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Summary

The fourth quarter of 2018 has seen a flurry of announcements concerning telecoms investments, acquisitions, alliances, and partnerships that will boost the availability of international wholesale connectivity to and within sub-Saharan Africa. Taken together, these developments should significantly improve the availability of long-distance, high-bandwidth connectivity and access to high-speed fixed and mobile broadband across the region.

Collaboration is essential to increase connectivity within Africa

The deployment of new high-capacity submarine cable systems around Africa’s east and west coasts over the last five years has significantly improved the availability of international connectivity between Africa and the rest of the world. However, connectivity within the continent remains a bottleneck that is holding back access to digital services in many African countries. Very few players can afford to deploy the necessary network infrastructure alone, but a series of recent wholesale announcements highlight collaborative developments that will increase the availability of affordable connectivity and access services in sub-Saharan Africa and help reduce the digital divide.

Pan-African fiber provider Liquid Telecom is working toward its objective of building a terrestrial fiber network stretching from Cairo to Cape Town that will provide wholesale connectivity and open access services to African retail service providers. Liquid’s latest move toward this end is an agreement with Kenyan Electricity Transmission Company Ketraco to provide affordable, full-fiber internet services in East Africa.

In November, submarine cable operator SEACOM announced its intention to acquire South African dark fiber provider FibreCo. This move further expands SEACOM’s African footprint beyond landing stations with additional terrestrial fiber assets. International submarine cable network owner Angola Cables has announced an alliance with South African state-owned wholesale fiber provider Broadband Infraco as a part of its strategy of improving access to communications services across the 16-country SADC (Southern Africa Development Community).

The communications satellite operator Intelsat has joined the Smart Africa public-private initiative to drive Africa’s digital transformation. Intelsat has recently announced its strategic investment in mobile base station builder Africa Mobile Networks to accelerate growth of mobile connectivity in unserved sub-Saharan communities. Avanti, another satellite group, announced in November its wholesale agreements with Afrique Telecom and Paratus Telecom to provide high-speed broadband communications services across sub-Saharan Africa. In the same month, the US Government’s Overseas Private Investment Corporation (OPIC) committed $100m of its $1bn ConnectAfrica fund to Africell in November to expand access to telecoms services in the DRC and Uganda. CDC, a UK investment group, followed suit in December with a $180m investment in Liquid Telecom to enable it to address infrastructure bottlenecks in Central and Western Africa.

The United Nations and African Union agree that access to affordable telecoms services is essential to the economic development of countries in the region. Wholesale carriers need to agree more alliances, acquisitions, and collaborations such as those announced in the last few months to improve connectivity within Africa to enable retail service providers to deploy the affordable mobile and fixed services demanded by the continent’s growing population.

Appendix

Further reading

Africa Digital Outlook, 4Q18,GLB002-000039 (October 2018)

2019 Trends to Watch: Middle East and Africa,GLB002-000035 (September 2018)

"Why invest in cable systems across the South Atlantic?" TE0012-000602 (May 2017)

Global Wholesale Market Forecast: 2016-21,TE0012-000589 (February 2017)

"Liquid Telecom advances pan-African strategy with South Africa and Tanzania acquisitions," TE0015-000423 (January 2017)

"Connectivity is still an obstacle for digital and data services in Africa," TE0015-000414 (November 2016)

Telecoms Wholesalers Enter African Enterprise Markets,TE0005-000768 (December 2015)

Africa's Fiber Explosion: Strategies for Success,TE0012-000311 (September 2011)

Author

David James, Practice Leader, Wholesale Telecoms

david.james@ovum.com

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