity goals of the WSIS access to ICT is a major challenge to African and
are more difficult to meet (Box 3.1.2). foreign governments, the private sector and civil
society. Regarding the advantaged of mobile
Slow growth in main (fixed) lines leads Africans technologies, Africas ICT/telecommunication
to use mobile cellular phones as means of future will likely be wireless.
1
Source: ITU World Telecommunication/ICT Indicators (WTI) Database.
2
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
2. REGULATORY ENVIRONMENT
Private and state-owned main fixed Private and state-owned main fixed line
line operators, world, 1995-2007 operators, Africa, 1995-2007
160 60 Private
Private Private operators
State-owned outnumber
State-owned state-owned
120 for the first
40 time
80
20
40
0 0
1995 1999 2001 2005 2007 1995 1999 2001 2005 2007
3
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Figure 2.2.1: Level of competition in main (fixed) line, mobile and Internet services
Distribution of monopolies for local main (fixed) line services by region in 2006 (top left), level of competition in local
main (fixed) line services by region in 2006 (top right), level of competition in main (fixed) line, mobile and Internet
services in Africa, 2006 (bottom left) and level of competition in Sub-Saharan Africa, 2006 (bottom right)
Distribution of monopolies in local main (fixed) Level of competition in local main (fixed)
line services, world, 2006 line services, world, 2006
100%
Europe Oceania
7% 14%
Asia 80%
23%
60%
40%
Full competition
20% Partial competition
Africa Monopoly
Americas 37% 0%
19% Oceania Africa Americas Asia Europe
Main Main
(fixed) line (fixed) line 51.1 24.4 24.4
local services 55.3 23.5 25.5 local services
Percentage Percentage
Monopoly Partial competition Full competition Monopoly Partial competition Full competition
worlds fixed line monopolies (Figure 2.2.1, top left). markets and 12.5 percent of the Internet markets are
Fixed line telephony is the least competitive voice under the monopoly of one operator (Figure 2.2.1,
service is Africa, while the African mobile market, bottom right). With 48.8 percent of its cellular mobile
facing fewer state-owned incumbents from the start, markets, Sub-Saharan Africa has achieved a higher
is often in private hands, with 93.3 percent of the level of privatization than Africa as a whole.
economies having achieved partial or full competition
(Figure 2.1.1, top right). 2.3 Regulatory environment
The Internet market is the most competitive one in The telecommunication market and the customers
Africa, with 68.6 percent of the economies allowing usually profit from competition, as the example of
full competition and another 11.8 percent partial Morocco shows (Box 2.2.2). In order to create and
competition (Figure 2.2.1, bottom left). Within Africa, keep competition in the telecommunication market
the largest number of monopolies is found in Sub- functioning, a sound regulatory environment needs
Saharan Africa where 51.1 percent of the fixed line to be established, usually with an independent
4
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
20
10
0
1990 1992 1994 1996 1998 2000 2002 2004 2006
Traditionally in Morocco, almost all public telecommunication of the incumbent Morocco Telecom (IAM) in 2004. While the
infrastructures have been controlled by the government. Until mobile market was already liberalized in 1999 with the market
the late 1990s, Morocco was, like many other countries, a entry of Meditel competing with the larger Maroc Telecom,
monopolistic telecommunication market. The state-owned the fixed-line market is still dominated by Maroc Telecom,
incumbent National Office of Post and Telecommunications even though the second mobile operator is allowed to operate
(NOPT) was unable to satisfy the increasing demand for its own international gateway.5
services. Besides the bad quality of telephone services, millions
of applicants had to wait for a telephone line to be installed As the graph above indicates, mobile and Internet technologies
for up to 80 months. Additionally, the cost of telephone services that were provided by privatized operators acting under
was very high.3 competition have enjoyed the greatest uptake by the
Moroccans. In May 2006, Meditel was granted a licence to
In 1997, the Moroccan parliament adopted the Post Office offer fixed-wireless services.6 Limited wireless in the local
Telecommunication Act and some related laws, which opened loop (WLL) services offer Meditel and the new third Operator
the way for the foundation of the National Telecommunication Wana (under the brand name Bayn) the opportunity to compete
Regulation Agency (ANRT) in 1998. This agency was directly with Maroc Telecom in the fixed line market.
appointed in charge of the introduction of competition through
transparent tenders and regulation policy. One of the major Customers usually profit from privatization and the creation
achievements of this regulatory authority has been its of competition through lower prices, better quality of services
outstanding dispute settling mechanism avoiding costly and and openness for innovation in a regulated telecommunications
time-consuming conflicts.4 market. In Morocco, privatization and liberalization has
accompanied increases in mobile and Internet penetration rate.
