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Africa Digital
Infrastructure
Market Analysis
2021 Report
Established in 2010 under the banner of the FTTx Council Africa, the
Digital Council is an independent, not for profit organisation that seeks
dialogue with all stakeholders to discuss how to maximise the societal
benefits of digital and data-driven technologies to increase equality
and inclusivity, wellbeing and digital adoption.
In turn, we support government with issues such as policy and
regulation, best practice and minimum standards through an
independent voice. Member engagement is encouraged through
participation in events and working groups. We offer members an
opportunity to network and collaborate and discuss best practice
frameworks that are in the best interest of all, solving complex issues
through dialogue and policy adoption. Furthermore, we encourage
dialogue between government and the private sector from a platform
that is independent and product agnostic. In addition, our mission is to
see broad-based investment in digital skills by all stakeholders, thereby
enhancing the lives of all people living on the continent of Africa.
The Digital Council Africa believes that the development and
deployment of digital access will enhance the quality of life for citizens
in South Africa and Africa as a whole, providing African countries with
a digital footprint that will increase their effectiveness and
competitiveness within the global marketplace. The council’s charter is
to educate Africa governments, policy makers and political leaders on
technology and data issues facing the continent. Further, we seek to
develop methods as to how digital connectivity and services can be
delivered to citizens within the coming years. Through consultation
with all major stakeholders and understanding their strategies and
concerns, we endeavour to be the voice of the industry and to help
create a better future for all involved.
For information on membership visit www.digitalcouncil.africa
ABOUT DIGITAL COUNCIL AFRICA
Source(s):
3
Digital
Council
Africa
Market
Analysis
2021
Digitalthings
EXECUTIVE SUMMARY
Digital infrastructure investments and infrastructure sharing initiatives in the last year is encouraging, however,
Sub-Saharan Africa needs more decisive and swift action from the industry stakeholders to bridge the digital divide.
The digital economy is essential to meet the requirements of a new, post Covid digital world.
Today it is widely accepted that the digital economy has the potential to create jobs, alleviates poverty, and enhances the region’s competitiveness through
digital transformation of all sectors of an economy, from healthcare to education, agriculture to trade and fintech, among others. However, it goes without
saying that a digital economy requires a modern and robust digital infrastructure that is inclusive and reaches all people to allow access for participation.
Unfortunately, to date digital infrastructure developments has been relatively slow and given the historic deficit, the gap between Sub-Saharan Africa and
the developed economies are widening. While Africa’s infrastructure challenge is not a new one, it’s the most significant barrier on the continent among
others including but not limited to broadband service quality, affordability (both of service and handsets), the policy, regulatory and fiscal environment, the
status of digital skills, gender, age, education and more.
On the positive side, ICT has been one of the most dynamic and resilient sectors on the continent not only surviving but also enabling other
industries to survive the catastrophic impacts of the COVID-19 pandemic. It is also one of the leading sectors that attracts foreign
direct investment to international investors and development institutions who are looking to unlock value by bridging the digital divide and
enabling innovative service models. As a result, there is a renewed wave of investments in Africa by the hyperscalers, infrastructure operators
and investors alike, for digital infrastructure assets ranging from enormous submarine cable systems such as Equiano and 2Africa, to new data
centres and towers.
Especially noteworthy is the increased level of infrastructure sharing initiatives by the network operators as
their business model and focus continues to shift from traditional communication services (voice, data and
messaging) to become providers of a wide range of digital lifestyle services (e.g. financial, insurance, banking,
entertainment, IT, and many other). Pan-African operators continue to monetise their assets indifferent ways.
For example, Airtel has continued to outsource its tower portfolio in various countries including Madagascar,
Malawi, Gabon, Chad and Tanzania in transactions with Helios Towers and SBA. On the other hand, Orange and
MTN are pursuing their plans to create their own infrastructure companies to leverage existing assets (e.g. fibre
and data centres) to offer open-access services to other operators. Existing infrastructure operators have
not only continued to expand their footprint but also diversify asset class to new infrastructure- by example
Liquid Intelligent Technologies who has carved out the data centre assets to a new independent entity, Africa
Data Centres, and announced a massive expansion plan on the continent. Teraco and MainOne are other major
players who have recently completed large scale data centre deployments and announced further expansion
plans of their data centre portfolios on the continent with the latest market entry the announcement of the
new Vantage Datacentre to be built in Johannesburg, South Africa.
Source(s):
4
Digital
Council
Africa
Market
Analysis
2021
CURRENT STATE OF FIXED ACCESS CONNECTIVITY - SSA
FTTH/B remains a niche fixed broadband technology in SSA, nevertheless rollouts are shifting
towards secondary cities and major towns in leading markets as urban coverage matures.
0.06%
0.00%
0.01%
0.09%
0.02%
2.14%
0.06%
0.03%
0.18%
0.07%
2.00%
1.48%
0.12%
1.76%
0.16%
0.04%
0.09%
1.39%
1.45%
1.13%
19.30%
1.00%
0.22%
3.62%
1.64%
87.71%
3.44%
6.55%
0 200 400 600 800 1000 1200 1400
Comoros
Niger
Mali
Equatorial Guinea
Somalia
Sao Tome and Principe
Benin
Malawi
Liberia
Rwanda
Cape Verde
Gabon
Cameroon
Namibia
Mozambique
Nigeria
Madagascar
Togo
Zimbabwe
CĂ´te d'Ivoire
RĂŠunion
Angola
Ghana
Senegal
Tanzania
Mauritius
Kenya
South Africa
Thousands
Sub-Saharan Africa FTTH/B Connections and
Household Penetration Rates by Country
FTTH/B
In most markets in SSA, fibre-based broadband service offerings remains a niche
service focused on main cities and urban areas. The overall household
penetration of fibre based broadband services remains below 2% in most SSA
countries with the exception of the leading markets such as Mauritius, South
Africa and Kenya.
South Africa is the only country in Sub-Saharan Africa that exceeded 1 million
fibre broadband subscribers as of 2021, while Mauritius has achieved almost
ubiquitous fibre coverage with over 87% of the households enjoying the fibre-
based broadband service.
As the fibre penetration evolved, the cost of last-mile fibre deployments has also
dropped significantly thanks to mature technology and cheaper deployments
methods adopted such as aerial and wall pinning. Indeed Aerial fibre
deployments are being adopted as the preferred method of rollout in certain
countries not only for last-mile but also for national backbone projects. Drop of
fibre deployment costs now allows operators to pursue expansion of fibre
networks to secondary cities, townships and underserved areas in the leading
markets.
There has been a growing focus by the governments and regulators to
encourage further infrastructure sharing and remove artificial barriers in front of
the fibre network deployments. There were several initiatives ranging from
infrastructure sharing regulations, unified wayleave schemes and rapid
deployment policies. Despite well-intended efforts, enforcement of such policies
and regulations is still not at full force hence achieved limited impact to date.
Source(s):
5
Digital
Council
Africa
Market
Analysis
2021
GSMA, Digitalthings research
CURRENT STATE OF MOBILE CONNECTIVITY - SSA
Nearly half the population remains unconnected in SSA and mobile internet penetration
stood at 30% way below the global average of 55%.
Mobile Subscriptions
• Mobile technology remains the leading method of connectivity for most of the
population and the most widely adopted on the continent. There were approximately
930 million mobile service subscriptions with 83% penetration rate against the
population in Sub-Saharan Africa in 2021.
