The future of broadband: What bandwidth evolution can Africa expect in the future?
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The future of broadband: What bandwidth evolution can Africa expect in the future?

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  • 1. The future of broadband:What bandwidth evolution can Africa expect in the future April 2012 Broadband Confex Chantel Lindeman
  • 2. Agenda Megatrends impacting Africa Urbanisation Regional integration Future Infrastructure Connecting the unconnected Current broadband situation Future impact of bandwidth Competitive playing field Future connectivity platforms 2
  • 3. Africa – The Dark Continent C. Mayhew & R. Simmon (NASA / GSFC). NOAA / NGDC, DMSP Digital Archive 3
  • 4. The megatrends impacting the ICT sector in Africa over the next 5 to 8 years Regional Integration Urbanisation Connecting the Unconnected Future Infrastructure Source: Frost & Sullivan analysis. 4
  • 5. As a region, Africa will possess the second largest number of urban occupantsby 2020 Asia North America Europe 533 288 560 340 1,757 Africa 2,383 Latin America and Caribbean Oceana 412 468 660 25 560 30 2020 2010 Urban Population (million) 5
  • 6. Seventy % of urbanised Africa will live in informal settlements Splintered Urbanisation Major Informal Settlements, Africa, 2050 African urban communities will comprise 70 per cent Chad informal settlement dwellers living alongside an 99.4% of the emerging middle class roughly equal to that of India population live in informal settlements Ethiopia 99.4% of the population live in informal settlements Lagos 75% of the population Nairobi live in informal Kibera > 1 settlements million people Kinshasa MaputoPercent of Urban Residents by Type of Settlement, Africa, 2050 70% 30% not living in in informal Luanda informal settlements Cacuaco > settlements 600,000 people Johannesburg/ Pretoria Cape Town Soweto Khayelitsha Source: UN-Habitat, Frost & Sullivan analysis. 6
  • 7. African cities will require resource efficient technologies to meet socialchallenges and business opportunities Cairo Cairo is expected to grow from 11 million in 2010 to over 13.5 million by 2025; it is the only mega city, by definition, in Africa. Lagos and Eko Atlantic City Region Lagos’s Eko Atlantic City will merge with the city of Lagos to form a future business gateway to Africa—a mega region of over 16 million. North South Corridor Transport routes across the region will be expanded and integrated to create corridors for trade and inter- continental co-operation by linking mega cities. Source: Frost & Sullivan analysis 7
  • 8. Corridors will unlock economic potential of landlocked countries and willimprove inter-dependence among cities, leading to regional economic growth Mega Corridors, Africa, 2050 The North Delta Region 1,000 km Abidjan-Ouagadougou • Combined population of 77 Alexandria Cairo Corridor million • Three emerging corridors: Cairo-Suez Cairo-Alexandria Cairo-Ismailia. Ouagadougou Addis Ababa Abidjan 900 km Kampala-Nairobi- Ibadan Mombasa urban corridor The Greater Ibadan Lagos Accra Accra (GILA) Corridor Lagos Nairobi • Combined population >18 million • Contributes combined GDP of Kinshasa Dar es Salaam $127,592,000. Luanda North-South Corridor • Facilitate inter-regional trade Trans-Cunene Corridor from Cape to Cairo. • Will link the Democratic Republic of • Free trade area comprising 533 Congo (DRC) with South Africa million people. through Angola and Namibia. • Combined GDP of $833 billion or 58% of Africa’s GDP. Main Developed Corridors Cape Town Johannesburg/ Future Corridor Development Durban Pretoria Source: UN-Habitat, 2010, Frost & Sullivan analysis. 8
  • 9. An integrated continent – development in intra-trade and key infrastructuredevelopmentPower, Transport and Trade Integration (Africa), 2010 – 2020 Total Intra-trade: $216 billion Power Interconnection Investment: $50 billion Regional Transport Investment (road, rail): $30 billion ICT Infrastructure Development: $60 billion ` Planned Electricity Interconnections Road Infrastructure development Trilateral Free Trade Agreement (T-FTA) Source: Frost & Sullivan Analysis 9
  • 10. Agenda Megatrends impacting Africa Urbanisation Regional integration Future Infrastructure Connecting the unconnected Current broadband situation Future impact of bandwidth Competitive playing field Future connectivity platforms 10
  • 11. Markets with 80% broadband penetration are more than twice as innovative ascountries with 40% Penetration Mobile, Broadband, and Internet Penetration per Region, Global, 2009 and 2020 140% Europe North America 123% 110% 90% 100% 100% 100% 90% 82% 70% 68% 56% 110% Asia 65% 75% 56% 21% Africa 11% Latin America 90% 60% Oceania 120% 112% 95% Mobile Penetration 2009 91% 50% 41% 83% 70% 85% 82% Mobile Penetration 2020 27% 8% 57% Broadband Penetration 2009 4% Broadband Penetration 2020 9% Internet Penetration 2009 7% Internet Penetration 2020 Source: 2009 telecommunications statistics from ITU, 2020 projections from Frost & Sullivan 11