In 2000, the French global media company Vivendi Universal With competition recently introduced, the penetration of main
bought its first 35 percent equity stake and another 16 percent (fixed) line services could also improve.
regulatory authority. In mid-2007, 148 ITU member order to exchange its experiences and ideas on new
countries had a regulatory authority (Figure 2.3.1, emerging issues, such as 3G/4G, VoIP, NGN or
right). By mid-2007, 83 percent of the African CyberSecurity. The ICT environment is changing
economies had established such an authority rapidly, and keeping the policy and regulatory
(Figure 2.3.1, left). frameworks in line with the constant evolution of
technologies, applications and services is a
Although the number of African authorities is quite challenge for governments and regulators around
impressive, the staff of a well-functioning regulatory the world. In order to support regulatory authorities
authority needs to be well educated, trained and in Africa, ITU carries out projects with strong
networked with colleagues from other countries in partners (Box 2.3.2).
5
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Europe 85%
43
Africa 83%
14
ITU has catalyzed the development of harmonized ICT approaches to spectrum management, competition policy, inter-
regulatory guidance together with the ECOWAS member states connectivity tariffs, infrastructure sharing and licence fees. The
addressing challenges and providing an ICT-enabling guidelines advise the operators to ensure national and
environment for the region. ECOWAS Member States will international roaming at rates that are competitive and affordable.
embark on the challenge of translating these decisions into their The liberalization of the regional telecommunications market is
national legal frameworks and the creation of a common ICT crucial to the realization of West Africas aspiration for the
market in the region by end of 2007. These guidelines advise deployment of regional broadband infrastructure, as well as
the legislative framework for ICT in Member States, recommend regional roaming and cross-border connectivity.
1
Allafrica.com (Kwamboka, Evelyn), Kenya - MPs Move to Court to Block Safaricom IPO, 25 September 2007.
2
Allafrica.com (Mmegi), Botswana - BTC Social Responsibility Commendable, 4. September 2007; Developing
Telecoms (Alec Barton), Botswana privatises nearly half its telecoms company, 03 August 2006.
3
Ibrahine, Mohammed, Towards a national telecommunications strategy in Morocco, December 2003.
4
ITU/infoDev, Regulation Toolkit, http://www.ictregulationtoolkit.org/en/index.html.
5
Ibrahine, Mohammed, Towards a national telecommunications strategy in Morocco, December 2003; Global
Technology Forum: Morocco - A lesson in competition, 10 August 2007.
6
Global Technology Forum, Morocco - A lesson in competition, 10 August 2007.
6
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
3. MARKET SEGMENTS
Figure 3.1.1: Main (fixed) telephone lines growth limited to urban areas and South and North Africa
Distribution of main (fixed) telephone lines by region (top left), main (fixed) telephone lines per 100 inhabitants
by region, 1996-2006 (top right), main (fixed) telephone lines in urban and rural areas in Tunisia (bottom left)
and distribution of main (fixed) telephone lines in Africa, 2006 (bottom right)
Main (fixed) telephone lines, world, 2006 Main (fixed) telephone lines per
100 inhabitants, world, 1996-2006
50
Africa Oceania Europe
Oceania 40
2%
Europe 1% Americas
26%
23% 30
% Americas
20
World
Asia
48% 10
Asia Africa
0
1996 1998 2000 2002 2004 2006
Main (fixed) telephone lines in urban Distribution of mail (fixed) telephone lines,
and rural areas, Tunisia Africa, 2006
100 14 30000
Penetration
12 25000 Rest Africa
80
10 Tunisia
20000 South
60 8 Africa
% Nigeria
15000 Morocco
40 In urban areas 6
In rural areas
4 10000
Egypt
20
2 5000
0 0 Algeria
0
2000 2002 2004 2006
7
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
3.1 The fixed line market account for almost 80 percent of all fixed lines in
Africa (Figure 3.1.1, bottom right).
