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Africa: the next international business opportunity
28 February 2011
What is making Africa an increasingly attractive place for ISPs, carriers and major corporates to be doing business? Co-sponsored feature: WIOCC
Mike Last from WIOCC takes a look at what is making Africa an increasingly attractive place for ISPs, carriers and major corporates to be doing business. Co-sponsored feature: WIOCC
Mike Last: African communications are changing rapidly
Africa, the second largest and third most populous continent, has historically been hindered from becoming a more significant player on the world business stage by a combination of factors, including major communications challenges. Key among these were a lack of affordable, reliable, high-speed connectivity — both domestically and internationally — and little diversity of telecommunications networks.
However, the African communications landscape is now in a period of rapid and massive change, with the construction of high-capacity international cables together with long-distance fibre-optic terrestrial connectivity acting as a catalyst for a step change in the continent’s economic development.
We are in the middle of a three-year phase of fibre-optic submarine cable deployment around Africa, by the end of which the continent will be on a par with the rest of the world in terms of high speed connectivity. Crucially, options for diversity are growing, enabling carriers to provide continuity of connectivity to their customers on international routes and into landlocked countries in the interior.
Amongst the most recent submarine cables to go live in sub-Saharan Africa is EASSy — the East African Submarine System — which is a 10,000 kilometre high-speed, high-resilience, low-latency cable with 3.84 terabits a second capacity. It has landings along the coastline from South Africa to Port Sudan, and with excellent onward international connectivity.
The development and launch of EASSy has been instrumental in transforming the connectivity landscape in eastern and southern Africa, which has seen international bandwidth costs fall more than 50% in the past 16 months.
A measure of EASSy’s success is the news that capacity sales on the cable have outstripped initial forecasts to such an extent that it will be upgraded earlier than expected — in the second half of 2011. The 30 gigabits a second of lit capacity currently on the system will be more than doubled in 2011, enabling purchasers to continue to meet the growing needs of domestic and international clients.
Connectivity for the rest of Africa is also improving. WACS, the West Africa Cable System is due to go live in 2011, providing faster, more reliable and cost-effective global connectivity between southern and western Africa and Europe.
EIG, the Europe India Gateway, will enable the completion of a ring around Africa by linking EASSy and WACS through the Red Sea and Mediterranean Sea. Further investments are also being proposed, with deployment planned over the next two years.
Terrestrial connectivity increasing rapidly
Until recently, the lack of high-quality, terrestrial connectivity in Africa presented businesses with real concerns about communicating with land-locked countries and inland from coastal submarine cable landing stations.
A recent study by Hamilton Research reveals that these concerns are rapidly being addressed, with the operational terrestrial transmission network in Africa increasing by 26% to 585,471 kilometres in the 12 months to July 2010.
This growth is set to continue apace, with well over 150,000 kilometres of further fibre under construction, planned or proposed — representing a combined investment of $ 3.8 billion.
WIOCC’s own shareholders — 14 telcos from across Africa — are major contributors to this expansion, rolling out and interconnecting high-capacity fibre-optic backhaul networks that are extending the reach of EASSy from its coastal landing stations to business locations throughout eastern and southern Africa.
As a result, WIOCC can now offer a one-stop shop solution for African and international carriers wishing to connect customer sites in Africa with the rest of the world. We also offer African internet service providers a cost-effective, high-performance internet IP transit service, which is leading to improvements in the cost and performance of internet services across the region.
With these developments, the case for businesses, telcos and ISPs to invest in Africa and be a part of the continent’s economic awakening has surely never been stronger.
New submarine cables are being installed round Africa
Terrestrial cables are now being built into landlocked countries
Africa: the business environment
Nowhere else is telecoms growing as rapidly as in Africa. Unencumbered by legacy systems, investment in terrestrial optical fibre networks is prodigious. New technologies are quickly adopted, giving rise to a dramatic increase in mobile usage and business applications for a mobile platform.
• During the recession in 2009, GDP dropped by 4% in the USA, by 2.8% in the EU and by 1.5% in Latin America. In contrast, GDP in Africa increased by 2%, according to the Boston Consulting Group report, African Challengers
• An estimated 15.1 million smartphones were sold in sub-Saharan Africa in 2010 — 10% of all handset sales in the region. This is expected to rise to 30-40% by 2014, according to Deon Liebenburg of RIM, writing in Africa Telecom
• In Feb. 2010, Cisco unveiled the first public Cisco TelePresence suites in Kenya and Uganda. GTB