Telecommunications/ICT Markets and Trends in Africa 2007

This 34-page publication from the International Telecommunication Union (ITU) discusses trends in information and communication technology on the continent of Africa. From the preface: "[International Telecommunication Union] ITU has been measuring the development of the Information Society... by collecting data in cooperation with its member States and partner institutions. Besides highlighting the need to connect the least connected region of the world, this report seeks to help governments, the private sector, civil society and the international development community to take informed policy decisions....This report provides a comparative analysis of the development of the African telecommunication/ICT market. In this regard, trends in main (fixed) telephone lines, Internet, broadband and mobile cellular services are examined, as well as privatization and investment conditions. The report points out the challenges of the African telecommunication market, as well as the need for coordinated action."


It contains the follow chapters:

1. Overview
2. Regulatory Environment
3. Market Segments
4. Revenues and Investment
5. Employment in the Telecommunications Sector

In its overview, the document states that Africa lacks an investment-intensive infrastructure, e.g., fixed telephone line and fixed broadband infrastructure. Less than 2 percent of the world's fixed telephone lines and 3.8 percent of the world's internet users are in Africa. However, mobile cellular technology has a high coverage rate in Africa. "Cheaper infrastructure and larger regional penetration, cheaper handsets, competitive markets and business models oriented to the needs of the [economically] poorer segments of the population, such as affordable prepaid cards, have resulted in a mobile boom in Africa during the last decade. Nevertheless, the share of Africa with 7.2 percent of the worldwide 2.7 billion mobile subscribers " suggests that the African mobile market is far from the point of saturation.


With the rising telecommunication market, ICT demand is rising and, as stated here, "[t]o create access to ICT is a major challenge to African and foreign governments, the private sector and civil society. Regarding the advantaged of mobile technologies, Africa’s ICT/telecommunication future will likely be wireless."


Though fixed line telephone service is often in the hands of monopolies in Africa, the mobile market is generally in private hands, with 93.3 percent of the economies having partial or full competitive systems and 83 percent having an established regulatory authority for telecommunications. The staff of these authorities needs to be "well educated, trained and networked with colleagues from other countries in order to exchange its experiences and ideas on new emerging issues."


More and more African countries are approaching full universal access of all inhabited rural areas with a mobile signal. Countries with mobile rural coverage of over 90 percent include Comoros, Kenya, Malawi, Mauritius, Seychelles, South Africa, and Uganda. Other countries on the way to reaching this goal before the end of the decade include Burundi, Cape Verde, Guinea, Namibia, Rwanda, Senegal, Swaziland and Togo, all of which have rural mobile population coverage rates in excess of 50 percent. Africa is the only region where more revenues were generated from mobile services than from fixed line services (in 2007), with the Seychelles achieving over 100 percent "penetration rate" (meaning that at least statistically every person on the islands had signed up for a phone connection or bought a [Subscriber Identity Module] SIM card.)


A number of companies have subscribers numbering in the tens of millions , particularly in South Africa and Nigeria, including countries with growth rates as high as 46 percent. "Innovative business models such as the cross-border roaming free services of Celtel ...could transform these rankings as well. With the abolition of cross-border roaming charges, Celtel has responded to the particular needs in Africa, where often strong cross-border relationships exist. It is well-known that low subscription prices, prepaid services and low recharging cards have contributed to the African mobile boom." Though post-paid accounts are more lucrative, the pre-paid market is larger. "The deployment of more extensive national and regional fibre backbones and the direction of less mobile cellular traffic via expensive satellite-backbone based services could open room to further price reductions."

Internet penetration is much more variable by country than mobile phone infrastructure. Mobile phones are rarely used to access the internet due to the low speed of available connections. "The poor quality of internet services is partly due to infrastructural shortcomings, low Internet bandwidth, unreliable electricity, outdated end-user technology, interconnectivity issues, large software solutions or the small number of 18 African Internet Exchange Points (IXPs) by 2007, compared to hundreds of Internet Exchange Points across Asia." The focus is on broadband wireless as a solution because, as stated here:

• New, cost-effective, and flexible standards are offered by technologies such as Worldwide Interoperability for Microwave Access (WiMAX).
• "Providers, possibly also local champions, can offer broadband services to geographically challenging areas.
• Public service applications, such as e-government or e-learning, can be used via these technologies. Further, many models of financing these services are possible: local municipality could enter into partnerships with business owners; [economically] wealthier users might be charged more for the use than [economically] poorer neighbourhoods; or free public access points could be established all over the city.
• Companies can easily observe and direct their production-chain and do e-business."

The document cites regulatory and service provider challenges. Kenya, Nigeria, and Rwanda are countries working to establish the infrastructure for broadband wireless (2007). However, as stated here "it should be noted that also last mile wireless solutions rely on strong fixed infrastructure. There is no alternative for connecting Africa to the global backbones and to increase the number of national and local Internet Exchange Points (IXPs)." The document concludes with revenues and investment data on the continent of Africa.