A Booming Market in the Developed World
Broadband Internet - an "always on" Internet connection enabling high speed1 downloads and uploads of digital content and services- has been heralded as the elixir which will counter stagnant voice revenues, slowing mobile growth and delays to rollout of new revenue-generating mobile services amongst the world's big name operators. In developed markets, growth rates for broadband- albeit from a small base- have skyrocketed in recent years. Global broadband subscriber numbers saw a 72% increase during 2002 to reach 63 million by the end of the year, according to ITU. Although broadband markets are still at an early stage of growth, rapid take up of the service suggests there is much potential in the market.
Broadband rollout has been helped by a raft of different infrastructure solutions which "deliver" broadband to end users. DSL (Digital Subscriber Line) technologies are the most popular, while cable networks also have a strong showing. Wireless technologies are also beginning to make their mark with vigorous rollouts of WiFi (IEEE 802.11b or Wireless Fidelity).
Despite its growth, an overwhelming 94% of global broadband users in 2002 were concentrated in the developed economies. In broadband terms, large disparities exist between the developed and developing worlds not only in terms of service availability, but also in terms of cost and access to technology.
But Africa Is A Different Story…
Whilst broadband has been taking off at a rapid rate in the developed world, the story in Africa has been a different one. In a region where fixed line penetration is the lowest in the world- 2.8% at the end of 2002, in comparison to Europe's 41%- Africa has not been able to rely on more "traditional" broadband access methods to deliver high speed Internet straight to end users.
The broadband market in Africa is currently at a nascent stage in development with users numbering only in the thousands at the end of 2002. A small number of Africa's public telecoms operators began deploying broadband services during 2002 and 2003, utilizing DSL, VSAT and occasionally cable technologies. In monopoly or near monopoly markets, the incumbent is likely to wholesale broadband services to ISPs (Internet service providers) who then resell it to their subscribers. ISPs are not generally allowed to operate their own alternative infrastructure, and therefore must use that of the incumbent's to provide services. In South Africa, for example, ISPs offer ADSL services over the infrastructure of Telkom South Africa. ADSL services have also been rolled out by incumbents in other countries, such as in Senegal or in Angola.
The prospects for offering high-speed broadband services over the incumbent's network in Africa are capped by the limited fixed infrastructure. With fixed line penetration per 100 inhabitants ranging from 0.24 in the Central African Republic, or 0.5 in Ethiopia to 1.03 in Kenya to 10.77 in South Africa, fixed line infrastructure is limited, and tends to be focused on urban areas, thus limiting the rollout of broadband over DSL networks.
Not only is broadband growth constrained by the lack of fixed infrastructure, amongst other reasons, but it is also limited by a lack of bandwidth - the range of frequencies through which voice, data and Internet traffic is transmitted. Whilst the developed markets wallow in a surfeit of bandwidth capacity, the opposite is true for Africa. In 2001, for example, there was more international IP bandwidth (1.3Gbit/s) available to the 450 000 citizens of Luxembourg than the 820 million citizens of the African continent (1.2Gbit/s). Although available bandwidth is now slowly increasing, as new satellite providers enter the market, for example, a lack of bandwidth still threatens Internet usage and uptake.
In addition, for a region encompassing some of the world's poorest countries, Africa has some of the world's highest costs for international calls and bandwidth, making it far more expensive for African ISPs to operate than their developed world counterparts.
Alternative Technologies Drive Market Growth
With the prospects for offering broadband services via traditional access methods effectively capped by the lack of infrastructure it is no surprise that alternative access methods, particularly wireless access methods are being utilized. It is these more dynamic access methods which are largely driving the market, and will likely have a major role to play in its future growth.
Malawi: Wireless in Action
ISP Africa Online offers a wireless broadband service in Lilongwe, the capital and second city Blantyre. Africa Online is one of Malawi's 5 ISPs offering wireless broadband access and utilizing bandwidth provided via satellite. Its operation has started small - with some 200 subscribers - and is aiming to grow organically. As well as enabling the ISP to offer broadband services, wireless equipment provides an added bonus in that it cannot be stolen, whereas traditional copper wire equipment is frequently stolen.
ISPs in a number of different African countries are increasingly opting for different wireless access methods to provide broadband access, from WLANs (Wireless Local Area Networks) to fixed wireless access and VSAT (Very Small Aperture Terminal).
WLANS allow for broadband wireless internet access to be shared from a broadband connection within a distance of 100 metres. They are also increasingly used to provide broadband access over long distances in rural areas and developing regions- using special equipment and technology to boost the effective distance of the connection points. The most common type of WLAN technology used to provide broadband access is WiFi. Using a combination of wireless technologies and by linking directly to international satellite carriers, broadband services are being gradually offered.
A Luxury Or A Necessity?