• However, it should be noted that unique subscriptions were still slightly below 50% and
mobile internet subscriptions stood at 340 million which means only 30% of the Sub-
Saharan African population was able to make use of internet services in 2021. That
means SSA was way behind the global average of 55% mobile internet penetration.
• Globally unique mobile subscriptions have reached to 67% penetration rate at the end
of 2020 and adding new subscribers is increasingly difficult, as markets are becoming
saturated and the economics of reaching rural populations are incrementally
challenging. Nevertheless, Sub-Saharan Africa is expected to add 120 million new
subscribers by 2025, only second to the Asia Pacific region.
165
194
226
257
287
340
2016 2017 2018 2019 2020 2021
Unique Mobile Internet Subscribers in SSA (millions)
SIM Penetration Rate by Country
Source(s):
6
Digital
Council
Africa
Market
Analysis
2021
TowerXchange, Digitalthings research
CURRENT STATE OF TOWER INFRASTRUCTURES - SSA
Infrastructure asset monetization by telcos. are moving beyond the towers
towards fibre and other valuable assets such as data centres.
Globally, telcos are increasingly moving towards asset-light models. MNOs are
monetising their infrastructure assets through carve out into separate entities as a
first step and sale/listing as the second.
Tower sale and leaseback agreements in Africa dates back more than a decade.
Nevertheless, outsourcing of the remaining few valuable tower portfolios by the
MNOs are expected to take place in the coming few years. In addition, asset
monetisation strategies by telcos also started to gain momentum.
MTN, the largest operator in Africa with 280m subscribers in 21 countries, has begun
the journey with a process to outsource its tower portfolio in South Africa, which is
understood to be progressing at the time of writing this report. MTN Group has also
announced a new four-year strategic plan called ‘Ambition 2025’. This will see the
carrier focusing only on regional African dominance and exiting other markets, while
also spinning off other assets such as fibre and financial services businesses into
standalone units. MTN aims to reduce its debt via the spin-offs and divestments from
which it expects to generate $1.68bn. It sold its 49% stake in the Ghana Tower
Interco and Uganda Tower Interco to a subsidiary of American Tower Corporation for
about R7.3-billion in 2020.
Airtel also continued its divestment through the sale of its Chad, Gabon, Madagascar
and Malawi tower portfolios to Helios Towers and Tanzania portfolio to SBA in 2021.
African Infrastructure Investment Managers (AIIM), Adenia Partners and the
International Finance Corporation (IFC) have partnered to invest $130m to acquire a
majority stake in Eastcastle, an African telecoms towerco. Eastcastle’s will pursue a
build-to-suit strategy, to develop new telecom towers initially in the DRC, Nigeria
and Côte d’Ivoire.
Pan-African towerco I H S is pursuing its IPO with a valuation of $7billion and will list
at NY Stock Exchange.
Estimated tower counts for selected countries in SSA
33,873 towers - South Africa
32,069 towers - Nigeria
8,070 towers - Kenya
7,776 towers - Tanzania
7,300 towers - Ethiopia
6,981 towers - Ghana
4,845 towers - DRC
4,400 towers - Mozambique
4,344 towers - Cote d’Ivoire
4,187 towers - Uganda
4,045 towers - Senegal
3,737 towers - Cameroon
3,318 towers - Angola
3,182 towers - Zambia
3,000 towers - Zimbabwe
2,757 towers - Burkina Faso
2,310 towers - Madagascar
2,000 towers - Chad
1,853 towers - Niger
1,300 towers - Rwanda
1,001 towers - Gabon
1,000 towers - Malawi
871 towers - Congo Brazzaville
749 towers - Namibia
As of March 2021, towercos own and manage 40.3%
of Sub-Saharan Africa’s 169,347 telecom towers.
ESCOs manage power at 19,723 sites, for both
towercos and MNOs. 75% of towerco-owned towers
are owned by the big three of IHS Towers, American
Tower and Helios Towers, but a number of
alternative towercos are sprouting up to challenge
and complement the existing hierarchy.
Source(s):
7
Digital
Council
Africa
Market
Analysis
2021
Xalam Analytics, Digitalthings
CURRENT STATE OF DATA CENTRE INFRASTRUCTURE - SSA
Having doubled in the four years to 2020, the continent’s data centre supply is
expected to grow by another 25% in the next two years.
Some of the recent investment activities and announced plans are very encouraging for the
continent.
In 2019, Boston-based private equity firm Berkshire Partners acquired a stake in Teraco Data
Environments, which owns Africa’s largest data centre and powers much of the cloud
computing in South Africa, with the aim of doubling capacity from 30MW to 60MW in the next
few years. Teraco has recently built a new hyperscale data centre in Ekurhuleni.
In March 2020, investment firm Actis announced the launch of a $250 million pan-African data
centre platform, that will comprise independent data centres across key African markets. The
first of these investments were in Nigeria’s Rack Centre.
In 2021, African Infrastructure Investment Managers (AIIM), an infrastructure-focused private
equity firm, acquired a majority stake in Ngoya Etix DC, a carrier-neutral data centre located in
the Greater Accra region of Ghana.
Liquid Intelligent Technologies’ Africa Data Centres, which has earmarked US$1 billion for
expansion across South Africa, Kenya, Nigeria, Ghana and further into Egypt and Morocco,
also recorded an influx in investor interest including US$300 million from the US government’s
International Development Finance Corporation.
Raxio, a pan-African data centre operator, has partnered with French infrastructure
investment firm Meridiam, to deploy a network of data centres. Meridiam will inject $48
million into the venture. Raxio has so far invested in data centre facilities in the Democratic
Republic of Congo, Uganda and Ethiopia.
NTTs first data centre in Africa is currently being built at the Central Point Innovation District
in Johannesburg.
Vantage also announced (Oct) the building of a 1Billion USD DC to be built in Jhb, SA
Each circle represents a data centre facility; circle size reflects the
facility’s relative size.
Africa multi-tenant data centre facilities, 2020
Source(s):
8
Digital
Council
Africa
Market
Analysis
2021
Digitalthings research
CURRENT STATE OF INTERNATIONAL CONNECTIVITY - SSA
Google’s Equiano and Facebook’s 2Africa will not only significantly increase the global network;
but also the commercial pressure on other African cable system operators at a time
when operators need to invest in infrastructure.
The global fibre optic submarine telecommunications cable system market size was valued at 23.4
billion in 2020 and is forecasted to reach USD 37.8 billion by 2027, the expected growth is at a
compound annual growth rate of 7.1% from 2020 to 2027.
Submarine cables, the backbone of digital infrastructure, carries around 90% of data traffic across
the world. The rising demand for data is one of the key factors driving investments by OTTs to
increase the supply of internet through the submarine cables market. Key players of the
submarine cables market are Google, Facebook, Amazon, and Microsoft. Google owns 10,433
miles of submarine cables internationally, and 63,605 miles in consortium with Facebook,
Amazon, and Microsoft. Facebook owns 57,709 miles, Amazon owns 18,987 miles, and Microsoft
owns 4,104 miles of submarine cables.
