LTE – is Africa ready for it?


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LTE – is Africa ready for it?

  1. 1. This document is offered compliments of BSP Media Group. All rights reserved.
  2. 2. LTE – Is Africa Ready for It? Harbir Singh Nat International Finance Corporation, World Bank Group November 12, 2013
  3. 3. 1. Overview of 4G LTE Deployment in Africa • 4G LTE take up in Africa has been slow:  As of September 2013, 85% of the 806mn connections in Africa were 2G, 15% were 3G and only 0.7% were 4G  There are 15 live networks on the continent and approximately 25 planned networks or in deployment • Reasons for slow adoption of 4G LTE: In green – Live networks Data source: GSMA Intelligence  MNOs are still focused on expanding and improving voice networks • Most MNOs are still primarily running 2G or 2.5G networks • 3G penetration is only at 11% • Many of the MNOs are struggling to make money hence not focused on 4G expansion  Income levels do not justify cost of 4G development  Operators (MNOs, broadband companies) may not want to pay potentially high 4G fees so they continue with 3G or WiMAX deployment 2
  4. 4. 2. Current status and growth perspectives in Africa • Connections: By 2017 2G connections will have a negative growth rate, while 3G and 4G connections will grow at quarterly rates of 7.6% and 21% respectively. • LTE connections are expected to increase exponentially from 558,000 at the end of Q32013 to 14.5mn in the next 3 years. Despite the high growth rate, LTE connections will represent only 1.3% of total connections, up from 0.7% at the end of Q32013. • Penetration: 2G penetration will decrease by approximately 7% in the next three years to 54% by 2017, while 3G penetration is expected to increase from 11% to 34%. 4G penetration will evolve from 0.05% to 1.2%. Data source: GSMA Intelligence 3
  5. 5. 3. LTE network delivery models Providers •A mix of broadband (BB) companies and MNOs •Although MNOs are still focused on voice services, some are purchasing LTE licenses •Existing and new BB companies are leading the way in network roll-outs Spectrum •Primarily higher frequencies - FD LTE •Expensive compared to TD LTE •Lower frequencies for the most part are not readily available due to lack of digital switchover Networks •Retail networks: Nigeria, Uganda, Tanzania, Angola, South Africa, Namibia, Zimbabwe •Wholesale networks: Rwanda, Kenya 4
  6. 6. 4. Investors’ view: LTE projects attractiveness Enough spectrum for the project Availability of spectrum for competition MNO interest in space Credible management team Stable regulatory environment Sizeable corporates and (urban) population with sufficient disposable income Conservative capital structure Clear exit path for investors 5
  7. 7. 4. LTE deployment in other Emerging Markets: LAC • 3G and 4G networks are more developed, together accounting for 45% of all connections (estimated to be over 1bn connections as of September 2013). • 4G networks are more widespread, currently 7% of all connections, and are expected to grow faster, at 9% per quarter, building up to 25% of all connections by 2017. • 4G penetration is approximately 8% and is projected to increase at a fast pace, reaching 30% in the next three years. 3G penetration is also expected to expand by 15% during the same period, as 2G penetration decreases to as low as 38% (today at 60%). • There are 20 live networks on the continent and approximately 37 planned networks or in deployment. • Providers: Primarily MNOs, but broadband companies as well 6
  8. 8. Worldwide 4G-LTE Network Launches, August 2013 Data source: GSMA Intelligence 7
  9. 9. Thank you. 8