  • 12. Annual growth rates of 9% to 2020 will allow Africa to reach a mobilepenetration rate close to market saturation Mobile Telephony Penetration Rate, Africa, 2010 Mobile Telephony Penetration Rate, Africa, 2020 Mobile Phone Subscriptions • In 2010, African mobile penetration is just less than 50 per cent. • That said, several countries have reached saturation. • By 2020 we expect a 90 per cent mobile penetration rate. 80–100% $80 billion investment 60–80% in networks 40–60% 20–40% Low cost mobile <20% phones Value-added Services 500 million 1,170 million Source: Frost & Sullivan, 2011 12
  • 13. Announcement of additional submarine cables to BRICs in saturatedundersea cable market is concerning – terrestrial fibre is key • Terrestrial fibre will unlock the vast amounts of bandwidth available from undersea cables • Fibre vendors, telcos and municipalities have began investing heavily in infrastructure • Mobile broadband and data centres are driving the revenue and subscriber growth rates • Landlocked countries have access to EASSy and WACS through incumbents • ISPs still have access issues to backhaul services. Source: Steve Song Map and Ubuntu Alliance, 2012 13
  • 14. By 2020, $4 billion is expected to be invested in submarine fibre cables and $56billion on terrestrial networks Submarine Fibre Optic Landing Points, Africa, 2020 The number of major ISPs will increase from 20 to 25 Thirteen undersea cables will result in a 90 per cent decrease in the wholesale cost of international bandwidth Revenue from data services to reach $137,000 million in 2010 1 to 3 cables 4 or more cables Landlocked country with access to submarine Mobile operators cable will be the ISPs Terrestrial fibre links Sub marine cables – Multiple cables Source: Frost & Sullivan, 2011 14
  • 15. DSL adoption is expected to decline whilst mobile broadband leapfrogs inuptake Total Broadband Market: Technology Adoption Trends (Africa), 2010 High Introduction Growth Maturity Decline Dial-up Access Adoption Rate Mobile DSL Access Broadband Satellite WiMax LTE Wi-Fi Low Technology Stage Source: Frost & Sullivan analysis. 15
  • 16. In response to the declining voice revenues, existing operators are focusing on providing broadband services to both businesses and consumers Total Broadband Market: Competitive Structure Number of Companies in the Market More than 255 Cost, performance, schedule, support, technology, reliability, Competitive Factors contractor relationships, customer relationships Key End-user Groups Consumers, SMEs and Enterprises Major Market Participants* Vodacom, MTN, Telkom, Orange and Econet Market Share of Top 10 Competitors 80% Other Notable Market Participants Internet Solutions, Africonnect, PowerTel, Africom Distribution Structure Direct sales Vodacom Gateway Mauritus acquired Africonnect; Lap Green Notable Acquisitions and Mergers acquired 75% of ZAMTEL, Liquid Telecom acquired 49% of Ecoweb.*Major market participants by broadband technology Source: Frost & Sullivan analysis. 16
  • 17. Government will drive future investments in order to facilitate growth in the business sector• Collaborated infrastructure expansion and sharing Total Broadband Market: Strategic Conclusions has increased broadband penetration• The influence of undersea cables cannot be denied ‒ Broadband prices have started to decrease in the region Further Infrastructure consolidation expansion and ‒ ISPs and mobile operators have already started to take expected sharing advantage of this• Regulator facilitation of spectrum allocation will enhance deployment of technologies like WiMax and Influence Managed of LTE services Broadband undersea pushes Market cables• Effective customer segmentation is crucial for ISPs to broadband market properly differentiate themselves• An increased demand for managed services pushes the broadband market Effective customer Spectrum ‒ Data centres, storage and converged communication segmentation allocation crucial• Frost & Sullivan expects further consolidation, especially between tier II and III operators Source: Frost & Sullivan analysis. 17
  • 18. Connectivity will generate $200 Billion in opportunities fornetworked sectors by 2020 ` Seventy per cent of electrified ICT innovation will be a households to use remote metering major employer of skilled of electricity and automatic load manpower staggering–$20 billion will be invested Five per cent of cities will deploy One hundred per cent of intelligent transport systems for terrestrial TV broadcasting traffic management–$10 billion will will be digital–$4 billion worth be invested in these systems of set-top-boxes to be sold Forty per cent of hospitals will be networked with pharmacies and Ten per cent of urban office doctors–$40 billion will be spent on staff will work from home and hospital ICT equipment use broadband networks Seventy per cent of all banking transactions will use mobile technology–$300 billion to be transacted Source: Frost & Sullivan, 2011 18
  • 19. Youradditional informationFor Contact For Additional Information Chantel Lindeman Business Unit Leader – ICT Africa http://www.frost.com Tel: +27 21 680 3205 Mobile: +27 82 555 3851 E mail: chantel.lindeman@frost.com 19