Google is increasing its footprint in the submarine cable space to guarantee quality access to its
current and future services. Equiano is Google's third private cable, and it will be owned and
operated solely by Google with its consortium of investors. The cable will incorporate optical
switching at the fibre-pair level, rather than the traditional approach of wavelength-level
switching. Using optical switch simplifies the allocation of cable capacity, giving Google the
flexibility to add and reallocate it in different locations as needed. The first phase of the project,
connecting South Africa with Portugal, with a stop in Nigeria is forecast to be finished at the end
of the year 2021.
First launched in May 2020, Facebook’s 2Africa subsea cable will now connect thirty-three
countries in Africa, Europe, Middle East and Asia as per the recent announcement. The expansion
plan will add the new ‘Pearls’ section of the 2Africa project, to link India, Pakistan, Iraq and Saudi
Arabia into the project, improving connection into more regions. This extension will bring the
total length of the 2Africa cable system to more than 45,000 kilometers, making it the longest
subsea cable system ever deployed. The 2Africa cable alone, with a massive potential capacity of
over 180 Tbps over 16 fibre pairs, will double the total internet capacity on the continent once
completed by 2024. The members of the consortium include China Mobile, Facebook, MTN,
Orange, STC, Telecom Egypt, Vodafone and WIOCC.
Current and planned African undersea cables
Source(s):
9
Digital
Council
Africa
Market
Analysis
2021
International Connectivity (Satellite and Undersea Cables)
• South Africa, a country that is not short of submarine cable systems has 7 submarine cable
system with a total design capacity exceeding 70 Tbps in 2021. ACE on the West Coast and
METISS on the East Coast began operational in 2021 adding a total capacity of ~37 Tbps.
• Equiano and 2Africa cable systems are expected to land between 2021 and 2023 and will dwarf
existing cable systems in Africa with a total of 300 Tbps additional design capacity. Arrival of
these new high-capacity cable systems are likely to further decrease the international
connectivity cost and combined with the increase of local data centres (hence more data being
processed and stored locally), some older cable systems might be impacted commercially.
• SpaceX’s Starlink satellite service, with already over 1400 satellites orbiting the earth, is
expected to be available in South Africa by 2022. However, it first has to secure an Individual
Electronic Communications Network Service (I-ECNS) and Individual Electronics Communications
Service licenses. The Starlink system will be priced at $99 per month, with an additional $499 (R7
200) required upfront for the “Starlink Kit”. As the fibre-to-the-home deployments expanding
their reach to underserviced and rural areas, and fixed wireless pricing has been dropping
considerably in recent months, Starlink service might face tough competition on arrival.
• Operators of broadband networks on high-throughput GEO satellites in South Africa include
Yahsat, Avanti, Konnect (Eutelsat) and Intelsat Flex. Liquid Telecom also operates their own
managed networks on a number of satellites.
Landed Year Design Capacity Length
SAT-3/WASC 2002 0.8 Tbps 13,754 km
WACS 2012 14.5 Tbps 14,530 km
SAFE 2002 0.44 Tbps 13,500 km
SEACOM/Tata TGN-Eurasia 2009 6 Tbps 15,000 km
EASSy 2010 11.8 Tbps 10,500 km
ACE 2012/2021 12.8 Tbps 17,184 km
METISS 2021 24 Tbps 3,200 km
Planned Year Design Capacity Length
Equiano 2021 120 Tbps 14,000 km
2Africa 2023 180 Tbps 45,000 km
2Africa
2Africa
SAFE
ACE
WACS
SAT-3/WASC
Equiano
2Africa
SEACOM/Tata TGN-Eurasia
EASSy
2Africa
SAFE
METISS
CURRENT STATE OF INTERNATIONAL CONNECTIVITY - SOUTH AFRICA
South Africa has an advanced and robust submarine cable network connecting it to both East and
West coasts of Africa and onwards.
SubTel Forum, Digitalthings
Source(s):
10
Digital
Council
Africa
Market
Analysis
2021
National Connectivity – Terrestrial Fibre Footprint
• South Africa’s fibre footprint continues to grow as the infrastructure rollouts expand to more locations – reaching
underserved city suburbs and larger towns.
• Openserve, South Africa’s largest fibre footprint owner, has in recent years slowed down the expansion of its fibre
network and instead opted to focus on mobile offerings. Since November 2019, Openserve has only extended its vast
164,000-kilometer fibre network by an additional 1,900km, a growth of just c. 1%.
• Most other fibre players also continued their fibre reach expansion:
o CIVH’s Vumatel has shown a significant increase, growing from 8,000km to 18,000km, while Dark Fibre Africa
(DFA) added c.1,000km.
o MTN grew its fibre network by c. 2,000km
o Metro Fibre Networx, nearly doubled its network 1,500km to 2,700km.
Network Fibre Network
Telkom 165,900km
Vodacom 33,000km*
Liquid Telecom
SA
23,600km
MTN 23,000km
Vumatel 18,000km
Broadband
Infraco
14,863km
DFA 14,000km
Seacom/FibreCo 4,000km*
MetroFibre
Networx
2,700km
* No year-over-year change reported
CURRENT STATE OF TERRESTRIAL CONNECTIVITY – SOUTH AFRICA
Fibre reach and density continuous to grow to enable evolving broadband adoption
and new technology rollouts.
https://afterfibre.nsrc.org/, mybroadband.co.za, company reports
• Government led open access network development projects (metro, provincial and national projects alike) have not seen significant growth since
last year.
• Technology shift towards LTE and recent 5G deployments, and broadband service adoption fuelled by the COVID-19 pandemic, continue to drive
the demand for increased backhaul capacity by the mobile network operators. Currently less than half of the mobile base stations in the country
have fibre backhaul and at least 70% of the mobile base stations will need to be connected with fibre in the next few years.
• After the high court decision to set aside the invitation to apply (ITA), which was published by ICASA late last year, ICASA stated that it will try to
find an out of court settlement with the opposing operators.
• Spectrum auction is expected to be completed by March 2022.
Source(s):
11
Digital
Council
Africa
Market
Analysis
2021
19,3%
19,7%
14,0%
10,9% 10,0%
0
1 000
2 000
3 000
4 000
2017 2018 2019 2020 Mar-21
Fixed
Broadband
Connections
(Thousands)
Fixed Broadband Household Penetration and
Connections by Access Technology Type
FTTH/B FWA*
DSL CABLE
OTHERS 4G/5G FWA
Fixed Broadband Market Trends
• Total number of fixed broadband connections is estimated to reach 3.5 millionin 2021.
• While number of DSL connections declined significantly, fixed LTE and 5G adoption has continued their growth. There
are estimated c.1.65 million Fixed-LTE & 5G wireless access connections (which is shown in dotted bars but not included
in the penetration rate in the graph on the left).
• The average connection speed for fixed broadband internet was 50,45 Mbps for download and 37.35 Mbps for upload;
and for mobile broadband internet it was 47.15 Mbps for download and 11.48 Mbps for upload in July 2021 as per
OOKLA, Speedtest index. It is interesting to note that fixed and mobile internet speeds were not distinctly separated for
download speeds, however fixed broadband download performance was three times better than mobile broadband.
• During 2021, most of the fibre network operators upgraded their subscriber lines without additional charges (e.g.
10Mbps was upgraded to 25Mbps, 20Mbps was upgraded to 50Mbps, 50Mbps was upgraded to 100Mbps, and
100Mbps clients were upgraded to 200Mbps). However, majority of the FTTH subscriptions still remain below 100
Mbps.