Despite some growth and developments on the African broadband "scene", the market remains at very early stages in its development, and its reach is limited to a minimal target market. In a region such as Africa, where for many, access to basic amenities - such as healthcare - is limited, how great is the need for high-speed Internet access? It is easy to view broadband Internet access as a something of luxury, something that enables users to play games, download music, or watch film clips. How, then can it can be a priority for any developing region?
"Broadband may be considered a luxury to many African governments whose citizens still lack access to basic amenities such as clean drinking water" says Avita Dodoo, Project Officer for Internet Policy at ITU "However, failure to deploy such technologies may deny these countries an opportunity to participate fully in the knowledge economy of the 21st century."
For a region such as Africa, broadband should not be viewed as a luxury, therefore, but as a necessity in an increasingly information-based society. Providing broadband access opens up a new door to a knowledge-based economy, which in turn will promote the region's social and economic development. Broadband can be harnessed to improve a number of key initiatives:
Community Access: In rural or developing areas, broadband can be utilized in order to "leapfrog" the need for traditional fixed line infrastructure and provide access to voice, data and Internet services in regions which previously did not have access to fixed line services. The ITU's Telecommunication Development sector is in the process of implementing 3 pilot projects to determine the performance of WLANs for providing community access in rural areas of Uganda as well as Bulgaria and Yemen. With the help of broadband technology, rural and developing areas may be able to bypass the need altogether to install the older copper lines which are more common in the developed world.
Community Telecentres: Crucially, in a region where PC penetration levels are among the lowest in the world, community telecentres play a key role in allowing small and medium sized enterprises (SMEs) who would otherwise not be able to afford it access to ICT tools. SMEs, along with cyber cafés are likely to be the biggest users in Africa of broadband and providing broadband access to telecentres would enable SMEs to benefit from it, and enhance their ability to compete in today's global marketplace.
Cyber Cafes: Cyber cafes currently account for the majority of broadband users in Africa, and fill a vital market niche. As numbers of dial up subscribers in Africa are reaching a plateau- in terms of those who can actually afford a connection- cyber cafes allow those who cannot afford a fixed line connection to access the Internet. As cyber cafés increase, so too will the demand for broadband access and bandwidth capacity.
E-health: The power of broadband will vitally enhance e-health initiatives such as Telemedicine - providing medical services and healthcare remotely. In a number of African countries, telemedicine is making a real impact on the availability of health care and health care information. Broadband technology enables rural doctors to send complex x-rays to experts in major cities for diagnoses who then in turn send back their advice.
E-learning: Utilizing broadband can help e-learning initiatives such as the AVU (African Virtual University), a distance learning project which offers tertiary level training options to students living in the most remote and isolated communities in sub-saharan Africa. Broadband will help to expand interactivity between students and professors, using two-way video and audio streaming to help students in Zimbabwe query a professor in Canada, for example, whilst students in Rwanda or Kenya offer comments.
A Wireless Future…
Although still very much in its infancy, the African broadband market looks set for growth. Current constraints of price and bandwidth availability will loosen as demand picks up. A recent initiative in Ghana to utilize the excess fibre backbone of electricity utility, the Volta River Authority, to provide additional fibre bandwidth could be the catalyst for similar projects in other countries to utilize utilities excess fibre backbones and boost bandwidth capacity. Currently curtailed by limited fixed line infrastructure, Africa's broadband will be driven by alternative access methods.
"While broadband expansion in high-income economies has traditionally been tied to wired infrastructure" explains Taylor Reynolds, Project Officer at the ITU's Strategy and Policy Unit. "Africa's broadband future will lie within emerging wireless technologies and devices."
In addition to wireless technologies such as WLAN, fixed wireless technologies such as WiMax (a wide area fixed wireless technology) are likely to come into their own in developing markets. WLAN technologies can currently spread broadband connections over a short distance from a "long range" connection, whilst technologies such as WiMax, which is currently being developed and trialled in a number of countries, have the facility to transport large amounts of data over long distances. WiMax is able to carry a 70Mbit/s connection over 50km, making it ideal for the deployment of broadband in areas where no infrastructure currently exists.
…Will Maximize Broadband's Benefits for Africa
Wireless technologies such as WLAN and WiMax, whether over "handheld" devices or through community access PCs or cyber cafes, are those that are likely to maximize the benefits of broadband for Africa in the medium term. Through "alternative" wireless technologies broadband will enable the region to leapfrog "traditional" access technologies, provide broader access to ICTs and ultimately afford African countries the opportunity of participating more fully in the knowledge economy of the 21st century.
But much remains to be done. Africa's robust growth leads that of Latin America and the former Soviet republics, but its jaw-droppingly low penetration rate still leaves a yawning void. Under 6% of all Africans can access telecommunications of any kind with many of those outside urban areas unable to access fixed lines. The Internet is out of reach to the vast majority of Africans.