Tariffs 72% cheaper, broadband adoption rising by 28% per annum compound, and only one African coastal state without cable access. These ambitious and inspiring predictions are made by Pyramid Research in its latest report Africa connects: undersea cables to drive an African broadband boom.
Total broadband adoption in Africa will increase at a Compound Annual Growth Rate (CAGR) of 28% through to 2013 as new undersea cables boost Africa's international bandwidth. In addition, just one coastal state in Africa will be left without cable access, the number set to fall from 19 to one, according to a new report from Pyramid Research.
Africa connects: undersea cables to drive an African broadband boom describes the upcoming evolution of Africa's international bandwidth market, as five major new cables and a host of smaller ones are deployed and launched over the next three years. The 15-page report discusses how this increase in capacity will affect African broadband end users, driving adoption of fixed and mobile broadband by reducing tariffs - by up to 72%.
Finally, the paper examines how this changed environment will affect African broadband operators, turning in detail to two key markets, Egypt and Kenya, in order to see how their contrasting regulatory environments will affect the impact of the newly available bandwidth.
The biggest change to African telecom markets over the next three years will be invisible: “Twelve new undersea cables planned for launch between third quarter 2009 and mid-2011 will remove the most serious obstacle that has historically prevented operators from taking advantage of Africa's great unmet demand for broadband services,” says Dearbhla McHenry, Analyst at Pyramid Research and author of the report. “As a result, the cables will increase Africa's total international bandwidth from about 6 Tb/s to as much as 34 Tb/s and will reduce the number of coastal countries without any cable access from 19 to one,” she adds.
“Through the end of 2Q09, 40% of continental Africa's 47 nations had no direct cable connections at all, forcing operators to rely on expensive satellite links,” Dearbhla McHenry explains. “The combination of heavy reliance on satellite and monopoly control of local access to undersea cables meant that prices are also astronomical: rates for SAT-3, for example, are about US$4,500 to US$12,000 per Mb/s per month, which is more than 20 times more expensive than bandwidth prices in the US.”
The quintupling of Africa's international bandwidth will support the upcoming boom in African broadband adoption by increasing capacity and bringing down prices for end users. The author continues: “By early 2011, we expect that more than half of all African markets will have 3G, while broadband coverage is increasing daily via both wireless and wireline technologies...We forecast that total broadband adoption in Africa will increase at a CAGR of 28% from 2009 to 2013, as increased competition in the international bandwidth market brings down prices and as new cables support the corresponding increase in demand.”