DSL
• In line with the phase-out plan of Openserve, the gradual shut down of ADSL lines in a variety of areas around the
country resulted in the decline of the DSL subscriptions. Just over 320 thousand subscriptions were left to be
decommissioned as per Telkom’s annual report. The subscribers moved to fibre and fixed wireless broadband
alternatives offered by various service providers.
FTTH/B
• Remote working, studying and online lifestyle habits due to the COVID-19 has fuelled the fibre-to-the home service
adoption resulting in significant growth in FTTx subscriptions (from 762K in 2020 to 1.16 million in 2021). The fibre
deployments continued to expand into the underservices areas, medium and large towns. Built-to-transfer model has
accelerated the fibre network expansion pace in the wider geography of the country.
• The service uptake rate also grew to over 45% (Openserve reported 51.1%) which is contributed by COVID 19 as many
people needed reliableconnectivity for working and schooling from home.
Fixed Wireless
• The traditional (unlicensed) fixed wireless access connections were ~270 thousand in 2021 and have not changed
significantlyyear-over-year.
• Mobile Network Operators have been pushing Fixed LTE/5G products to capture shifting DSL subscribers and monetize
their investments as 4G mobile subscriptions remain low with just over one-third of the total mobile subscriptions.
*excludes mobile FWA (3G, 4G, 5G)
272 499 701 762 1 162
906 1 472 1 748 1 851 2 562
30% 34% 40%
4… 45%
2017 2018 2019 2020 Mar-21
FTTH Connections and Homes Passed (‘000s)
(2017-2021)
FTTH connections Homes Passed Connectivity rate
CURRENT STATE OF FIXED ACCESS CONNECTIVITY – SOUTH AFRICA
Fixed broadband penetration has continued growing particularly with the adoption of fibre and
4G/5G FWA technologies, replacing DSL lines.
TeleGeography, Digitalthings analysis
Source(s):
12
Digital
Council
Africa
Market
Analysis
2021
United Nations, TowerXchange, GSMA, Digitalthings analysis
Despite the limited presence of towercos in the country, South Africa has a high degree of co-location achieved between the MNOs through barter like trades. RAN sharing arrangements and
reduction of RAN owners (e.g. Cell C) combined with delayed spectrum auction are likely to limit macro site demand. MTN is in the process of outsourcing part of its tower portfolio which is
understood to be at an advanced stage. Gyro also seems to be considering outsourcing its tower portfolio, however no concrete plans have been announced yet. Vodacom has developed a
successful commercial towerco business model in house, including a platform on which other frequency holders can view available space on Vodacom sites.
Unlike the majority of their sub-Saharan African counterparts, South Africa’s towercos tend to operate a steel and grass model more akin to the developed markets of Europe and the U.S.
with power managed as a pass-through.
CURRENT STATE OF TOWER INFRASTRUCTURES - SOUTH AFRICA
South Africa can be considered a mature market in terms of infrastructure sharing, with the
ownership of more towers are expected to shift to independent towercos in the coming years.
SUBSCRIBERS
TOWERS POPULATION M. SUBSCRIBERS SIMS PER TOWERS SIM PENETRATION MNOs TOWERCOs ESCOS
33,873 58,558,000 96,972,000 2,862 166% 5 10+ 1
MTN (13,000)
Vodacom (9000)
Gyro Group (6500)
American Tower
(2831)
SBACommunications
: 1095
Cell C: 700
Sentech: 240
Helios Towers:236
Other smaller
towercos:235
South Africa has a
population density of
47 people per sqkm
which is slightly higher
than the SSA average
of 45.
South Africa has a
mature mobile market
with a high number of
subscriptions due to
multi-SIM ownership
and developing IoT
connections.
South Africa’s Sim per
tower ratio can be
considered as
moderate and better
than most other
countries covered in
this report.
No only sim
penetration but also
mobile broadband
penetration at 125% is
high and indicates a
mature market.
New technology
deployments such as
5G is expected to drive
demand for small cells
and indoor coverage
networks.
South Africa has 5
Mobile Network
Operators.
1. MTN
2. Vodacom
3. Telkom
4. Cell C
5. Rain
1. American Tower
2. SBA
Communications
3. Helios Towers
4. Gyro
5. Sentech
6. >10 other smaller
towercos
South Africa has one
EsCo Abbott
Technologies.
Vodacom issued a
1,140 site ESCO
RFP.
Source(s):
13
Digital
Council
Africa
Market
Analysis
2021
Operator Number of Centers
Business Connexion
Johannesburg (2)
Cape Town (2)
Durban (1)
Mpumalanga(2)
Sasolburg (1)
Pretoria (1)
Midrand (1)
Internet Solutions
Johannesburg (4)
Cape Town (1)
Durban (1)
Port Elizabeth (1)
East London (1)
Bloemfontein(1)
Teraco
Johannesburg (3)
Cape Town (1)
Durban (1)
Africa Data Centres
Johannesburg (2)
Cape Town (1)
Vox Telecom
Johannesburg (1)
Cape Town (1)
JSE Johannesburg (1)
Digital Parks Africa Midrand (1)
Continuity SA
Johannesburg (2)
Cape Town (1)
Midrand (1)
MTN Johannesburg (1)
Vodafone Johannesburg (1)
Co-location data centres in South Africa
• South Africa ranks number 25 globally on Cloudscene based on data centre density.
• African vendor-neutral data centre and interconnection services provider Teraco Data Environments Proprietary Limited completed its
JB3 data centre facility, sited on the Isando Campus in Ekurhuleni, east of Johannesburg. JB3 comprises 45,000 square metres of building
structure, 12,000 square metres of data hall space, and 29MW of critical power load. When combined with the existing Isando Campus
facilities, the critical power load totals 40MW across the campus data centre footprint – with capacity for further growth. The company
broke ground on its 50,000 square metre JB4 facility in November 2020 when completed in Q1 2022 centre due for completion in Q1
2022, will up be the largest single-site data centre on the African continent, taking Teraco’s capacity to over 110MW.
• Aside from JB4, the company operates the Isando Campus JB1/JB3 (39MW), Bredell JB2 (13MW), Rondebosch
Cape Town CT1 (3MW), Brackenfell Cape Town CT2 (18MW), and Durban (1MW).
Cape Town
Johannesburg
/Midrand
Durban
Mpumalanga
Pretoria
Port Elizabeth
Sasolburg
East London
Bloemfontein
Key data centre hubs
data centre location
CURRENT STATE OF DATA CENTRE INFRASTRUCTURE – SOUTH AFRICA
Massive investments and large-scale data centre projects have continued to expand
already mature data centre environment in South Africa.
Digitalthings research
• NTT Ltd., a world-leading global technology services provider and Dimension Data, the
South African systems integrator and managed services provider which represents the
NTT business in the Middle East and Africa, announced that construction work for their
Johannesburg 1 data centre has commenced during late 2020. The data centre design
is based on tier 3 standards and will be constructed in two phases. When fully built it
will deliver a total of 6,000 sqm of IT space and 12 MW of IT load. The first phase of the
site is scheduled to become operational in the beginning of 2022.
• In May 2020, Africa Data Centres, part of the Liquid Telecom Group, completed the
acquisition of a state-of-the-art tier IV data centre in Johannesburg from Standard
Bank. Liquid Telecom also announced its ADC expansion plan in South Africa and other
countries in Africa with a $300million investment earmarked.
