Welcome to the 2nd annual review of telecommunications infrastructure development in Africa. Last year was my first attempt at painting a big picture of communication infrastructure development on the continent and it seemed to fill a gap in public information. Also I found the process very useful personally. I find I don’t stop to take stock often enough. This year’s review is a little more ambitious. Below you will find links to over 140 news articles covering everything from fibre to spectrum and more.
If 2014 was the year that a number of “powerpoint” undersea cables projects disappeared into the digital ether, 2015 is the year when I learned to stop making predictions about undersea fibre capacity. Only a month ago I was predicting the end of new African undersea fibre projects — only to be wrong-footed two weeks ago by Liquid Telecom’s announcement of a brand new cable called LiquidSea to be built up the east coast of Africa. Indeed things have been busy in 2015.
The ACE cable consortium announced that they would be extending their cable from Sao Tome all the way to South Africa. They also added new partner countries, including Benin, the Canary Islands, and Cameroon. Cameroon in particular was notable this year because not only did they join the ACE consortium but they also announced an agreement with MainOne to build an extension, called the Nigerian Cameroun Submarine Cable System (NCSCS), to connect Cameroon to their undersea cable. As if that weren’t enough, the Cameroon-Brazil Cable System (CBCS) was announced in October which proposes to connect Cameroon with Brazil. Given that Cameroon only announced its first 3G services about a year ago, this is a remarkable change of events. Time will tell whether it leads to a more competitive market there.
That wasn’t the only cable connecting Africa to Brazil. The EulaLink cable is planned to connect Brazil with Portugal and has potential landing points in Cape Verde and the Canary Islands.
Existing undersea cable operators were not standing still either:
- WACS announced a major upgrade, which went live in December, bringing their design capacity up to 14.5 Tbps;
- MainOne also announced an upgrade to 10 Tbps in 2015; and,
- the EASSy consortium did bringing their design capacity to 10 Tbps as well.
Other smaller announcements included Algeria’s plans to build an undersea cable connecting to Spain. Angola also announced an offshore undersea cable focused primarily on servicing the country’s oil and gas industry.
This represents an increase of tens of terabits per second in planned and existing undersea fibre capacity around Africa in the last 12 months; a very significant sign of optimism in the telecommunications market.
Terrestrial Backbone Fibre
Measuring the growth of terrestrial fibre networks in Africa is quite challenging as projects often have several phases of deployment, from financing to breaking ground to technical completion to inauguration, all of which may be deemed newsworthy. A project can also have multiple construction phases each at varying stages of completion. So what can we say about terrestrial fibre in 2015? There were nearly double the number of announcements from 2014 with new projects from 19 African countries, comprising over 22 thousand kilometres of fibre and over 730M dollars of investment. As you can see from the table below there are many gaps in information about network size and investment so these figures are likely extremely conservative.
Last year probably represents peak investment in national fibre backbones as virtually every country on the continent has embarked on national backbone projects. Just as undersea cables have spurred the development of terrestrial fibre backbones, we can now see how this wave of investment is triggering investment in metropolitan fibre networks.
It is also possible to see that China dominates the terrestrial fibre network industry in sub-Saharan Africa. Chinese investment has resulted in the development of tens of thousands of kilometres of fibre being built on the continent. This is positive news but there are trade-offs that need to be considered. One that concerns me in particular is that often fibre network investment goes ahead without due concern for how the network will be managed in the longer term and/or how it will be used to stimulate competition. The World Bank, to their credit, place a strong emphasis on Open Access policies related to their network investments. While fibre has spread rapidly across the continent, there is a large variance in its uptake. Poor management or anti-competitive behaviour often limit the impact of this infrastructure.
