Out-Law News 2 min. read

Broadband connections and telecoms investment on rise in Africa, says report


The number of mobile broadband connections in Africa will reach one billion in 2020, up from 147 million at the end of 2014, according to new research by market analysts Ovum.

Ovum said the growth of mobile broadband in Africa over the next few years “will be driven by factors such as the ongoing rollout of 3G W-CDMA (wideband code division multiple access) and 4G LTE (Long Term Evolution) networks on the continent and the increasing affordability of smartphones and other data devices”.

As African operators aim to boost telecoms services, Ovum said its ‘Digital Media Opportunity Index: sub-Saharan Africa’ (17-page / 752 KB PDF) “reveals that South Africa has the most favourable market among the 20 countries surveyed for digital media content such as apps, digital music, digital publishing, OTT (‘over-the-top’) video, and video gaming".

Ovum said that while some players have left the market “others are entering or expanding in the African telecoms market, bringing new investment”.

South Africa ranks highest on the index with a score of 4.35 out of 5, Ovum said. South Africa is followed in the digital media opportunity rankings by Angola (3.09), Kenya (2.97), Nigeria (2.89) and Ghana (2.85).

Ovum’s index projects that mobile data revenues in Africa will grow at a compound annual growth rate of 18.2% between 2014 and 2020, reaching $25.8bn by the end of 2020. “The number of FTTx (broadband network) subscriptions on the continent will grow strongly, albeit from a low base, and will cross the 1 million mark in 2020, reaching 1.2 million at end-2020,” Ovum said. “Both established and new operators in Africa are increasingly focusing their efforts on the data and digital services markets.”

Ovum’s practice leader for the Middle East and Africa Matthew Reed said: “The South African market is among the most advanced on the continent, so it is to be expected that it leads in potential for digital media services. Nevertheless, the index shows that there are digital media opportunities across the continent.”

Reed said: “Although the pace of growth in overall connection numbers in Africa has slowed and the regional industry is facing some headwinds from rising competition and weaker economic conditions, there are substantial growth opportunities on the continent in data connectivity as well as in digital services that are based on those data connections.”

A survey published last year by Swedish company Ericsson (8-page / 224 KB PDF) said sub-Saharan Africa is “rapidly closing in” on the global penetration rate of mobile communications usage. The survey said mobile financial services are increasingly popular as the use of information and communications technology (ICT) grows.

The African Union has said (104-page / 1.53 MB PDF) access to advanced ICT is “critical to the long-term economic and social development” of the continent. “It has increasingly become essential that appropriate ICT infrastructure, applications and skills are in place and accessible to the population to close the development gap between Africa and the rest of the world,” the plan said.

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