• AWS region in Cape Town was launched last year, as well as other major cloud players
including MS Azure, Oracle and Huawei launching their cloud services in the country in
recent years.
• At the writing of this report Vantage, a leading global provider of hyperscale data
centre campuses, announced that it has begun construction of its first African campus
in Johannesburg, South Africa, leveraging a US$1 billion investment from existing
financial partners. The 80MW campus will be in Johannesburg’s Waterfall City.
Africa Digital Infrastructure Market Analysis 2021 Report Summary

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Africa Digital Infrastructure Market Analysis 2021 Report Summary

  • 2. Established in 2010 under the banner of the FTTx Council Africa, the Digital Council is an independent, not for profit organisation that seeks dialogue with all stakeholders to discuss how to maximise the societal benefits of digital and data-driven technologies to increase equality and inclusivity, wellbeing and digital adoption. In turn, we support government with issues such as policy and regulation, best practice and minimum standards through an independent voice. Member engagement is encouraged through participation in events and working groups. We offer members an opportunity to network and collaborate and discuss best practice frameworks that are in the best interest of all, solving complex issues through dialogue and policy adoption. Furthermore, we encourage dialogue between government and the private sector from a platform that is independent and product agnostic. In addition, our mission is to see broad-based investment in digital skills by all stakeholders, thereby enhancing the lives of all people living on the continent of Africa. The Digital Council Africa believes that the development and deployment of digital access will enhance the quality of life for citizens in South Africa and Africa as a whole, providing African countries with a digital footprint that will increase their effectiveness and competitiveness within the global marketplace. The council’s charter is to educate Africa governments, policy makers and political leaders on technology and data issues facing the continent. Further, we seek to develop methods as to how digital connectivity and services can be delivered to citizens within the coming years. Through consultation with all major stakeholders and understanding their strategies and concerns, we endeavour to be the voice of the industry and to help create a better future for all involved. For information on membership visit www.digitalcouncil.africa ABOUT DIGITAL COUNCIL AFRICA
  • 3. Source(s): 3 Digital Council Africa Market Analysis 2021 Digitalthings EXECUTIVE SUMMARY Digital infrastructure investments and infrastructure sharing initiatives in the last year is encouraging, however, Sub-Saharan Africa needs more decisive and swift action from the industry stakeholders to bridge the digital divide. The digital economy is essential to meet the requirements of a new, post Covid digital world. Today it is widely accepted that the digital economy has the potential to create jobs, alleviates poverty, and enhances the region’s competitiveness through digital transformation of all sectors of an economy, from healthcare to education, agriculture to trade and fintech, among others. However, it goes without saying that a digital economy requires a modern and robust digital infrastructure that is inclusive and reaches all people to allow access for participation. Unfortunately, to date digital infrastructure developments has been relatively slow and given the historic deficit, the gap between Sub-Saharan Africa and the developed economies are widening. While Africa’s infrastructure challenge is not a new one, it’s the most significant barrier on the continent among others including but not limited to broadband service quality, affordability (both of service and handsets), the policy, regulatory and fiscal environment, the status of digital skills, gender, age, education and more. On the positive side, ICT has been one of the most dynamic and resilient sectors on the continent not only surviving but also enabling other industries to survive the catastrophic impacts of the COVID-19 pandemic. It is also one of the leading sectors that attracts foreign direct investment to international investors and development institutions who are looking to unlock value by bridging the digital divide and enabling innovative service models. As a result, there is a renewed wave of investments in Africa by the hyperscalers, infrastructure operators and investors alike, for digital infrastructure assets ranging from enormous submarine cable systems such as Equiano and 2Africa, to new data centres and towers. Especially noteworthy is the increased level of infrastructure sharing initiatives by the network operators as their business model and focus continues to shift from traditional communication services (voice, data and messaging) to become providers of a wide range of digital lifestyle services (e.g. financial, insurance, banking, entertainment, IT, and many other). Pan-African operators continue to monetise their assets indifferent ways. For example, Airtel has continued to outsource its tower portfolio in various countries including Madagascar, Malawi, Gabon, Chad and Tanzania in transactions with Helios Towers and SBA. On the other hand, Orange and MTN are pursuing their plans to create their own infrastructure companies to leverage existing assets (e.g. fibre and data centres) to offer open-access services to other operators. Existing infrastructure operators have not only continued to expand their footprint but also diversify asset class to new infrastructure- by example Liquid Intelligent Technologies who has carved out the data centre assets to a new independent entity, Africa Data Centres, and announced a massive expansion plan on the continent. Teraco and MainOne are other major players who have recently completed large scale data centre deployments and announced further expansion plans of their data centre portfolios on the continent with the latest market entry the announcement of the new Vantage Datacentre to be built in Johannesburg, South Africa.
  • 4. Source(s): 4 Digital Council Africa Market Analysis 2021 CURRENT STATE OF FIXED ACCESS CONNECTIVITY - SSA FTTH/B remains a niche fixed broadband technology in SSA, nevertheless rollouts are shifting towards secondary cities and major towns in leading markets as urban coverage matures. 0.06% 0.00% 0.01% 0.09% 0.02% 2.14% 0.06% 0.03% 0.18% 0.07% 2.00% 1.48% 0.12% 1.76% 0.16% 0.04% 0.09% 1.39% 1.45% 1.13% 19.30% 1.00% 0.22% 3.62% 1.64% 87.71% 3.44% 6.55% 0 200 400 600 800 1000 1200 1400 Comoros Niger Mali Equatorial Guinea Somalia Sao Tome and Principe Benin Malawi Liberia Rwanda Cape Verde Gabon Cameroon Namibia Mozambique Nigeria Madagascar Togo Zimbabwe CĂ´te d'Ivoire RĂŠunion Angola Ghana Senegal Tanzania Mauritius Kenya South Africa Thousands Sub-Saharan Africa FTTH/B Connections and Household Penetration Rates by Country FTTH/B In most markets in SSA, fibre-based broadband service offerings remains a niche service focused on main cities and urban areas. The overall household penetration of fibre based broadband services remains below 2% in most SSA countries with the exception of the leading markets such as Mauritius, South Africa and Kenya. South Africa is the only country in Sub-Saharan Africa that exceeded 1 million fibre broadband subscribers as of 2021, while Mauritius has achieved almost ubiquitous fibre coverage with over 87% of the households enjoying the fibre- based broadband service. As the fibre penetration evolved, the cost of last-mile fibre deployments has also dropped significantly thanks to mature technology and cheaper deployments methods adopted such as aerial and wall pinning. Indeed Aerial fibre deployments are being adopted as the preferred method of rollout in certain countries not only for last-mile but also for national backbone projects. Drop of fibre deployment costs now allows operators to pursue expansion of fibre networks to secondary cities, townships and underserved areas in the leading markets. There has been a growing focus by the governments and regulators to encourage further infrastructure sharing and remove artificial barriers in front of the fibre network deployments. There were several initiatives ranging from infrastructure sharing regulations, unified wayleave schemes and rapid deployment policies. Despite well-intended efforts, enforcement of such policies and regulations is still not at full force hence achieved limited impact to date.