With 28.5 million main (fixed) telephone lines in 2006,
Africa had a share of two percent in worldwide total Those main (fixed) telephone lines are almost
main (fixed) telephone lines (Figure 3.1.1, top left). exclusively located within cities and randomly in rural
Africa experienced strong growth in the number of areas, as the example of Tunisia shows (Figure 3.1.1,
main (fixed) telephone lines of 6.2 per cent over the bottom left). Generally, Africas main (fixed) telephone
period 2001 to 2006, only topped by Asia with line penetration was 3.1 per 100 inhabitants compared
9.7 percent (Figure 3.1.1, top right). to 32.4 main (fixed) lines per 100 inhabitants in Americas
or 39.7 in Europe (Figure 3.1.1, top right). The world
Most of Africas main (fixed) telephone lines are average in 2006 was 19.4 main (fixed) lines per 100
concentrated in just six of its 54 economies. Algeria, inhabitants, more than six times higher than the
Egypt, Morocco, Nigeria, South Africa and Tunisia penetration rate of Africa.
While teledensity in Africa and especially in Sub-Saharan For mobile cellular penetration, the picture looks much better.
Africa is rather low, teledensity in rural areas is particular It is estimated that 45 percent of Sub-Saharan African villages
limited (Figure 3.1.1, bottom left). The gap between urban were covered by a mobile signal2 in 2006 (Figure below, left).
and rural areas in terms of telecommunication access is Coverage with a mobile signal does not mean connectivity.
significant because many people are living in rural areas. It is Nevertheless, with initiatives such as applying the
estimated that in Sub-Saharan Africa nearly two-thirds of the GrameenPhone model in Uganda to legal license obligations
population resided in rural areas in 2004. to establish public facilities in South Africa, African
governments and companies have proved quite successful in
WSIS set a target to connect the villages by 2015. Measuring bringing mobile cellular phones to rural areas.
the current situation of villages in order to undertake focused
actions depends largely on the definition of the object of Primarily as a result of mobile competition and despite
interest. Based on national definitions of rural areas according numerous barriers, a number of African countries are
to official data, geo-coded information and approximations, it approaching full universal access or near coverage of all
is estimated there were around 400000 localities1 in Sub- inhabited rural areas with a mobile signal. Countries with
Saharan Africa, of which 99 percent are villages. Less than mobile rural population coverage over 90 percent includes
three percent of these have currently a (fixed line) telephone Comoros, Kenya, Malawi, Mauritius, Seychelles, South Africa
connection and less than 0.4 percent of the villages have access and Uganda, which should meet the WSIS target of village
to Internet in Public Access Centres (PIAC) (Figure below, connectivity ahead of schedule. Other countries on the way to
left). Accordingly, it is estimated that 55 percent of village meeting the WSIS target before the end of the decade include
population are unconnected without access to fixed, mobile Botswana, Burkina Faso, Burundi, Cape Verde, Guinea,
and/or data services. Although many African countries have Namibia, Rwanda, Senegal, Swaziland and Togo all of which
some type of universal service program for connecting rural have rural mobile population coverage rates in excess of
areas, they have for the most part, not proven very successful. 50 percent.
