Mobile subscribers and penetration in Africa
While mobile services have become more accessible and affordable, Internet access has generally not. It is estimated that there were some 50 million Internet users in Africa in 2007, translating into around one person among twenty. Over half of the region’s Internet users are estimated to be located in North African countries and South Africa. In Sub Saharan Africa, only three per cent of the population is online. The scarcity of international Internet bandwidth and lack of Internet Exchange Points (IXPs) drives up prices. Africa, the poorest region in the world, has the most expensive Internet prices. The average monthly Internet subscription is almost USD 50 in Africa, close to 70 per cent of average per capita income.
Broadband penetration is low across the continent. There were around two million fixed broadband subscribers in Africa in 2007, less than a quarter of the population of metropolitan Lagos, the former capital of Nigeria. Only five African countries had a broadband penetration of more than one per 100 inhabitants in 2007. In comparison, the average broadband penetration in OECD countries was 18.8 in June 2007 and the lowest ranked country was Mexico, with a penetration of 4.6, or some 38 times more than the average for Africa. Fixed broadband access is mostly limited to urban centres. The low availability, poor condition and lack of competition in the public switched telephone network market constrains the deployment of fixed broadband access.
Broadband prices remain very high compared to income levels although average prices for Africa disguise significant underlying variability. Morocco, for example, has not only one of the highest broadband penetration rates in Africa, but also the lowest broadband prices, at USD 18 per month for a 256 kbps package. Broadband has proven so popular in Morocco that by the end of 2007, over 95 per cent of all Internet subscribers had a high-speed connection.
The future is wireless…
If broadband is to become more prevalent in Africa, it is likely to be through wireless technologies such as third generation (3G) mobile and WiMAX. In Mauritius and South Africa, 3G subscribers already outnumber fixed broadband subscribers. South Africa had 1.8 million 3G subscribers in September 2007 compared to 335 000 ADSL connections. Vodacom of South Africa reported that over 10 per cent of its 3G subscribers used data cards for connections to laptops, reflecting the popularity of 3G as a broadband access method. WiMAX is moving from an experimental testing phase to commercial deployment in a number of African countries. The spread of high-speed wireless technologies will intensify broadband competition in Africa. There is evidence that broadband pricing in Africa is lower in countries that have deployed both fixed and wireless broadband technology.
The provision of voice telephony through public payphones is prevalent in some African countries. Liberalization of payphone markets has led to a proliferation of entrepreneurs reselling phone service. Take Togo for example, where about one quarter of fixed telephone lines are connected to private telephone cabins. The mobile boom has also created a large informal market reselling mobile airtime. This type of public access needs to be intensified for Internet access. Levels of home computer ownership and Internet subscription are extremely low in Africa and will remain so for years to come. Higher levels of ICT access will only be achieved through public facilities such as Internet cafs and schools. Practical programmes are needed to dramatically boost access through public facilities, including the full liberalization of public access licensing procedures to facilitate the creation of entrepreneur-operated facilities. This should be linked to e-government programmes in order to ensure that citizens can electronically interact with their governments.
A serious impediment to the development of ICT markets in Africa is the lack of electricity. Energy shortages and power failures raise costs, as operators must maintain their own generators. Governments could consider offering tax rebates to offset the high costs of energy for telecommunication operators. Import duty waivers and tax reductions could be extended to local companies supplying renewable power and equipment to mobile operators. Private-public partnerships between utilities and telecommunication operators could also address specific energy needs.
As the end of the first decade of the new millennium approaches, Africa stands at a crossroads, with ICT policy makers faced with important choices. While the mobile sector has grown tremendously, sustaining this momentum and expanding access in areas where Africa is lagging behind such as Internet and broadband, will not come easy. Getting more users on board would mean targeting lower income segments of the population. These potential customers are highly sensitive to price and small changes can have a big impact.
Bringing down prices will be key in expanding access to more Africans. Governments can do their share by reducing taxes, interconnection rates and regulatory costs. Deeper liberalization such as the abolition of remaining exclusivities on market entry, the reduction of license fees and simplification and transparency of licensing procedures can help to increase competition and lower costs.
Infrastructure sharing is particularly relevant in a region that needs both investment in ICT facilities and lower prices. It is therefore logical to minimize duplication and share facilities where practical. Regulators can help by creating a trusting environment among operators and developing policies that promote infrastructure sharing.
The report will be launched at the opening Press conference of ITU TELECOM AFRICA on 11 May in Cairo, Egypt.
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