  • 5. Source(s): 5 Digital Council Africa Market Analysis 2021 GSMA, Digitalthings research CURRENT STATE OF MOBILE CONNECTIVITY - SSA Nearly half the population remains unconnected in SSA and mobile internet penetration stood at 30% way below the global average of 55%. Mobile Subscriptions • Mobile technology remains the leading method of connectivity for most of the population and the most widely adopted on the continent. There were approximately 930 million mobile service subscriptions with 83% penetration rate against the population in Sub-Saharan Africa in 2021. • However, it should be noted that unique subscriptions were still slightly below 50% and mobile internet subscriptions stood at 340 million which means only 30% of the Sub- Saharan African population was able to make use of internet services in 2021. That means SSA was way behind the global average of 55% mobile internet penetration. • Globally unique mobile subscriptions have reached to 67% penetration rate at the end of 2020 and adding new subscribers is increasingly difficult, as markets are becoming saturated and the economics of reaching rural populations are incrementally challenging. Nevertheless, Sub-Saharan Africa is expected to add 120 million new subscribers by 2025, only second to the Asia Pacific region. 165 194 226 257 287 340 2016 2017 2018 2019 2020 2021 Unique Mobile Internet Subscribers in SSA (millions) SIM Penetration Rate by Country
  • 6. Source(s): 6 Digital Council Africa Market Analysis 2021 TowerXchange, Digitalthings research CURRENT STATE OF TOWER INFRASTRUCTURES - SSA Infrastructure asset monetization by telcos. are moving beyond the towers towards fibre and other valuable assets such as data centres. Globally, telcos are increasingly moving towards asset-light models. MNOs are monetising their infrastructure assets through carve out into separate entities as a first step and sale/listing as the second. Tower sale and leaseback agreements in Africa dates back more than a decade. Nevertheless, outsourcing of the remaining few valuable tower portfolios by the MNOs are expected to take place in the coming few years. In addition, asset monetisation strategies by telcos also started to gain momentum. MTN, the largest operator in Africa with 280m subscribers in 21 countries, has begun the journey with a process to outsource its tower portfolio in South Africa, which is understood to be progressing at the time of writing this report. MTN Group has also announced a new four-year strategic plan called ‘Ambition 2025’. This will see the carrier focusing only on regional African dominance and exiting other markets, while also spinning off other assets such as fibre and financial services businesses into standalone units. MTN aims to reduce its debt via the spin-offs and divestments from which it expects to generate $1.68bn. It sold its 49% stake in the Ghana Tower Interco and Uganda Tower Interco to a subsidiary of American Tower Corporation for about R7.3-billion in 2020. Airtel also continued its divestment through the sale of its Chad, Gabon, Madagascar and Malawi tower portfolios to Helios Towers and Tanzania portfolio to SBA in 2021. African Infrastructure Investment Managers (AIIM), Adenia Partners and the International Finance Corporation (IFC) have partnered to invest $130m to acquire a majority stake in Eastcastle, an African telecoms towerco. Eastcastle’s will pursue a build-to-suit strategy, to develop new telecom towers initially in the DRC, Nigeria and CĂ´te d’Ivoire. Pan-African towerco I H S is pursuing its IPO with a valuation of $7billion and will list at NY Stock Exchange. Estimated tower counts for selected countries in SSA 33,873 towers - South Africa 32,069 towers - Nigeria 8,070 towers - Kenya 7,776 towers - Tanzania 7,300 towers - Ethiopia 6,981 towers - Ghana 4,845 towers - DRC 4,400 towers - Mozambique 4,344 towers - Cote d’Ivoire 4,187 towers - Uganda 4,045 towers - Senegal 3,737 towers - Cameroon 3,318 towers - Angola 3,182 towers - Zambia 3,000 towers - Zimbabwe 2,757 towers - Burkina Faso 2,310 towers - Madagascar 2,000 towers - Chad 1,853 towers - Niger 1,300 towers - Rwanda 1,001 towers - Gabon 1,000 towers - Malawi 871 towers - Congo Brazzaville 749 towers - Namibia As of March 2021, towercos own and manage 40.3% of Sub-Saharan Africa’s 169,347 telecom towers. ESCOs manage power at 19,723 sites, for both towercos and MNOs. 75% of towerco-owned towers are owned by the big three of IHS Towers, American Tower and Helios Towers, but a number of alternative towercos are sprouting up to challenge and complement the existing hierarchy.
  • 7. Source(s): 7 Digital Council Africa Market Analysis 2021 Xalam Analytics, Digitalthings CURRENT STATE OF DATA CENTRE INFRASTRUCTURE - SSA Having doubled in the four years to 2020, the continent’s data centre supply is expected to grow by another 25% in the next two years. Some of the recent investment activities and announced plans are very encouraging for the continent. In 2019, Boston-based private equity firm Berkshire Partners acquired a stake in Teraco Data Environments, which owns Africa’s largest data centre and powers much of the cloud computing in South Africa, with the aim of doubling capacity from 30MW to 60MW in the next few years. Teraco has recently built a new hyperscale data centre in Ekurhuleni. In March 2020, investment firm Actis announced the launch of a $250 million pan-African data centre platform, that will comprise independent data centres across key African markets. The first of these investments were in Nigeria’s Rack Centre. In 2021, African Infrastructure Investment Managers (AIIM), an infrastructure-focused private equity firm, acquired a majority stake in Ngoya Etix DC, a carrier-neutral data centre located in the Greater Accra region of Ghana. Liquid Intelligent Technologies’ Africa Data Centres, which has earmarked US$1 billion for expansion across South Africa, Kenya, Nigeria, Ghana and further into Egypt and Morocco, also recorded an influx in investor interest including US$300 million from the US government’s International Development Finance Corporation. Raxio, a pan-African data centre operator, has partnered with French infrastructure investment firm Meridiam, to deploy a network of data centres. Meridiam will inject $48 million into the venture. Raxio has so far invested in data centre facilities in the Democratic Republic of Congo, Uganda and Ethiopia. NTTs first data centre in Africa is currently being built at the Central Point Innovation District in Johannesburg. Vantage also announced (Oct) the building of a 1Billion USD DC to be built in Jhb, SA Each circle represents a data centre facility; circle size reflects the facility’s relative size. Africa multi-tenant data centre facilities, 2020
