Welcome to the 8th annual review of telecommunications infrastructure development in Africa. It is hard to believe that another year in which most of us have operated remotely, spending large parts of our days in front of our web cameras. This is my summary of the highlights telecom infrastructure development in 2021 as well as links to over 270 articles covering a range of African telecom infrastructure development issues.
Undersea Cables
The continued increase in capacity and number of undersea cables reaching the shores of African countries is truly a wonder to watch. The METISS cable linking Madagascar, Reunion, and Mauritius with South Africa went live March. DARE-1, an undersea cable connecting Kenya with Somalia and Djibouti went live in February. EllaLink, which stretches from Latin America to Europe went into operation in June, connecting Cabo Verde, Mauritania, and Morocco along the way. Last but not least, the ACE cable finally connected its second phase reaching all the way down to South Africa. That’s a lot of new capacity. But wait, there’s more.
All of those new cables together will not match the capacity of either of the two massive silicon-valley funded cables, Equiano and 2Africa led by Google and Facebook respectively. For Equiano, which promises to go live in 2022, things have been pretty quiet, which is perhaps not surprising given how little news has been released by Google about the cable since its original announcement. Google did announce a partnership with Paratus to land the cable in Namibia but not much else made the news. 2Africa also announced new partnerships to land the 2africa cable in Angola, Comoros, south eastern Nigeria, and the Seychelles. 2Africa is projected to go live in 2023.
Although not in the same capacity class as Equiano and 2Africa, the China-financed PEACE cable is set to go live in early 2022, connecting Egypt, Djibouti, Somalia, Kenya, and the Seychelles to Pakistan.
Changing hands in 2021 was MainOne, which was sold to Equinix for $320M. Pioneered by Nigerian entrepreneur Funke Opeke, MainOne was first of a new generation of high-capacity undersea cables to reach West Africa in 2010. MainOne stood out as being one of the few independent undersea cable initiatives.
As a natural extension of undersea connectivity, investment in terrestrial fibre networks also grew in 2021. As with 2020, there were more cross-border fibre announcements including Cameroon-Chad, Cameroon-Gabon, Tanzania-Mozambique and others. This is good news for redundancy of network routes but also hopefully for lower costs, especially for land-locked countries, as more international access options appear.
2021 also saw the continued rise of regional fibre powerhouses such as Liquid Intelligent Technologies (formerly Liquid Telecom) who now have terrestrial fibre reaching from South Africa to Egypt and from Kenya to DRC. West Africa may be next as Liquid have announced a partnership with Orange. They are not the only regional players though. Paratus has expanded from Namibia into the Southern African region. BCS in have fibre infrastructure throughout East Africa. Regional operators like MTN and Orange are not far behind in establishing regional backbones.
Also notable this year was the continuing trend of power companies investing in fibre, often partnering with telcos to offer services.
Five years ago, news of investment in FTTH services spoke of reaching only a few thousand customers. In 2021, we see news articles about FTTH services threatening the mobile industry itself. It is worth reflecting on how big a change this represents to FTTH services breathing down the neck of MNOs most lucrative markets. Much of this is driven by demand for OTT services, although uptake of OTT service providers like Netflix, Showmax, and other is still hampered by high data costs. If fibre access costs can be brought in line with costs elsewhere in the word, fibre optic infrastructure will have at least as big an impact on African telecommunications as mobile has had.
While LTE networks continue to expand on the continent, very little new spectrum was released to operators. A notable exception was the Zambian regulator that released 2x10MHz tranches of 800MHz spectrum to Airtel and MTN for $12.5M and $13.5M respectively.
The Nigerian regulator also held an auction of the 3.5GHz band in December which saw successful bids of $273M (more than $75M higher than the reserve price) from MTN and newcomer Mafab for tranches of 100MHz each. While may have been a windfall for the treasury, it is hard to see how this particular release of spectrum will contribute to closing the digital divide in Nigeria. The high cost of spectrum combined with the 3.5GHz frequency that is best suited to urban broadband seems likely to ensure that little of this spectrum will serve those most in need of affordable broadband.
In South Africa, the drama of a spectrum auction that has been over 10 years in the making looks like it will be renewed for another season. So many lessons to be learned here. Economists argue that auctions are the most efficient and fair mechanism for assigning spectrum but the reality of their implementation does not always seem to match up with their aspirations.
It was a quiet news year for license exempt spectrum in Africa, although the WiFi Alliance did publish a report estimating the economic contribution of WiFi in African countries which is worth a read.
In TVWS spectrum, the Kenyan regulator formally released their TVWS framework in May although negotiations are still ongoing regarding a geo-location database service provider. In Nigeria, TVWS consultation appears to have stalled after being launched in December of 2020. As things currently stand, TVWS seems likely to continue struggle for adoption unless regulators work to significantly lower the barriers to access and implement the technology.
The great tower sell-off continued in 2021 as tower operators continued to acquire tower assets from mobile network operators. One of the largest tower operators, IHS, launched an IPO in October.
Datacentre investment continued to climb in 2021. Major fibre operators like Liquid and Paratus are expanding their investments in datacentres as a natural complement to their fibre networks. Dedicated datacentre companies like Raxio in East Africa and N+ONE in West Africa also launched new datacentres in 2021. Also significant was the acquisition of undersea cable operator MainOne by global internet infrastructure company Equinix. In addition to their eponymous undersea cable, MainOne operate datacentres in Nigeria and Ghana. Equinix’s acquisition may presage a more significant investment in datacentres across the continent.
The broadband-from-space race heated up in 2021 with OneWeb recovering from bankruptcy thanks to investment from both the UK and India. Spacex Starlink launched a phenomenal number of satellites with over 1800 now in orbit. Both OneWeb and Starlink have been actively soliciting African partners. Whether either satellite operator has a service that is appropriate in African countries remains to be seen. Starlink terminals cost $500 each and incur a monthly fee of $99 dollars making them an expensive option for anyone. Whether they may prove useful for as a backhaul provider for small rural networks remains to be seen.
The LEO satellite constellation news in 2021 was anything but boring. Not to be outdone by the likes of Starlink, the Rwandan government applied for a permission at the ITU to launch 327,320 satellites! No one seems to be quite clear what that is all about.
Also interesting are smaller LEO satellite startups like ASTMobile and Lynk who announced partnerships with UTL in Uganda and Aliv and Telecel Centrafrique in the Central African Republic respectively. Both Lynk and ASTMobile claim to offer “base stations in the sky” which allow mobile phones to communicate directly with satellites. Whether this proves to be technically and/or commercially feasible remains to be seen.
Last but not least, traditional geosynchronous satellite operators were also busy with SES, Eutelsat, and Yahsat all announcing new operator partnerships in 2021.
The following table is a grab bag of African telecom issues that have caught my attention in 2021. The range of announcements of investment plans in African telecoms is interesting, ranging from Google and Facebook to the World Bank and CDC. Also notable is the introduction of a new class of operator license by the Kenyan regulator aimed at non-profit community network operators. As the pressure to provide affordable broadband access to all citizens increases, thanks in no small part to the global pandemic, there is a need for new business models and new kinds of operators that can provide services where the incumbents have little or no interest. Hopefully 2022 will see other regulators act in a similar manner.
