Day 1 C2C Summit July 2016 - Connectivity index Global and Africa by Ovum

1. Connectivity index global and Africa
Thecla Mbongue, Senior analyst, MEA
Connect 2 Connect
Pretoria, 19th July 2016

2. Broadband connectivity index
Broadband connectivity enablers in Africa
The future of digital services in Africa
Key takeaway
Connectivity index global and Africa
© Copyright Informa 2016. All rights reserved.

3. Main
Brand
© Copyright Informa 2016. All rights reserved.
Ovum’s Broadband Development Index (BDI)
provides a global picture of broadband
connectivity and the rate at which different
countries are migrating customers to high-
speed networks.
The BDI has separate scores for fixed and
mobile network connections. The maximum
value of the mobile index is 500. The
maximum value of the fixed index is also 500.
The maximum value of the total Broadband
Development Index is therefore 1000.
Broadband connectivity index

4. Main
Brand
B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
 Africa is the second-lowest-ranked region in the world in terms of its overall broadband
development, with a BDI score of 236 out of 1,000 for 2015
 The world average was 385 in 2015
Broadband connectivity index

5. © Copyright Informa 2016. All rights reserved.
Broadband connectivity index
 Southern African and Northern African
markets record the highest BDI. Markets
with highest BDI usually have a strong
fixed network legacy and/or are often
early LTE adopters
 Mauritius is the highest-ranked country in
Africa in the BDI for 2015, with a score of
290 out of 1,000

6. B-brands
(trending)
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LTE, key connectivity enabler on a continent dominated by mobile networks
Broadband connectivity enablers
Timeline LTE launches in Africa
Angola, Mauritius, Namibia,
Tanzania, South Africa,
Uganda
Nigeria, Zimbabwe, Zambia
Cote d’Ivoire, Ghana, Kenya,
Lesotho, Gabon, Rwanda,
Seychelles, Madagascar
Botswana, Chad, Ethiopia,
Benin, Cameroon, Bissau
Burundi, Liberia
2012
2013
2014
2015
2016
Networks rollout (LTE, FTTx…)
Regulation (spectrum
allocation)
Affordability (tariffs,
smartphones)

7. B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
LTE, key broadband connectivity enabler on a continent dominated by mobile networks
Broadband connectivity enablers
Africa mobile subscription forecasts by technology, 2015–20 Africa fixed broadband subscription forecasts by technology, 2015–20
 Mobile broadband subscriptions on the continent will reach 1 billion in 2020, up from 222.34 million at end-2015. The
number of fixed broadband connections in Africa is expected to increase from 11.61 million at end-2015 to 17.23 million
at end-2020. xDSL will account for the largest number of fixed broadband connections in Africa throughout the forecast
period.
 LTE a key player in a both fixed and mobile segments. In the fixed market, WiMAX subscribers are being migrated to LTE
platforms.

8. Main
Brand
© Copyright Informa 2016. All rights reserved.
The future of digital services in Africa
-
500
1,000
1,500
2,000
2,500
3,000
Smartphone Non-Smartphone Tablet Other Portable
Cellular traffic in Africa (PB) ; 2015-2020
2015 2020
-
500
1,000
1,500
2,000
2,500
3,000
Smartphone Non-Smartphone Tablet Other Portable
Wi-Fi traffic in Africa (PB) ; 2015-2020
2015 2020
Improved broadband connectivity fuels data traffic growth as well as
substantial opportunities in data-based or digital services
 Africa data traffic over fixed broadband networks exceed 630 PB in 2015, set to reach 2,000PB in 2020
 Africa data traffic over cellular + Wi-Fi networks exceed 1,200 PB in 2015, set to reach 8,000 PB in 2020

9. B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
The future of digital services in Africa
Venturing and incubation
Connectivity
B2C B2B
Music OTT video Games Carrier billing
Advertising
Big data
Payments (emerging markets)
M2M and IoT
Cloud computing Unif comms
Cloud / storage
Energy efficiency
VerticalsConnected Car
B2B2C:platform,enablement,wholesale?
Bundled services
IoT
ICT services
Smart home
Health
Security
Entertainment
Managed services Security
Improved broadband connectivity fuels data traffic growth as well as substantial
opportunities in data-based or digital services
Rising trends:
global

10. B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
The future of digital services in Africa
Connectivity
B2C B2B
Music OTT video Games Carrier billing
Advertising
Big data
Payments (emerging markets)
M2M and IoT
Cloud computing
Cloud / storage
Energy efficiency
VerticalsConnected Car
B2B2C:platform,enablement,wholesale?
Bundled services
ICT services
Smart home
Entertainment
Managed services Security
Improved broadband connectivity fuels data traffic growth as well as substantial
opportunities in data-based or digital services
Rising trends:
Africa

11. B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
The future of digital services in Africa
Mobile financial services: P2P to remain the key segment over the next 5 years
 Globally , m-commerce is driving growth in the
m-payments user base. The exception to this is
Africa, where the user base for P2P transfers
remains the largest of all m-payment segments
throughout the forecast period.
 The transaction value of P2P transfers will also
remain larger than that of m-commerce in
Africa until towards the end of the forecast
period, when m-commerce will pull ahead.
 International remittance is a key growing
segment as operators increasingly partner with
financial institutions and between each other
for cross border and international remittance.
M-payment usage in Africa by segment; 2013-2019

12. Main
Brand
B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
The M2M/ IoT opportunity
 M2M connections will more
than double to reach 45.2
million by 2020.
 Utilities and transport are the
biggest vertical sector
opportunities, in number of
connections. The utilities sector
will reach 15.9 million
connections (35% of all
industrial M2M connections) in
2020 (prepaid electricity, smart
metering) . Transport will use
8.3 million connections by
2020.
The future of digital services in Africa

13. B-brands
(trending)
© Copyright Informa 2016. All rights reserved.
Connectivity impact on digital services growth
OTT/VOD and TV: segments boosted by new platforms and increased
availability of local content
 DTT switchover has started across Africa with few markets planning to complete fully the process by
end-2016. Despite a lot of announcements and a lot of enthusiasm from the authorities, Lack of
funds to accelerate the process will most likely make it a lengthy venture.
 Pay-TV operators still have a bright future at least for the short-term as DTT is yet to take off but also
because Pay-TV key players, with more funds, continue secure premium content and invest
increasingly in VOD.
 Market leader Canal + has invested a lot in local content during 2015. Such initiative helped Canal +
adding 500,000 subscribers over the year to March 2016, when the group passed the 2 million
subscribers mark in Africa. In 1Q16, Canal+ launched DTT services branded “Easy TV” in Congo
republic.
 VOD is becoming a key element of TV operators’ strategies. In 4Q15, Orange group announced its
participation in funding SVOD platform Afristream currently available in Cote d’Ivoire and Senegal.
In 1Q16, Netflix launched its platform across Africa and in May 2016, South African based ShowMax
expanded from South Africa to other African markets (including Francophone markets).

14. Key Takeaways
Africa BDI to double
over the next 5 years,
however, Africa will still
rank among the lowest
in terms of broadband
connectivity.
4G and fibre networks
rollout are Key broadband
connectivity enablers.
Regulation stance still
holds 4G deployment
in key markets.
Spectrum auction
mostly delayed by the
slow broadcast digital
migration process.
Improved
broadband
connectivity
fuels substantial
opportunities in
digital services
© Copyright Informa 2016. All rights reserved.

15. Thank You
thecla.mbongue@ovum.com
@tmbongue

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