8
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Mobile cellular subscribers (000s), world, 2001-2006 Mobile cellular subscribers (000s), Africa, 2001-2006
1200000
Asia 200000
Sub-Saharan Africa
160000
Europe South Africa
800000
120000 North Africa
80000
400000
Americas Africa 40000
Oceania
0 0
2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006
Swaziland
Gambia
Morocco
Gabon
Botswana 40%
Libya
Tunisia
Mauritius
Seychelles 0%
Africa Asia Oceania
0 20 40 60 80 100 120 Americas Europe World
9
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
3.2 The mobile cellular market (fixed) telephone lines but due to cellular subscriptions
(Figure 3.2.1, bottom left). In 2006, the Seychelles
The African mobile cellular market is known for its was the first African countries that passed the
impressive growth rates. The development of mobile 100 percent total (fixed and mobile) penetration rate,
telephony in Africa is an ongoing success story. During meaning that at least statistically every person on the
2006 Africa added another 55.3 million mobile cellular islands had signed up for a phone connection or bought
subscribers to its subscriber base (Figure 3.2.1, top left). a SIM card. According to the observation that in Africa
Within Africa, North and especially Sub-Saharan Africa the mobile cellular subscription is higher than the main
were able to add the largest number of new subscribers (fixed) telephone line subscription, Africa is the only
(Figure 3.2.1, top right). Africa achieved the impressive region where more revenues were generated from
growth rate of 46.2 percent of the mobile subscriber mobile services than from fixed line services
between 2001 and 2005. Accordingly, by end 2006, (Figure 3.2.1, bottom right).
mobile penetration in Africa was at 22.0 subscribers per
100 inhabitants while Asia had 29.3, the Americas 61.9, Table 3.2.2 shows that Vodacom South Africa and
Oceania 72.7 and Europe a penetration rate of 94.3 MTN South Africa lead Africa in regards of numbers
(Figure 1.1). Likely, the mobile boom in Africa will of mobile cellular subscribers, with 21.8 and
continue while in other world regions the growth seems 12.5 million subscribers in 2006. MTN Nigeria shows
to slow down probably due to almost saturated markets an impressive and continuous growth rate of
like for instance in Europe and the Americas. 46.7 percent between end 2005 and end 2006. If MTN
Nigeria is capable of continuing such high growth rate
Considering the 15 African countries with the highest recorded during 2004 to 2005, it might challenge other
penetration rate of telephone (fixed and mobile) established players. Innovative business models such
services per 100 inhabitants, it becomes obvious that as the cross-border roaming free services of Celtel
most of their success is not due to the spread of main (Box 3.2.3) could transform these rankings as well.
Note: * For 2005, the subscriber figure of the former company Vmobile reflects the value of May 2006. As the original revenue covered seven
months, the five months revenue of Vmobile has been included. 2005 revenue has been estimated taking into account the Vmobiles five
months revenue.
Source: ITU based on company annual reports.
10
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Box 3.2.3: Celtel abolishes cross-border roaming charges in Eastern and Central Africa
While the Commission of the European Union Customers cannot only receive calls from
(EU) recently decided to limit cross-border their countries without roaming charge, but
roaming charges, Africa is one example of they can also use recharging cards bought in
innovative business models and regulation in any of those countries. Nevertheless, there
this respect. is still room to create further market
integration. It still costs twice as much money
Celtel launched the One Network in September to call for example a Celtel customer in
2006. Under this initiative, Celtel offers its Tanzania or to send an SMS from a Ugandan
customers in Uganda, Kenya and Tanzania the mobile phone in Tanzania.
opportunity to use their mobile phone in all
three countries under the same conditions as Obviously Celtels model is considered
in their home country without charging any attractive and possibly successful by its
roaming fee. After this model had worked well, competitors and has already caused some
Celtel expanded its offer to Congo, Gabon and pressure on them. MTN is offering a similar
the Democratic Republic of Congo in 2007. plan in nine countries by the end of
By the end of 2007, 15 countries should be September 2007.
part of the One Network plan.
With the abolition of cross-border roaming charges, cellular subscribers and will probably exceed
Celtel has responded to the particular needs in Africa, 278 million subscribers by end 2007. In order to
where often strong cross-border relationships exist. acquire new customers, new needs will have to be
It is well-known that low subscription prices, prepaid satisfied or, more likely for the lower income
services and low recharging cards have contributed countries, new business models need to be found or
to the African mobile boom3. Particularly in Africa, scaled up.
prepaid subscriptions accounted for the majority of
all mobile cellular market in 2006 (Figure 3.2.4, right). Figure 3.2.4 (left), shows the number of potential
In 2006, Africa had reached to 198 million mobile customers is smaller. Customers earning more than
Postpaid
subscribers
8%
Prepaid
subscribers
92%
Source: Left: Nokia, Granath, Rauno, Voice services in new growth markets, presentation to the ITU Workshop on the Future of Voice
(15-16 January 2007), Geneva.
