2007 African - Broadband and Internet Markets

Africa’s data traffic is on the rise, fuelled by rapid growth of ADSL and wireless broadband services. Massive efforts are under way to adapt the continent’s underdeveloped infrastructure to the growing need, both on the national and international level. Broadband has begun to rapidly replace dial-up as the preferred access method, and this process is already virtually completed in the continent’s more developed markets. Overall market penetration is still low, leaving ample room for further growth in the coming years.

Africa is still the least connected continent in the world, both from an Internet penetration perspective and in terms of the total bandwidth feeding the continent. Growth has, however, accelerated in recent years due to improvements in infrastructure, the arrival of wireless access technologies and lower tariffs. The introduction of competition and increasing regulatory pressure on monopolistic pricing by incumbent telcos for international bandwidth is beginning to have a positive effect.

VoIP continues to gain ground in Africa with growth rates in excess of 100% per year, following steady improvements in Internet bandwidth and deregulation in several key markets. Nevertheless, at least 10% of international calls in almost every country on the continent are still carried by unlicensed grey market players, because many operators are not yet passing on the full cost savings from VoIP to their customers. Profit margins are still very healthy in this emerging market.

More than half of all African countries now have commercial DSL services, but their growth is limited by the poor geographical reach of the fixed-line networks. The rapid growth of Internet access has therefore been mostly confined to the capital cities so far. The introduction of mobile data services is changing this as Africa’s mobile network operators are moving into the ISP business, bringing Internet access to many areas outside of the main cities for the first time.

Key highlights:

• Internet user forecasts to 2010 and 2015 for 16 African countries;
• Broadband is rapidly replacing dial-up Internet access;
• Commercial DSL services are now available in at least 30 African countries;
• Mobile network operators are pushing into the ISP space;
• Wireless and mobile broadband is set to overtake ADSL;
• Several new submarine fibre projects currently under development will improve the supply of international bandwidth at drastically reduced prices;
• WiMAX trials, rollouts or commercial services in at least 20 African countries;
• The number of African countries where VoIP can be regarded as open to private operators has more than doubled to around 20 in 2007.

Telkom South Africa ADSL, dial-up and satellite Internet subscribers - 2003 - 2007

Data in this report is the latest available at the time of preparation and may not be for the current year.