LTE: Africa’s broadband future

The subjective experience of using the Internet in Africa has always been a strange one. Having been using it for over 14 years, we know it’s got better but it’s sometimes hard to see it as anything but frustrating.

There’s always cost, network or capacity restrictions that pull you down even if things speed up a bit.

Russell Southwood looks at how LTE is working on Smile’s network in Kampala and wonders whether this might be how it will be everywhere in the near future in Africa.

For over a year I have been saying to anyone that will listen that LTE and video will be a game-changer in Africa. Friends and colleagues (particularly those in ICT4D tribe) have listened patiently, whilst their body language betrayed the thought that I might be in need of specialist medical intervention.

The logic for arguing this case was based on the fact that You Tube was in the Top 5 of every country measured by and that was with the fairly terrible Internet speeds available.

You only had to imagine the demand if you took away the speed constraint: the swirling circle of buffering just puts off people who don’t have the time or patience. I hadn’t actually used LTE myself before, just looked over people’s shoulders at it.

So I’ve been just under a week in Kampala with a Mi-Fi device supplied by Smile Telecom. The Mi-Fi device means that I can run my smartphone, laptop and iPad using a data connection.

This means none of that irritating thing in some hotels where they charge you more for each device in that rather grasping way I’ve come to associate with some African hotel Wi-Fi.

The device is almost exactly the same size as an iPod and creates your own Wi-Fi hotspot. So you turn it on, pop it in your pocket and you have Wi-Fi wherever there’s coverage. My driver and I couldn’t find a particular address. Whip out the iPad and there’s the little blue dot on Google maps guiding us in.

You can’t do this with data roaming because you’d need a financial facility underwritten by three Wall Street banks to pay for it: what’s the point of that? It works indoors or outdoors, which is not something every WiMAX vendor could say with confidence.

But the real kicker is when you use video, it starts playing straight away and runs all the way through to the end. Yes, that’s how online video’s meant to run and once somebody start’s showing off that Chameleone video on their phone, everyone of a certain age is going to want it.

Before Christmas, I wrote of a conversation with an international bandwidth provider who was saying that within a relatively short period of time corporate customers would experience the same bandwidth environment as they have in the USA or Europe.

For the first time, I’ve actually had a bandwidth speed in Africa that was the same (and at times faster) than my home ADSL connection in the UK. Yes, it can be done for household and individual customers as well…

There, I’ve said it, so let’s sit down and take a breath. Smile is a challenger ISP with tens of thousands of subscribers rather than a mobile operator with millions. There are 1.5 million data users in Uganda and Smile has barely touched the surface.

Its data network has been built from scratch and is completely used for data. It’s not go several levels of alphanumeric soup (3G, HSDPA, etc) strapped together on top of each other, finding its way through an under-powered network that was originally designed for voice, not IP.

Both Orange (which has a good reputation for data) and MTN (which does not) are offering LTE but I didn’t meet anyone with an LTE data connection or LTE mobile handset from either operator.

But it’s the gap between where the mobile operators ought to be in network terms and their lack of the right spectrum that offers such an intriguing opportunity for the insurgent challengers. It’s what WiMAX kept promising but never delivered.

Currently Smile has covered the Greater Kampala area (I used it all day in Mokono) and all the way down to the airport at Entebbe. It will roll out to 15 different regions this year.

LTE routers are still not cheap but are coming down in price. Smile sells the current device with 5GB of data for UGS240,000 (US$96) and if you take out the data allowance, it makes it relatively cheap for a multi-device roaming Wi-Fi hot-spot. The only drawback I could see was that it eats battery time like a smartphone.

Fiona McGloin, Country Manager for Uganda and Tanzania tells me that average use per day is stronger than they initially thought at 250 Mb. One of the main uses is You Tube and the uber-users are people with a lot Apple devices in their home or expats who are streaming TV from their home countries.

The latest Apple iPad is capable of being used in the spectrum Smile is operating in: 800 Mghz and there are tablets (which may exist in thousands) and these are more visible than when I was last here in 2011.

Customers (and they won’t tell us how many) are 50/50 corporate and individuals and households and obviously the latter on the current pricing model are high-income. The purchase of high-end vs low end bundles is again split half in half, with young professionals buying most of the low-end bundles.

Bandwidth is sold in capacity bundles and individuals tend to find themselves using more at first and then throttle back their use. Prices vary from 500 MB for US$10 to 500 GB for US$211 and have been designed to reflect existing 3G prices.

Selling capacity in this way (which is common across all of the industry) still smacks of rationing but that will change as prices cascade as inevitably they will.

The challenge for the legacy operators is how they keep up with the implications of this new bandwidth horizon. The challenge for the insurgent challengers is to prove that they can break out of being the eternal corporate ISPs and actually capture hundreds of thousands of customers.

No rest for the wicked…

By Balancing Act

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LTE: Africa’s broadband future