|Cameroon||916||40||Oct 2015||African Development Bank||?|
|Republic of Congo||520||23||Oct 2015||World Bank (Central Africa Backbone)||Huawei|
|Democratic Republic of Congo||Mar 2015||World Bank (Central Africa Backbone)||?|
|Ghana||800||38||May 2015||Danish International Development Agency (DANIDA)||Alcatel-Lucent|
|Guinea||4000||238||Jul 2015||Eximbank (China)||Huawei|
|Kenya||1600||Nov 2015||Chinese Government||?|
|Ivory Coast||5000||165||Dec 2015||?||?|
|Mali||1064||6.5||May 2015||Maroc Telecom|
|Niger||2275||93||Jun 2015||Chinese Government|
|Sierra Leone||400||15||Apr 2015||Exim Bank (China)||Huawei|
|South Sudan||1000||Jan 2015||World Bank|
|Tanzania||Jun 2015||China International Telecommunication Construction Corporation (CITCC)|
|Togo||200||Apr 2015||Exim Bank (China)||Huawei|
|South Africa||17.5||Nov 2015|
|Malawi||428||Mar 2015||World Bank||China Telecom|
Metro Fibre, Fibre To The Home (FTTH), and Video on Demand (VoD)
It is a perfectly natural development, as undersea then terrestrial fibre networks developed in sub-Saharan Africa, that metropolitan fibre networks would follow. And the best news story this year on metro fibre has been the expansion of Google’s Project Link to a second African city: Accra, Ghana. I’ve written here, here and here about why I think this is such an important project. The Accra announcement signalled that Project Link is not just an experiment for Google but a strategy they plan to implement in other cities.
Municipally-driven metro fibre has moved more slowly elsewhere with few major cities engaging in the strategic development of municipal fibre networks but rather allowing individual operators build out networks. There are a few exceptions. South Africa has a number of metropolitan fibre networks including Cape Town, Johannesburg, Tshwane and Ethekwini which embrace a variety of different deployment models. Cape Town has built out a municipal fibre network that leases excess capacity to the private sector. In July of 2015, they released some impressive statistics as to how much money the new network has saved them. Johannesburg opted for a Public Private Partnership (PPP) with Ericsson which did not work out well, resulting in the city cancelling their contract with Ericsson. As of 2015, it is now a Municipally Owned Entity with plans for expansion.
The development of PPP-driven metropolitan fibre networks is apparently part of the fourth phase of Tanzania’s National ICT Broadband Backbone (NICTBB) plan but I have not been able to locate any additional detail. In 2015, we also saw the spread of metro fibre outside of capital cities and into secondary cities such Liquid Telecom’s announcement of fibre investments in Kilifi, Kenya
Looking back it now seems inevitable that the development of metro fibre networks would lead to Fibre To The Home (FTTH) offerings but I don’t think anyone expected it to happen so fast. Below you can see a list of FTTH announcements from 2015. Two things stand out. One, South Africa in particular is going through a massive wave of FTTH competition. I listed a few announcements but it doesn’t really do justice to the explosive growth of competition in the last year from new FTTH speciality operators and existing telcos. The second issue worth noting is the continued investment in FTTH from Liquid Telecom in a number of markets. In August they launched Hai, an ISP offering FTTH service in Zambia with Rwanda and Kenya to follow shortly afterwards.
And, of course, where there is FTTH there are Video on Demand (VoD) services. New VoD services were launched in Zimbabwe but again the real stand-out was South Africa where Naspers, Vodacom, Telkom, and MTN all announcing services last year, seemingly in an attempt to get ahead of news that Netflix would soon be launching there.
The wireless world has been busy too, with operators across the continent rolling out new LTE networks. Just as in 2014 we can see a mix of frequencies being used. It roughly breaks down to a third of the deployments recycling 2G/3G spectrum mostly from the 1800MHz band, a third using 800MHz bands where previously CDMA networks dominated but which have now largely been abandoned, and a final third using 2.3 and 2.6GHz band some of which is new spectrum and some recycled WiMax licenses.
New for 2015 is the spread of spectrum auctions beyond Nigeria, which was for years the only country on the continent to carry out spectrum auctions. Tanzania announced plans to carry out spectrum auctions in 2016 and Ghana successfully auctioned 800MHz spectrum. While demand for spectrum is high in virtually every country in sub-Saharan Africa, regulators have been slow to make spectrum available. This can be attributed to the challenges involved in carrying out a fair and equitable spectrum auction. Poorly organised auctions can often result in either non-participation by key stakeholders or legal challenges later from those unhappy with the results. In Kenya, the regulator chose to forgo an auction and assigned 800MHz to the largest operator, Safaricom. This resulted in a challenge from competitor Airtel and Safaricom being asked to hand back some of the assigned spectrum to make available to other operators. Morocco has also strategically avoided spectrum auctions. In March, the Moroccan regulator, ANRT, made a massive assignment of spectrum to all the major operators making spectrum in the 800MHz, 1800MHz, and 2600MHz bands available to them. This has the significant downside of not creating space for new market entrants but, on the other hand, it gets spectrum out there and a ‘use it or lose it’ or even a ‘use it or share it’ policy could be used as a safeguard.
