LTE is expanding in Africa

LTE data services once seemed like a service that would only be for the larger markets in Africa. But LTE has now all but replaced WiMAX as the data delivery technology for wireless broadband for new implementations.

Russell Southwood spoke to the co-owner of the Gambian ISP I-Link, Danny Isaac.

I-Link started in 2004 as a small Internet café and over the years has morphed into an IT services and hardware company before also wanting to add ISP services for corporates and high end home broadband users.

“We identified the need for stable, high-speed broadband. We applied for an ISP licence a year ago and got that licence one month ago. We’re now completing the raising of funds to do it.”

It will start with a relatively small network in the Greater Banjul area in its phase one and in phase two will expand its network to other towns and some of the rural areas of the country:”There’s an emerging market for data use in these areas.” It is in the process of hiring staff and by February 2015 it will start technical trials.

“We have funds to do phase 1, the micro network in Greater Banjul but we want to get funds to attain our wish list in phase 2. We will have things in place before the end of the year and by February it will go live for trials.”

Isaac sees the customer base as a combination of niche markets including SMEs and home users with the disposable income to afford a high-speed broadband connection.

Thus far the Internet in Gambia has grown on the back of the mobile operators offering relatively cheap data packages for handsets. But the average price for a home broadband subscription is US$50 a month:”This market is roughly estimated at 10,000 users and it’s been a growing market ever since the cable ACE landed in 2012.”

Although Isaac is cagey about potential pricing, he does say that it will be cheaper than existing offers in the home market. He will offer customers either an outdoor CPE (which will require a 3-6 metre pole on the customer premises) or Mi-Fi devices. Again he is reluctant to talk prices ahead of the launch but does say:”Our marketing strategy is to offer below market price with low price CPEs.”

So what does he think the drivers of LTE subscriber growth will be?:”It’s a long-term investment but users are becoming more Internet savvy. Several projects have happened and our plans are only the tip of the iceberg. A local IXP was recently launched and we’re expecting Google to host its root servers locally. The telcos have seen the need for Internet and are making it readily available to everyone on their phone.”

He cites as proof that the habit is becoming embedded a recent incident locally. There was a break in the international fibre cable and as a result there was no Internet in the country for 2 days. There was uproar in the local media and the regulator called a meeting of operators to insist that they invested in a back-up.

The arrival of the ACE cable has seen wholesale capacity prices fall to the “low hundreds of dollars” per mbps per month and they may yet go lower as demand increases.

Local ISPs have certainly got the jump on mobile operators at this point but it’s hard to see how they will stay in the game unless they can offer an increasingly cost-effective service with wide coverage.

However, as we have already written earlier (talking about Smile’s offer in Nigeria and Uganda), a Mi-Fi device can deliver more or less developed country standards of bandwidth and operate on the move.

By Balancing Act

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LTE is expanding in Africa