What Does the Future for Telecoms in Africa Really Look Like?

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What Does the Future for Telecoms in Africa Really Look Like?

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What Does the Future for Telecoms in Africa Really Look Like?

With a new year comes a fresh opportunity to reflect on where Africa has been and where it is headed in terms of telecoms and its related technology. Africa has been referred to as ‘the dark continent’ for decades. However, as connectivity grows and we continue to adopt new advancements, it is becoming clear that we, as a nation, are starting to see the light.

Consider the light of an illuminated smartphone to be our light at the end of the tunnel! The fact is that, in South Africa alone, about 20 to 22 million people currently own and use a smartphone. This accounts for a whopping one-third of the country’s population. There is no denying that our continent is growing by leaps and bounds, especially over the last five years. But, what does the future hold? We investigate.

 

How Telecommunications Contribute to the Economy

It is safe to say that the telecommunications industry has played a sizeable role in the growth of Africa’s economy as a whole throughout the last decade, with a strong focus on providing better quality data and voice services at a lower cost. Revenues relating to telecom companies have increased and are set to continue to do so at a 40% compound annual growth rate. Nowadays, the number of people who subscribe to various telecom services is sitting at over 400 million across the continent.

This is due, in large part, to the increase in investment in the growth and maintenance of the telecom infrastructure. Africa is now spending in excess of $15 billion a year in order to facilitate this. Experts predict that this amount could grow even more over the next ten years, at a compound annual growth rate of well over 33%.

 

Will We Be Able to Keep Up?

Did you know that there has been an $18 billion investment in progressing the telecom sector in Nigeria since 2001, when the country was home to just 700,000 lines? Despite a strong and dedicated investment in improving and building the telecom infrastructure across the continent, with the adoption of new telecom related technology, the question is will we be able to keep up with the demand? The saturation of urban markets is inevitable. But, many telecom providers are hopeful that we will not only continue to rise, but also to begin competing on a global scale.

The reality is, however, that a lack of power is proving to be many African countries’ main challenge when it comes to keeping up with demand. In Sierra Leone, for example, it is often said to be more challenging to keep a smartphone charged than it is to pay for various telecoms services!

 

Voice Services Will Remain the Leading Revenue-Earner for Telecoms

Since 2010, the continent has experienced over 50% of growth in rural areas in terms of voice services. To this day, it remains the leading revenue-earner for telecoms. Experts predict that going forward, telecom companies will need to begin making capacity investments in order to maximise profits, especially considering how the average return per user (ARPU) is being affected drastically as prices plummet and low-income markets are penetrated.

 

Ease of International Connectivity

Recently, obstacles making it challenging for African countries to maintain effortless international connectivity were removed, following the introduction of international sub-sea cables and satellite connectivity. Telecom professionals predict that international connectivity will continue to improve, fuelling growth and, ultimately, helping to lift the ‘digital divide’ that still exists between Africa and the rest of the world.

The reality of the situation is that the future growth of the African telecoms industry looks positive. However, it is not without its obstacles. A lack of computer literacy, poor broadband and PC penetration, as well as insufficient and unreliable electricity supplies, ensure that set-backs will be an inevitable part of the experience. Notwithstanding these challenges, the good news is that these challenges and obstacles are constantly being addressed.

 

AFR-IX Telecom strives to play a substantial role in maximising connectivity throughout Africa with a focus on connecting countries via submarine and terrestrial cables. For more information regarding what we do or about African coverage in general, be sure to contact us, or browse our website.

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