The shifting broadband landscape in Africa
Africa faces a deluge of broadband capacity flooding the continent, the start of which was the landing of more than 9 Terabits per second (Tbps) in the two years between 2009 and 2011, with an additional 11Tbps of submarine fibre expected by 2013.
This is according to Convergence Partners, an investment vehicle with stakes in companies such as Dimension Data, Vodacom, Seacom, and FibreCo.
In a report released by Convergence Partners today (28 June 2012), the investment company’s researchers said that on this front alone, the African broadband landscape has seen a fundamental change over a relatively short period.
“In addition, a number of significant developments such as the imminent migration from analogue to digital terrestrial TV (DTT), the continued liberalisation of communications markets, and the freeing up of and new allocations of spectrum resources will make the next 18 – 24 months an interesting and exciting time,” the report states.
According to Convergence Partners, these developments will expose the bottlenecks in the system, which it says sits in the terrestrial backhaul.
“Africa is still at an early stage of ICT development, according to the ICT Development Index (IDI), with it being the least wired continent in the world with respect to robust communications infrastructure and systems for its more than one billion people,” the researchers wrote. “This reality places a renewed emphasis on visionary spectrum management by African regulators in closing the growing digital divide between Africa and developed markets and rural and urban African communities.”
Fixed vs mobile broadband subscriptions
Broadband hurdles
The objective of the report, Convergence Partners said, was to evaluate the current state of African broadband, discuss the impediments to widespread continental broadband adoption and highlight the benefits of improved broadband, particularly wireless broadband.
Impediments include: infrastructure constraints (including the lack of reliable power), the regulatory framework in place and implementation thereof, fragmented, deficient government policy, and a lack of satisfactory competition in communications markets.
Among the points argued in the report is that innovative models of spectrum allocation are required to ensure that the benefits of broadband are extended to all.
Looking specifically at the Independent Communications Authority of South Africa (ICASA), Convergence Partners said that it is fully supportive of the regulator’s proposed licensing framework where it seeks to introduce open access networks.
“Though we’re of the view that its proposals do not go far enough in reorienting our current broadband landscape as it neither proposes the creation of secondary markets nor creates any incentives for licensees with unutilised spectrum to share it.”
ICASA’s proposed licensing model, as with the previous one, prevents dynamic usage of frequencies, preventing reuse and reallocation of the spectrum and thus ensuring there is no incentive for incumbent operators to maximise the value of their spectrum holdings, Convergence Partners said.
The report said that this may entrench the existing inefficiencies in the telecommunications sector.
World Bank 2009 Economic growth per 10 percentage point rise in broadband penetration
Spectrum not a scarce resource
Convergence Partners went on to argue that radio spectrum is not a scarce resource, but one that has been inefficiently allocated on the continent.
“Perceived spectrum scarcity is due to administrative allocation and assignment processes that are a major bottleneck for market entry and widespread broadband diffusion,” the report said. “Unlike the spectrum management paradigm in use, our view is that spectrum licences should be technology neutral and allow for the dynamic usage of spectrum, including reuse and reallocation.”
The current allocation model has not corrected the broadband deployment market failures seen in rural areas, but rather triggered a widening gap in network performance and network economics, Convergence Partners said.
Interestingly, the report made no mention of the copper local loop as a potential bottleneck, instead arguing that sub-Saharan Africa’s paucity of fixed line communications networks and lack of backbone infrastructure has led to high prices for retail broadband services.
“This has curtailed the widespread adoption of broadband services,” the research report stated. “The lack of fixed networks to deliver communication services ensures that developing countries are more reliant on spectrum for commercial and non–commercial services, making the role of Continental regulators, in the management and allocation of spectrum, all the more critical.”
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