Right: ITU World Telecommunication/ICT Indicators (WTI) Database.
11
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
40 USD per day are can afford to use postpaid offers or phone-sharing to reach the customers
mobile services, because they are able to pay at lower levels of the pyramid. ARPU for lower
regular bill. Lower income groups living on four end-costumers may be smaller but the market
to 40 USD per day are usually less likely to pay larger. Accordingly, it is possible to make a
a monthly subscription fee. Prepaid business lucrative business even in these segments on a
models enable companies to offer their services large scale, since the demand for communication
to these persons, without large financial risk. technologies is not limited to wealthier
Average Revenue per User (ARPU) is higher in customers. The deployment of more extensive
the upper customer segment of the pyramid and national and regional fiber backbones and the
easier to predict, so companies serve these direction of less mobile cellular traffic via
customers first to saturation. In order to open up expensive satellite-backbone based services
new markets, companies have to develop new could open room to further price reductions
business models, such as even cheaper prepaid (Box 3.4.2).
Internet subscribers, world, 2006 Internet subscribers and users, world, 2006
40 37.0 35.7
29.3
20 15.2 17.4
11.4 11.6
4.8 6.7
4.8
1.3
Asia 0
43.2% Africa Americas Asia Europe Oceania World
Seychelles
Morocco 19.9 35.7
S. Tom & Principe 18.1
Mauritius 14.5
Tunisia 12.7
South Africa 10.8
Sudan 9.5
Zimbabwe 9.3
Benin 8.0
Egypt 8.0
Kenya 7.9
Algeria 7.4
Cape Verde 6.1
Nigeria 6.0
Gabon 5.8
0 5 10 15 20 25 30 35
12
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
13
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
North Africa
60
Sub-Saharan Africa
50 South Africa Oceania Africa
2% 0%
40
SSA with
30 0.01 still Europe Americas
a lot of 32% 29%
20
potential
10 Asia
37%
0
Broadband As % of Internet Subcribers per
subscribers subscribers 1000 inhabitants
(0000s)
Expanding access to broadband services is a challenge New, cost-effective and flexible standards for
and a chance for Africa to benefit of the Information wireless technologies such as WiMAX
Society. Therefore the establishment of access to the (IEEE802.16).
global backbones will be crucial for the development
of Africas telecommunication markets as well as to Providers, possibly also local champions, can offer
other sectors (Box 3.4.2). broadband services to geographically challenging
areas.
3.4.2 Broadband wireless deployment:
A solution for Africa Public service applications, such as e-government
Since Africa is lacking fixed line infrastructure, or e-learning, can be used via these technologies.
wireless access is considered a solution to bridge the Further, many models of financing these services
digital divide. However, neither 2 G nor 2.5 G (GSM/ are possible: local municipality could enter into
GPRS) have fulfilled these high hopes, due to rather partnerships with business owners; wealthier users
expensive handsets, their focus on voice transmission might be charged more for the use than poorer
and regulators hesitation to license UMTS. Instead, neighbourhoods, or free public access points could
high hopes are set on broadband wireless access be established all over the city
(BWA) on the basis of WiMAX. As Figure 3.4.4
shows, companies expect the growth of revenues in Companies can easily observe and direct their
data services to continue growing worldwide. production-chain and do e-business.
Broadband wireless access is defined as offering With the support of global players such as Intel, it
instantaneous bandwidth greater than 1 MHz and appears that the WiMAX standard could become
supporting data rates greater than 1.5 Mbit/s6. This dominant. The technical challenges of interoperability
means a user could have the same speed of data and quality of service (QoS) provisions and often
transfer as with fixed broadband access through, for insufficient spectrum management could surely been
instance, cable or ADSL. Broadband wireless access overcome since WiMAX has already addressed the
could in both the licensed and the unlicensed band be security concerns and Line in Sight thematic of Wi-
deployed for wireless metro access, last-mile/first-mile Fi. The IMT-2000 and IMT-Advanced standard is
and large area coverage. There are several advantages currently being discussed by the ITU World Radio
of broadband wireless access: Communication Conference and may be selected by
14
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Currently 85 percent of international bandwidth traffic in Africa through its open access policy towards service providers.
