Africa’s Cloudy Horizons
Africa is my destination this week. I’m on a mission that’s both personal and professional.
Unofficially, I hope to prove myself wrong about the déjà vu that I feel about aspects of Africa’s ICT market.
The IMF just said that sub-Saharan Africa is beginning to stand on its own feet, pointing to its sustained and major progress since the millennium.
Not least, financier George Soros recently described Africa as ‘one of the few bright spots on the gloomy global economic horizon.’ (And having met and worked for Mr. Soros, I warrant that he pulls no punches.)
Great leaps forward?
Meanwhile, progress in ICT – which is intimately linked to economic health – rarely traces a smooth curve. Take the international Internet bandwidth spike from new African submarine cables.
Lighting the long-awaited EASSy cable gave countries like Kenya 10 times more capacity overnight. And only two weeks ago, the 5.1Tbps WACS cable landed in South Africa to great fanfare. More cables are to come.
Africa’s outrageous international bandwidth prices are well under attack. But let’s hope that’s not the whole story.
Plus ça change
As a veteran of Europe’s bandwidth bloodbath, this all seems eerily familiar. My concern: A race to the bottom in international (wholesale) bandwidth pricing, and poor attention on fundamentals. What do I mean by fundamentals? I mean the critical need to close the loop by providing local and personal on-ramps to digital superhighways and clouds.
A rough calculation suggests that Kenya’s international internet bandwidth exhibited a 140% CAGR between 2005 and 2010. Yet personal access still equates to only 2,378bps per capita, according ITU figures for 2010. And Kenya is better off than most on some metrics: Smartphone penetration of mobile handsets is 14% versus South Africa’s 22% and Uganda’s 2%, per Informa estimates.
A delicate ecosystem
In 2003, I co-authored a major market study of the South African telecom market for the South African Department of Communications. My specific remit was to evaluate enterprise and wholesale services, size the market and detail its prospects and impediments.
In some ways, nothing has changed: Being a successful digital society still means keeping a delicate ecosystem in balance. That ecosystem includes many elements – and it’s not just submarine cables. Terrestrial fiber, spectrum, Internet exchange points and datacenters are among the telecom assets also required. But that is certainly not all. Affordable devices, ICT literacy and investment, rule of law and many other factors are highly relevant.
Enter the Cloud
With some irony, I reread these nine-year-old words:
Many [telecom operators] are exploring expansion into the IT services space as a way to increase wallet share with business customers.
Hosted IP telephony can help businesses increase their productivity by virtually eliminating the boundaries of the workplace [and] will become the foundation on which all other services will be built.
Indeed! And as Informa’s Telecom Cloud Monitor indicates, African operators like MTN, Safaricom and Vodacom are among those taking action. The cloud’s operational model offers extraordinary new opportunities.
But let’s be very clear: Every new kilometer of sub-sea cable and square meter of server space is only part of what Africa’s ecosystem needs to become truly digital.