  • 8. Source(s): 8 Digital Council Africa Market Analysis 2021 Digitalthings research CURRENT STATE OF INTERNATIONAL CONNECTIVITY - SSA Google’s Equiano and Facebook’s 2Africa will not only significantly increase the global network; but also the commercial pressure on other African cable system operators at a time when operators need to invest in infrastructure. The global fibre optic submarine telecommunications cable system market size was valued at 23.4 billion in 2020 and is forecasted to reach USD 37.8 billion by 2027, the expected growth is at a compound annual growth rate of 7.1% from 2020 to 2027. Submarine cables, the backbone of digital infrastructure, carries around 90% of data traffic across the world. The rising demand for data is one of the key factors driving investments by OTTs to increase the supply of internet through the submarine cables market. Key players of the submarine cables market are Google, Facebook, Amazon, and Microsoft. Google owns 10,433 miles of submarine cables internationally, and 63,605 miles in consortium with Facebook, Amazon, and Microsoft. Facebook owns 57,709 miles, Amazon owns 18,987 miles, and Microsoft owns 4,104 miles of submarine cables. Google is increasing its footprint in the submarine cable space to guarantee quality access to its current and future services. Equiano is Google's third private cable, and it will be owned and operated solely by Google with its consortium of investors. The cable will incorporate optical switching at the fibre-pair level, rather than the traditional approach of wavelength-level switching. Using optical switch simplifies the allocation of cable capacity, giving Google the flexibility to add and reallocate it in different locations as needed. The first phase of the project, connecting South Africa with Portugal, with a stop in Nigeria is forecast to be finished at the end of the year 2021. First launched in May 2020, Facebook’s 2Africa subsea cable will now connect thirty-three countries in Africa, Europe, Middle East and Asia as per the recent announcement. The expansion plan will add the new ‘Pearls’ section of the 2Africa project, to link India, Pakistan, Iraq and Saudi Arabia into the project, improving connection into more regions. This extension will bring the total length of the 2Africa cable system to more than 45,000 kilometers, making it the longest subsea cable system ever deployed. The 2Africa cable alone, with a massive potential capacity of over 180 Tbps over 16 fibre pairs, will double the total internet capacity on the continent once completed by 2024. The members of the consortium include China Mobile, Facebook, MTN, Orange, STC, Telecom Egypt, Vodafone and WIOCC. Current and planned African undersea cables
  • 9. Source(s): 9 Digital Council Africa Market Analysis 2021 International Connectivity (Satellite and Undersea Cables) • South Africa, a country that is not short of submarine cable systems has 7 submarine cable system with a total design capacity exceeding 70 Tbps in 2021. ACE on the West Coast and METISS on the East Coast began operational in 2021 adding a total capacity of ~37 Tbps. • Equiano and 2Africa cable systems are expected to land between 2021 and 2023 and will dwarf existing cable systems in Africa with a total of 300 Tbps additional design capacity. Arrival of these new high-capacity cable systems are likely to further decrease the international connectivity cost and combined with the increase of local data centres (hence more data being processed and stored locally), some older cable systems might be impacted commercially. • SpaceX’s Starlink satellite service, with already over 1400 satellites orbiting the earth, is expected to be available in South Africa by 2022. However, it first has to secure an Individual Electronic Communications Network Service (I-ECNS) and Individual Electronics Communications Service licenses. The Starlink system will be priced at $99 per month, with an additional $499 (R7 200) required upfront for the “Starlink Kit”. As the fibre-to-the-home deployments expanding their reach to underserviced and rural areas, and fixed wireless pricing has been dropping considerably in recent months, Starlink service might face tough competition on arrival. • Operators of broadband networks on high-throughput GEO satellites in South Africa include Yahsat, Avanti, Konnect (Eutelsat) and Intelsat Flex. Liquid Telecom also operates their own managed networks on a number of satellites. Landed Year Design Capacity Length SAT-3/WASC 2002 0.8 Tbps 13,754 km WACS 2012 14.5 Tbps 14,530 km SAFE 2002 0.44 Tbps 13,500 km SEACOM/Tata TGN-Eurasia 2009 6 Tbps 15,000 km EASSy 2010 11.8 Tbps 10,500 km ACE 2012/2021 12.8 Tbps 17,184 km METISS 2021 24 Tbps 3,200 km Planned Year Design Capacity Length Equiano 2021 120 Tbps 14,000 km 2Africa 2023 180 Tbps 45,000 km 2Africa 2Africa SAFE ACE WACS SAT-3/WASC Equiano 2Africa SEACOM/Tata TGN-Eurasia EASSy 2Africa SAFE METISS CURRENT STATE OF INTERNATIONAL CONNECTIVITY - SOUTH AFRICA South Africa has an advanced and robust submarine cable network connecting it to both East and West coasts of Africa and onwards. SubTel Forum, Digitalthings
  • 10. Source(s): 10 Digital Council Africa Market Analysis 2021 National Connectivity – Terrestrial Fibre Footprint • South Africa’s fibre footprint continues to grow as the infrastructure rollouts expand to more locations – reaching underserved city suburbs and larger towns. • Openserve, South Africa’s largest fibre footprint owner, has in recent years slowed down the expansion of its fibre network and instead opted to focus on mobile offerings. Since November 2019, Openserve has only extended its vast 164,000-kilometer fibre network by an additional 1,900km, a growth of just c. 1%. • Most other fibre players also continued their fibre reach expansion: o CIVH’s Vumatel has shown a significant increase, growing from 8,000km to 18,000km, while Dark Fibre Africa (DFA) added c.1,000km. o MTN grew its fibre network by c. 2,000km o Metro Fibre Networx, nearly doubled its network 1,500km to 2,700km. Network Fibre Network Telkom 165,900km Vodacom 33,000km* Liquid Telecom SA 23,600km MTN 23,000km Vumatel 18,000km Broadband Infraco 14,863km DFA 14,000km Seacom/FibreCo 4,000km* MetroFibre Networx 2,700km * No year-over-year change reported CURRENT STATE OF TERRESTRIAL CONNECTIVITY – SOUTH AFRICA Fibre reach and density continuous to grow to enable evolving broadband adoption and new technology rollouts. https://afterfibre.nsrc.org/, mybroadband.co.za, company reports • Government led open access network development projects (metro, provincial and national projects alike) have not seen significant growth since last year. • Technology shift towards LTE and recent 5G deployments, and broadband service adoption fuelled by the COVID-19 pandemic, continue to drive the demand for increased backhaul capacity by the mobile network operators. Currently less than half of the mobile base stations in the country have fibre backhaul and at least 70% of the mobile base stations will need to be connected with fibre in the next few years. • After the high court decision to set aside the invitation to apply (ITA), which was published by ICASA late last year, ICASA stated that it will try to find an out of court settlement with the opposing operators. • Spectrum auction is expected to be completed by March 2022.