is directed via Europe to its final destination. Access to the global EASSy could reduce the wholesale and therefore the retail
backbone is vital for the development of this region. By mid- prices of Internet access tremendously. Already a reduction in
2007, there were four major undersea cable projects engaged the price of international telecommunication services by ten
in the race for the first fibre-optic link connecting the African percent would benefit consumers by more than 2.5 billion
eastern seaboard to the rest of the worlds backbones. According USD, according to the consertium.
to a study by the NEPAD e-Africa Commission in 2004, Africa
is lacking of 52040 km necessary backbone infrastructure: The bandwidth prices of the West African cable SAT3 are slowly
15950 km in Central, 2200 km in Northern, 19330 km in falling. This is probably a reaction to the expected competition
Western and 145060 km in Eastern and Southern Africa. from EASSy or the other cable initiatives. EASSy should connect
later also the land locked countries via land loops and might
One of these initiatives intents to deploy the East African attract former SAT3 customers. Nevertheless, the success of the
Submarine Cable System (EASSy): Six Development Finance project will depend largely on political decisions, such as South
Institutions (DFIs) are providing support to the collaboration Africas intention to allow cables to land on its coast only if
of other global and regional development institutions, the they are owned by an African company. 2007 and 2008 will
governments and the 26 mainly African operators. The total show which of the redundant initiatives will make the race.
cost of construction is estimated at 235 million USD. The cable Whatever consortium will finally build the connection, these
is expected to be in operation by 2009. This initiative intends competing initiatives show that investing in African ICT
to provide access to the 260 million Africans in the region infrastructure is attractive and Africa offers a viable market place.
15
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Smart
phone
Feature
Voice phone
phone
Source: Adjusted from WiMAX Forum (Presentation by Chang, Dean S.K.) (2006): Mobile WiMAX: Mobile Internet Ready for Global
Deployment, http://www.itu.int/osg/spu/ni/voice/presentations/S5-5-WiMAX-CHANG.ppt.
the ITU membership by July 2009.7 Recently, the electronic access to government services. The plan is
conference approved WiMAX as 3G communication to install Internet connectivity in some 200 locations.
standard. This means that companies holding a 3G From there, access will be extended to more remote
licence can now provide WiMAX services. rural areas through kiosks that will offer wireless
connectivity back to the main centres.9
Broadband wireless access will not only challenge
the regulators, but also service providers. It will likely Wireless connectivity includes both WiMAX and 3G
transform the current landscape of telecommunication technologies such as EDGE and EV-DO: Horizon
companies: New Wireless Internet Service Providers Wireless launched a 3.5 GHz broadband wireless
(WISP) could emerge from among current mobile network in Nigeria;10 just recently Warid Telecom
operators and Internet Service Providers (ISP). Uganda selected Motorola to deploy a WiMAX
network after it already made experiences deploying
Probably, just like mobile cellular technologies, such a network in Pakistan11, MTN Rwanda also is
broadband wireless will first be deployed on a large going to establish broadband wireless access with the
scale in North America, Europe, the Far East and Asia service of Cambridge Broadband Networks in its
before it becomes available in Africa. The one billion capital, Kigali.
mobile broadband users Juniper Research forecasts
by 2012 are expected in these regions and not in Sub- Beyond the excitement about the opportunities
Saharan Africa.8 broadband wireless access offers, it should be noted
that also last mile wireless solutions rely on strong
Nevertheless, some pioneer activities are already fixed infrastructure. There is no alternative for
underway in well populated African areas: In Kenya, connecting Africa to the global backbones and to
the Government is developing a Digital Village increase the number of national and local Internet
Scheme in order to provide rural inhabitants with Exchange Points (IXPs).
16
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
1
Localities refer to a countrys villages, towns and cities.
2
According to ITU, population covered by a mobile cellular network is the percentage of the total population that
lives within the range of a mobile cellular signal, irrespective of whether or not they are subscribers.
