For mature telecommunication markets, the primary form of Internet access is fixed, and the secondary is mobile. In Africa, mobile is the primary and only form of Internet access for most people. Offering fixed broadband at faster speed and lower prices than mobile is key for fixed-line operators to start growing again.

1. BROADBAND PLATFORM COMPETITION
27 April 2023
SOUTHERN AFRICA TELECOMMUNICATIONS ASSOCIATION
(SATA) ANNUAL CONFERENCE 2023
Research ICT Solutions

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The Internet is a connected ecosystem
Telcos benefit from the demand for content and the
supply of content.
In the past, the data flow was from
content owners to the end-user via
radio, TV and the public Internet.
Today, users create content through
social media applications and other
ways of uploading data, contributing
to the content segment of the value
chain.
Network effects triggered by user
generated content led to
acceleration in broadband adoption
and data use.
Streaming services such as Netflix
are a force back to the chain
structure.
A wide use of AI (ChatGPT etc) will
accelerate the Self-reinforcing
character of the Internet.
THE
INTERNET VALUE
CIRCLE
CONTENT
Premium rights
Professional content
User-generated content
ONLINE
SERVICES
e-Retail
Streaming
Gaming
Social media
Search services
Cloud services
CONNECTIVITY
First Mile
Middle Mile
Last Mile
Invisible Mile
USER INTERFACE
Access devices
OS &
software apps
ENABLING SERVICES
Web design & hosting
Payment platforms
Advertising
USER OF
DIGITAL SERVICES
Skills
Content
Functionality

3. 3
RIS Size of the global Internet Value Chain
Segment Example activities
2008 2015 2020
Growth
USD
billion
Share
USD
billion
Share
USD
billion
Share
Content Rights Premium content rights 37 3% 66 2% 186 3% 403%
Online Services
e-Travel, video and audio publishing,
gaming, gambling, search, social
media, information & reference, cloud
based services, other online services
477 40% 1,595 48% 3,792 57% 695%
Enabling
Technologies &
Service
Web design & hosting, payment
systems, advertising exchanges, CDNs
188 16% 442 13% 812 12% 332%
Connectivity
Mobile access, tower cows, fixed
access
229 19% 586 18% 988 15% 331%
User Interface
Hardware devices, software and
systems
251 21% 659 20% 897 13% 257%
Total 1,182 3,348 6,675 465%
Source: https://www.gsma.com/publicpolicy/wp-content/uploads/2022/05/Internet-Value-Chain-2022.pdf
The expansion of all segments of the Internet value chain is driven by content, consumed through
OTT applications.

4. 4
RIS Profitability along the global Internet Value
Chain
Segment Sectors
EBITDA
Margins
Return on
Equity
Cost of
Capital
Content Rights
Broadcasting 19.0% 29.8% 9.2%
Entertainment 14.7% 5.3% 11.8%
Online Services
Advertising 12.7% 10.2% 11.8%
Information Services 25.5% 14.5% 13.9%
Retail (Online) 7.3% -0.1% 14.6%
Software (Entertainment) 31.6% 18.7% 15.0%
Enabling Technologies
Telecom. Equipment 14.2% 12.7% 12.4%
Software (Internet) 5.7% -14.6% 13.3%
Connectivity
Telecom (Wireless) 33.3% 6.0% 8.4%
Telecom. Services 32.8% 9.8% 8.1%
User Interface
Electronics (Consumer & Office) 12.0% 7.9% 11.3%
Software (System & Application) 24.6% 13.4% 13.9%
Average across 94 sectors 14.5% 5.0% 9.5%
Source: Aswath Damodaran, updated 2023/01/11

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RIS
For Europe, the USA and other mature telecommunication markets the
primary form of Internet access is fixed and the secondary mobile
In Africa, mobile is the primary and only form of Internet access for the
majority of people.
Fixed broadband is key to keep fixed-line customer
Platform Competition between fixed and wirelesses
broadband
2020 2021 Change
Sub-
Saharan
Africa
Fixed broadband subscriptions (per 100 people) 0.60 0.76 27%
Fixed telephone subscriptions (per 100 people) 0.71 0.63 -11%
Mobile cellular subscriptions (per 100 people) 81.98 92.61 13%
High
Income
Fixed broadband subscriptions (per 100 people) 35.66 36.33 2%
Fixed telephone subscriptions (per 100 people) 35.58 33.75 -5%
Mobile cellular subscriptions (per 100 people) 121.9 124.61 2%

