East African Broadband Market
Increasing Uptake of Broadband Services in Ethiopia, Sudan,
and Rwanda

M8C2-63
November 201...
Research Team

Lead Analyst

Contributing Analyst

J
Jana Thi i
Thirion

Chi Ngongoni
Chipo N
i

Research Analyst, Informa...
Contents

Section

Slide Numbers

Executive Summary

4

Market Overview

10

Total Broadband Market

-

• External Challen...
Executive Summary

M8C2-63

4
Executive Summary
• The combined broadband market revenue in Ethiopia, Sudan, and Rwanda is expected to
reach $159.2 milli...
Executive Summary (continued)
• Moreover, as a result of the multiple government-led initiatives, Rwanda has improved the
...
Executive Summary—Market Engineering Measurements
Total Broadband Market: East Africa, 2011

Market Overview
Market Revenu...
Executive Summary—Market Engineering Measurements
(continued)
Competitor Overview
Number of
Competitors

Number of
Compani...
Executive Summary—CEO’s Perspective

1

Mobile broadband connections have
surpassed fixed broadband
connections across all...
Market Overview

M8C2-63

10
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East African Broadband Market - Increasing Uptake of Broadband Services in Ethiopia, Sudan, and Rwanda

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This research service encompasses an analysis of East African broadband market focusing on Ethiopia, Sudan, and Rwanda. The study includes an analysis of key market developments and trends, the market size in terms of revenue and subscribers, demand and competition, and drivers and restraints. It also investigates the deployment of new technologies in East Africa. This study identifies the market forces in the 3 countries and determines the potential growth of these countries. Three big predictions and strategic recommendations are included. The base year used for this research study is 2011 and the forecast period is from 2012 to 2017.

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East African Broadband Market - Increasing Uptake of Broadband Services in Ethiopia, Sudan, and Rwanda

  1. 1. East African Broadband Market Increasing Uptake of Broadband Services in Ethiopia, Sudan, and Rwanda M8C2-63 November 2013
  2. 2. Research Team Lead Analyst Contributing Analyst J Jana Thi i Thirion Chi Ngongoni Chipo N i Research Analyst, Information and Commmunications Technology (ICT) Research Analyst, Information and Commmunications Technology (+27) 21 680 3212 (+27) 21 680 3271 Jana.Thirion@frost.com Chipo.Ngongoni@frost.com Research Director Strategic Review Committee Leader M i James Mani J I Duvenage Ian D Regional Director, Operations Manager CBU Leader, ICT (+27) 21 680 3208 Mani.James@frost.com M8C2-63 (+27) 21 680 3275 Ian.Duvenage@frost.com 2
  3. 3. Contents Section Slide Numbers Executive Summary 4 Market Overview 10 Total Broadband Market - • External Challenges: Drivers and Restraints 24 • Forecast and Trends 32 • Demand Analysis 42 • Market Share and Competitive Analysis 45 Ethiopia Breakdown 52 Rwanda Breakdown 63 Sudan Breakdown 75 The Last Word 87 Appendix 92 M8C2-63 3
  4. 4. Executive Summary M8C2-63 4
  5. 5. Executive Summary • The combined broadband market revenue in Ethiopia, Sudan, and Rwanda is expected to reach $159.2 million in 2017, growing at a compound annual growth rate (CAGR) of 8.1% between 2011 and 2017. The combined revenue will derive from 2, 465,000 broadband subscribers. • The combined revenue growths will be mainly driven by the increasing uptake of broadband services and the entry of new Internet Service Providers (ISPs) in these countries. Ethiopia is likely to open up its telecommunications sector in the short term and this will certainly have a huge impact on the uptake of broadband services in the country. • Sudan accounted for 53% of the combined broadband services market in the 3 countries. • In 2011, the combined broadband revenue was $99.6 million, generated by 880,000 broadband subscribers. • In 2011, there were 29 broadband providers in the 3 countries. However, there was only 1 broadband provider in Ethiopia. • Broadband providers have been deploying wireless networks such as worldwide interoperability for microwave access (WiMAX) and Third Generation (3G) to serve end users in the respective countries. This has enormously contributed to the increase in broadband subscriptions. • For example, Rwanda has had significant changes in terms of broadband services with the entry of several ISPs and the issuance of 3G licenses to mobile operators. Source: Frost & Sullivan M8C2-63 5
  6. 6. Executive Summary (continued) • Moreover, as a result of the multiple government-led initiatives, Rwanda has improved the Internet penetration rates from 1% in 2009 to 7% in 2011. • Broadband network coverage is still relatively low across all countries, with an average 20% geographic coverage. • This is indicative of a large under-serviced market and the existence of high growth potential in the 3 countries. • Consequently, new market participants might target areas without broadband services in the 3 countries by providing affordable tariffs to both consumers and businesses. • For example, service providers could have regional or provincial deployments just to service areas where the other broadband operators are not operating. • This could help them enjoy first-mover advantages when other operators decide to launch their network in these regions. • Code division multiple access (CDMA) technology has emerged as an alternative access network to digital subscriber line (DSL) and global system for mobile communications (GSM) technologies across all these countries. • The other technology used by ISPs is WiMAX, mainly to serve their corporate customers. Source: Frost & Sullivan M8C2-63 6
  7. 7. Executive Summary—Market Engineering Measurements Total Broadband Market: East Africa, 2011 Market Overview Market Revenue Market Stage Growth Compound Annual Growth Rate 8.1% 8.5% (CAGR) $159.2 M 880,000 $99.6 M (2017) (2011) (2011) Base Year Market Growth Rate Market Size at End of Forecast Period Market Subscriber Customer Price Sensitivity 9 Degree of Technical Change 5 (scale:1 [low] to 10 [High]) Market Concentration (in terms of subscribers) 81.7% (scale:1 [low] to 10 [High]) (% of base year market controlled by top 4 competitors) For a tabular version click here. Decreasing Stable Increasing Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan M8C2-63 7
  8. 8. Executive Summary—Market Engineering Measurements (continued) Competitor Overview Number of Competitors Number of Companies that Exited* 0 29 (active market competitors in base year) (2011) Number of Companies that Entered* 1 (2011) Total Addressable Market Current Potential Users 9.9 M Decreasing Stable Increasing *Companies with revenue > $50 M. Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan M8C2-63 8
  9. 9. Executive Summary—CEO’s Perspective 1 Mobile broadband connections have surpassed fixed broadband connections across all 3 countries. 2 Network expansions and governmentled initiatives have increased the uptake of broadband services. 3 Ethiopia has a single ISP, therefore, the regulator is expected to issue ISP licenses in the short to medium term. 4 All incumbent fixed line operators have deployed CDMA technologies to offer broadband services. 5 Some ISPs have started to bundled broadband services with managed services in Rwanda and Sudan. Source: Frost & Sullivan M8C2-63 9
  10. 10. Market Overview M8C2-63 10

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