3
Bertolini, Romeo; Olaf, Nielinger; Muylkens, Monika, Market in Transition, D+Z, volume 12,
http://www.inwent.org/E+Z/content/archive-eng/12-2006/tribune_art3.html, 2006.
4
ITU World Telecommunication Regulatory Database.
5
Tour, Hamadoun I. (2007), Competitiveness and Information and Communication Technologies (ICTs) in Africa, in:
African Competitiveness Report 2007, World Economic Forum, p. 87-109,
http://www.weforum.org/pdf/gcr/africa/1.5.pdf.
6
ITU (1997), Recommendation I.113, http://www.itu.int/itudoc/itu-t/com13/circ/055.html.
7
Source: infoDev (2005), Open Access Models; Intel (2004), Understanding Wi-Fi and WiMAX as Metro-Access
Solutions; WiMAX Forum (2006), Mobile WiMAX - A Performance and Comparative Summary; ITU (2007), One
in two people now has access to a mobile phone - India and China lead the world in growth in mobile subscribers.
8
AllAfrica.com (03 October 2007), Internet growth to spur job creation,
http://allafrica.com/stories/200710010915.html.
9
PR Newswire (17 May 2005), Horizon Wireless Speed Internet access Deploying Portable Wireless Broadband
Forum Navini Networks, http://allafrica.com/stories/200710010915.html.
10
Cellular-news (7 August 2007), Mobile Broadband Users to Pass 1 Billion by 2012,
http://www.cellular-news.com/story/25294.php.
11
CNN money.com (27 September 2007), Warid Telecom Uganda Selects Motorola for WiMAX Deployment.
17
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
1
According to ITUs definition, revenue is the gross telecommunication revenue earned from all services
(fixed, mobile and data) within the country.
2
According to ITUs definition, investment is the total annual investment in telecom. It also refers to annual
capital expenditure in telecom including fixed, mobile and other services for acquiring the ownership of
property (including intellectual and non/tangible property) as well as networks. These applications must be
available for public use and excludes investments in telecoms software or equipment for private use.
19
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
South
Africa
Asia 36%
27%
Oceania 902
Americas 574
Europe 458
World 394
Asia 268
Africa 248
20
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Africa 25
Oceania Americas 21.5 21.2
Europe 4%
2% 22%
32% 20
15.8
14.3
15
11.3
%
10
Asia 0
40% Africa Americas Asia Europe Oceania
8000
7000
6000
5000
Investment in million USD Population in millions
4000
3000
2000
1000
0
2000 2001 2002 2003 2004 2005
21
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
Not only companies or governments generate income subscribers include fixed and mobile cellular
in the telecommunication sector but also employees. subscribers, it is likely that the ratio is mainly
In 2005, there were around 264400 employees of improved due to the mobile boom. Additionally, this
telecommunication companiges in Africa of which development might be due to more efficient structures
eleven percent worked in mobile cellular companies. and processes among operators, caused by
privatization (Figure 2.1.1).
Comparing the number of subscribers per employee
in 2001 and 2005, a trend can be identified: Within Employees with skills in outdated technologies are
these five years, an increase of total subscribers per constantly leaving while the companies are competing
employee took place (Figure 5.1). Since the total for high-qualified graduates. Whether the number of
Subscriber by employee
1600
1200
2001 2005
800
400
0
E o
Bu e w e
Tu o n
m ire
To l
So Le s ia
Af o
t
M S n
Pr ola
K ia
Ca ba a
C mb n
Be a
e
d e
a
ga
au ius
Se aso
M gyp
g
Na ipe
ut oth
a
ni
i
in rd
Zi eny
te iqu
ric
ib
s
an
Ca 'Ivo
o
oz ud
b
ni
g
ne
M ur it
m
rk Ve
er
c
F
An
r it
in
a
m
h
a
p
&
m
To
S.
23
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
employees has decreased cannot be determined so far. status aspects. In order to insure its competitiveness
One ITU Study Group is currently discussing how to in the future, Africa needs to ensure to educate people
make the changes visible in regards of numbers of in related subjects and keep or attract professionals
employees but also regarding gender, age and health with relevant skills.
24
TELECOMMUNICATION/ICT MARKETS AND TRENDS IN AFRICA 2007
ANNEX 1
25