  • 11. Source(s): 11 Digital Council Africa Market Analysis 2021 19,3% 19,7% 14,0% 10,9% 10,0% 0 1 000 2 000 3 000 4 000 2017 2018 2019 2020 Mar-21 Fixed Broadband Connections (Thousands) Fixed Broadband Household Penetration and Connections by Access Technology Type FTTH/B FWA* DSL CABLE OTHERS 4G/5G FWA Fixed Broadband Market Trends • Total number of fixed broadband connections is estimated to reach 3.5 millionin 2021. • While number of DSL connections declined significantly, fixed LTE and 5G adoption has continued their growth. There are estimated c.1.65 million Fixed-LTE & 5G wireless access connections (which is shown in dotted bars but not included in the penetration rate in the graph on the left). • The average connection speed for fixed broadband internet was 50,45 Mbps for download and 37.35 Mbps for upload; and for mobile broadband internet it was 47.15 Mbps for download and 11.48 Mbps for upload in July 2021 as per OOKLA, Speedtest index. It is interesting to note that fixed and mobile internet speeds were not distinctly separated for download speeds, however fixed broadband download performance was three times better than mobile broadband. • During 2021, most of the fibre network operators upgraded their subscriber lines without additional charges (e.g. 10Mbps was upgraded to 25Mbps, 20Mbps was upgraded to 50Mbps, 50Mbps was upgraded to 100Mbps, and 100Mbps clients were upgraded to 200Mbps). However, majority of the FTTH subscriptions still remain below 100 Mbps. DSL • In line with the phase-out plan of Openserve, the gradual shut down of ADSL lines in a variety of areas around the country resulted in the decline of the DSL subscriptions. Just over 320 thousand subscriptions were left to be decommissioned as per Telkom’s annual report. The subscribers moved to fibre and fixed wireless broadband alternatives offered by various service providers. FTTH/B • Remote working, studying and online lifestyle habits due to the COVID-19 has fuelled the fibre-to-the home service adoption resulting in significant growth in FTTx subscriptions (from 762K in 2020 to 1.16 million in 2021). The fibre deployments continued to expand into the underservices areas, medium and large towns. Built-to-transfer model has accelerated the fibre network expansion pace in the wider geography of the country. • The service uptake rate also grew to over 45% (Openserve reported 51.1%) which is contributed by COVID 19 as many people needed reliableconnectivity for working and schooling from home. Fixed Wireless • The traditional (unlicensed) fixed wireless access connections were ~270 thousand in 2021 and have not changed significantlyyear-over-year. • Mobile Network Operators have been pushing Fixed LTE/5G products to capture shifting DSL subscribers and monetize their investments as 4G mobile subscriptions remain low with just over one-third of the total mobile subscriptions. *excludes mobile FWA (3G, 4G, 5G) 272 499 701 762 1 162 906 1 472 1 748 1 851 2 562 30% 34% 40% 4… 45% 2017 2018 2019 2020 Mar-21 FTTH Connections and Homes Passed (‘000s) (2017-2021) FTTH connections Homes Passed Connectivity rate CURRENT STATE OF FIXED ACCESS CONNECTIVITY – SOUTH AFRICA Fixed broadband penetration has continued growing particularly with the adoption of fibre and 4G/5G FWA technologies, replacing DSL lines. TeleGeography, Digitalthings analysis
  • 12. Source(s): 12 Digital Council Africa Market Analysis 2021 United Nations, TowerXchange, GSMA, Digitalthings analysis Despite the limited presence of towercos in the country, South Africa has a high degree of co-location achieved between the MNOs through barter like trades. RAN sharing arrangements and reduction of RAN owners (e.g. Cell C) combined with delayed spectrum auction are likely to limit macro site demand. MTN is in the process of outsourcing part of its tower portfolio which is understood to be at an advanced stage. Gyro also seems to be considering outsourcing its tower portfolio, however no concrete plans have been announced yet. Vodacom has developed a successful commercial towerco business model in house, including a platform on which other frequency holders can view available space on Vodacom sites. Unlike the majority of their sub-Saharan African counterparts, South Africa’s towercos tend to operate a steel and grass model more akin to the developed markets of Europe and the U.S. with power managed as a pass-through. CURRENT STATE OF TOWER INFRASTRUCTURES - SOUTH AFRICA South Africa can be considered a mature market in terms of infrastructure sharing, with the ownership of more towers are expected to shift to independent towercos in the coming years. SUBSCRIBERS TOWERS POPULATION M. SUBSCRIBERS SIMS PER TOWERS SIM PENETRATION MNOs TOWERCOs ESCOS 33,873 58,558,000 96,972,000 2,862 166% 5 10+ 1 MTN (13,000) Vodacom (9000) Gyro Group (6500) American Tower (2831) SBACommunications : 1095 Cell C: 700 Sentech: 240 Helios Towers:236 Other smaller towercos:235 South Africa has a population density of 47 people per sqkm which is slightly higher than the SSA average of 45. South Africa has a mature mobile market with a high number of subscriptions due to multi-SIM ownership and developing IoT connections. South Africa’s Sim per tower ratio can be considered as moderate and better than most other countries covered in this report. No only sim penetration but also mobile broadband penetration at 125% is high and indicates a mature market. New technology deployments such as 5G is expected to drive demand for small cells and indoor coverage networks. South Africa has 5 Mobile Network Operators. 1. MTN 2. Vodacom 3. Telkom 4. Cell C 5. Rain 1. American Tower 2. SBA Communications 3. Helios Towers 4. Gyro 5. Sentech 6. >10 other smaller towercos South Africa has one EsCo Abbott Technologies. Vodacom issued a 1,140 site ESCO RFP.
  • 13. Source(s): 13 Digital Council Africa Market Analysis 2021 Operator Number of Centers Business Connexion Johannesburg (2) Cape Town (2) Durban (1) Mpumalanga(2) Sasolburg (1) Pretoria (1) Midrand (1) Internet Solutions Johannesburg (4) Cape Town (1) Durban (1) Port Elizabeth (1) East London (1) Bloemfontein(1) Teraco Johannesburg (3) Cape Town (1) Durban (1) Africa Data Centres Johannesburg (2) Cape Town (1) Vox Telecom Johannesburg (1) Cape Town (1) JSE Johannesburg (1) Digital Parks Africa Midrand (1) Continuity SA Johannesburg (2) Cape Town (1) Midrand (1) MTN Johannesburg (1) Vodafone Johannesburg (1) Co-location data centres in South Africa • South Africa ranks number 25 globally on Cloudscene based on data centre density. • African vendor-neutral data centre and interconnection services provider Teraco Data Environments Proprietary Limited completed its JB3 data centre facility, sited on the Isando Campus in Ekurhuleni, east of Johannesburg. JB3 comprises 45,000 square metres of building structure, 12,000 square metres of data hall space, and 29MW of critical power load. When combined with the existing Isando Campus facilities, the critical power load totals 40MW across the campus data centre footprint – with capacity for further growth. The company broke ground on its 50,000 square metre JB4 facility in November 2020 when completed in Q1 2022 centre due for completion in Q1 2022, will up be the largest single-site data centre on the African continent, taking Teraco’s capacity to over 110MW. • Aside from JB4, the company operates the Isando Campus JB1/JB3 (39MW), Bredell JB2 (13MW), Rondebosch Cape Town CT1 (3MW), Brackenfell Cape Town CT2 (18MW), and Durban (1MW). Cape Town Johannesburg /Midrand Durban Mpumalanga Pretoria Port Elizabeth Sasolburg East London Bloemfontein Key data centre hubs data centre location CURRENT STATE OF DATA CENTRE INFRASTRUCTURE – SOUTH AFRICA Massive investments and large-scale data centre projects have continued to expand already mature data centre environment in South Africa. Digitalthings research • NTT Ltd., a world-leading global technology services provider and Dimension Data, the South African systems integrator and managed services provider which represents the NTT business in the Middle East and Africa, announced that construction work for their Johannesburg 1 data centre has commenced during late 2020. The data centre design is based on tier 3 standards and will be constructed in two phases. When fully built it will deliver a total of 6,000 sqm of IT space and 12 MW of IT load. The first phase of the site is scheduled to become operational in the beginning of 2022. • In May 2020, Africa Data Centres, part of the Liquid Telecom Group, completed the acquisition of a state-of-the-art tier IV data centre in Johannesburg from Standard Bank. Liquid Telecom also announced its ADC expansion plan in South Africa and other countries in Africa with a $300million investment earmarked. • AWS region in Cape Town was launched last year, as well as other major cloud players including MS Azure, Oracle and Huawei launching their cloud services in the country in recent years. • At the writing of this report Vantage, a leading global provider of hyperscale data centre campuses, announced that it has begun construction of its first African campus in Johannesburg, South Africa, leveraging a US$1 billion investment from existing financial partners. The 80MW campus will be in Johannesburg’s Waterfall City.