There were many more LTE network announcements 2015 than 2014, more than double, bringing the technology firmly into the mainstream in Africa.
|Benin||Smile Telecom||Nov 2015||?||?||?|
|Guinea Bissau||Orange||Dec 2015||?||?||?|
|Malawi||Access Communications||Apr 2015||800||20||FDD|
|Botswana||Mascom and Orange||Feb 2015||1800||3||FDD|
|Morocco||Maroc Telecom||Jul 2015||800||20||FDD|
|Morocco||Maroc Telecom||Jul 2015||1800||3||FDD|
|South Africa||Cell C||Sep 2015||2100||1||FDD|
|Tanzania||Smart Telecom||Aug 2015||2300||40||TDD|
|Madagascar||Blue Line||Jan 2015||2500||41||TDD|
Unlicensed and Dynamic Spectrum
Perhaps the most profound impact of the spread of terrestrial fibre on the continent is the manner in which it is enabling alternative last mile access in an environment where the last mile has been controlled by those with access to licensed spectrum. Unlicensed (WiFi) and dynamic spectrum (also known as television white spaces spectrum) are now coming into their own as terrestrial fibre networks offer the enabling backhaul infrastructure.
Of the two, dynamic spectrum has moved more slowly in 2015 as we wait for manufacturers to scale up manufacturing of dynamic spectrum chipsets. There is an unfortunate Catch-22 where communication regulators are waiting for signs of large-scale manufacturing to move forward with dynamic spectrum regulation and manufacturers are waiting for clear signals from regulators before scaling up manufacturing. I had hopes that South Africa or Malawi might have formalised dynamic spectrum regulation in 2015 but it seems that this will likely happen in 2016.
Progress in the form of new dynamic spectrum pilots took place in Mozambique and Morocco. And in Kenya, the announcement of a potential 4 million dollar investment to expand the Mawingu television white spaces initiative was very exciting as well as the government of Mauritius’ announcement of a national wireless network based on television white spaces and WiFi technologies.
But these are just teasers of things to come as dynamic spectrum technologies mature and grow to scale. The real story of 2015 was the spread of WiFi networks. South Africa is the real stand-out in this case, with WiFi networks being announced in Cape Town, Durban, Johannesburg and Pretoria — and not just on the streets but on buses and in petrol stations.
Also exciting was the emergence of wholesale-only WiFi initiatives such as Project Link in Uganda, Naspers/DiData in South Africa, and BoFiNet in Botswana. Given the limited spectrum available for WiFi this makes a great deal of sense in urban areas.
Finally, it is interesting to see the competing models for these WiFi deployments. Project Isiswe believes that WiFi can only be delivered as a free service financed by government. Startups like Argon Telecom in Kenya, which promises to deliver low-cost WiFi to Kibera, believe that there is a business model in very low-cost alternatives to mobile services. Ultimately, governments, businesses, and consumers ALL derive benefits from connectedness and as a consequence there is truth in both propositions.
Mixing Things Up
Another interesting trend in African telecoms in 2015 has been the increased entry of non-telco players into the telecommunications infrastructure market. Internet companies like Google expanding Project Link from Kampala to Accra and perhaps beyond is a great example of this. Elsewhere, other interesting things were happening, such as the announcement that tower operator, Helios, would acquire Telkom Kenya. If tower companies start thinking about leveraging their assets, who knows what might happen. Power companies, too, are flexing their muscles. Kenya power announced it would begin offering retail services and in Botswana the power utility announced it was considering opening up its network. Taken in sum this looks like very good news as markets that have traditionally been the province of just a few large players are now exposed to competition from a variety of directions.
What can we take away from the above? For me it is clear we are just beginning to see the profound the impact of fibre optic infrastructure on the continent. Mobile infrastructure in Africa took ten years (roughly 1994-2004) before its real impact begin to be felt. I believe we are now starting to feel the real impact of fibre infrastructure that began with the landing of the Seacom cable in 2009. It is bringing true high-speed, affordable infrastructure to the continent and enabling both mobile and alternative next-generation access networks. Do you agree? Disagree? Please let me know in the comments. Also, as with last year, please help me out with news I’ve missed or issues I have misconstrued.
This work would not have been possible without the support of the Network Startup Resource Center