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An immersive AR/VR experience requires fast
symmetrical broadband and low latency
Mobile
Download Mbps Upload Mbps
13.2
60.6
11.9
43.5
10.3
31.4
9.1
24.4
19Q1
20Q1
21Q1
22Q1
Fixed
Download Mbps Upload Mbps
48.2
106.2
35.8
77.2
26.6
59.2
20.7
49.7
19Q1
20Q1
21Q1
22Q1
Latency
Mobile Latency in ms Fixed Latency in ms
25.4
39.5
28.0
40.2
33.2
43.3 41.6
51.6 19Q1 20Q1 21Q1 22Q1
Source: Ookla data for good
Globally fixed is more symmetric and has lower latency

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RIS
Fast Internet s measured in upload speeds for mobile and fixed. Average
upload speeds of 100Mbps or more score 100%, and below 10Mbps score
0%. Values in between are evenly spaced.
Latency is grouped into 11 categories. A score of 100% if a country has a
latency of 5ms or lower and a score of 0% if the average latency is more than
50ms.
Affordability is measured as the lowest cost of 20 GB valid for a month
for prepaid customers in a country. Countries where 20 GB cost less than
1% of GNICM will score 100%. Countries where 20 GB prepaid cost more than
5% of GNI per capita per month will score 0%. Values in between are evenly
spaced.
RIS: Next Generation Internet Index (NGII) is based on
absolute objectives, not ranking relative to other
countries
Index value 0% 100% Source
Average upload speeds below 10 Mbps 100 Mbps or more Ookla data for good
Average latency more than 50ms 5ms or less Ookla data for good
20GB per month as % of GNPC per month more than 5% less than 1% RIS & Worldbank
National Cyber Security Index 0 100 e-Governance Academy

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https://researchictsolutions.com/ngii-portal/next_generation_internet_index.php

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NGII scores for SADC for Q3 2022
NGII NGII Rank
NGII Rank
Africa
Fast Internet Latency Affordability
Mauritius 60% 25 1 10% 70% 100%
South Africa 40% 70 3 10% 30% 80%
Lesotho 20% 108 13 10% 50% 0%
Seychelles 20% 111 14 20% 40% 0%
Malawi 13% 118 20 10% 30% 0%
Namibia 13% 120 21 0% 0% 40%
Botswana 10% 125 25 10% 0% 20%
Madagascar 10% 130 29 10% 20% 0%
Mozambique 7% 137 32 10% 10% 0%
Zimbabwe 7% 141 34 0% 0% 20%
Comoros 3% 143 36 10% 0% 0%
Eswatini 3% 145 38 10% 0% 0%
Zambia 3% 150 41 10% 0% 0%
Angola 0% 152 42 0% 0% 0%
Tanzania 0% 164 51 0% 0% 0%

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RIS
Lessons from the Caribbean
Fixed
broadband
penetration
per 100
Cheapest price in USD Download speed in Mbps
20GB
mobile
uncapped
fixed
Cheaper? Mobile Fixed Faster?
Bahamas 20.4 72.8 34.1 Fixed 33.57 60.05 Fixed
Barbados 36.5 59.5 49.1 Fixed 31.45 142.25 Fixed
Grenada 25.9 40.7 38.48 Fixed 37.65 86.12 Fixed
Saint Kitts and Nevis 63.0 44.4 40.3 Fixed 23.28 36.42 Fixed
Saint Lucia 18.4 51.8 37 Fixed 33.8 135.89 Fixed
Trinidad and Tobago 23.9 35.7 24.7 Fixed 31.91 91.09 Fixed
Cayman Islands 47.5 126.1 108 Fixed 112.02 59.24 Mobile
Dominica 22.2 33.3 35.15 Mobile 31.38 73.94 Fixed
Haiti 0.3 4.3 43.4 Mobile 14.88 17.7 Fixed
Saint Vincent and the
Grenadines
26.7 42.6 44.4 Mobile 35.06 132.88 Fixed
Antigua and Barbuda 8.6 38.9 62.5 Mobile 31.99 26.57 Mobile
Jamaica 14.6 21.1 26.1 Mobile 38.78 35.74 Mobile
Puerto Rico 20.5 29.0 61.6 Mobile 106.41 87.06 Mobile
Sources ITU 2022 RIS Q3 2022 Ookla Q3 2022

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Dr. Christoph Stork , Partner, RIS
+27 84 999 0002
christoph@researchictsolutions.com
Steve Esselaar , Partner, RIS
+1 778 865 5695
steve@researchictsolutions.com
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