South African provider Cell C’s LTE launch in September 2015 brought the number of live LTE networks in Africa to 50. Many LTE deployments on the continent have been carried out by ISPs migrating existing WiMAX subscribers to their newly launched LTE platforms. This migration trend is decisive for LTE uptake and also for the African broadband landscape, which is being reshaped as WiMAX networks are phased out in favor of LTE.
Nigeria leads WiMAX-to-LTE migration in Africa
Nigeria is a key market to observe in terms of WiMAX-to-LTE migration in Africa. Nigerian WiMAX users made up 50% of Africa’s 600,000 WiMAX subscriptions in 4Q14; this share dropped to 39% after the country’s WIMAX subscriptions declined by 34% over 1H15, compared to a 16% decline across Africa.
In Nigeria, all LTE networks but one are deployed by ISPs or data-only networks. MTN is the only traditional MNO having launched (in July 2015) an LTE network. Most Nigerian LTE operators including MTN are migrating their existing WIMAX base to LTE, while the other players such as Smile Communications started from scratch with LTE.
This is also going to be the case for new entrant Natcom. The company is a local consortium that bought state-owned incumbent Nitel in 2014. Natcom is rolling out LTE using spectrum in the 1800MHz band while waiting for auctions in the 2.6GHz and 700MHz bands. It soft-launched in early November 2015 under the brand Ntel with 800 sites, and it plans to have 2,000 live sites by 1Q16.
Ovum forecasts that the number of WiMAX users in Nigeria will drop by 54% for the year 2015, compared with a 22% decline in Africa as a whole. Migration to LTE is set to be fast, as fixed LTE devices are now more widely available and priced in the same range as WIMAX ones. Another key factor is spectrum availability: while frequencies in preferred bands such as 700MHz are yet to be assigned, operators can refarm spectrum previously used for WiMAX in the 2.3GHz and 2.6GHz bands. MNOs are also refarming spectrum in the 1800MHz band that was initially allocated to GSM.
Ovum forecasts that by 2020, the share of WiMAX users to total fixed broadband users in Africa will drop to 3% (from 6% in 2015). This assumption is based on the mid-2015 landscape, but as LTE African operators’ LTE and post-3G strategies become clearer, the WiMAX decline could be even faster.
Fixed Broadband Subscription Forecast: 2015–20, TE0009-001468 (October 2015)
LTE in Emerging Markets: Smile takes an innovative greenfield approach to 4G, TE0009-001443 (July 2015)
Thecla Mbongue, Senior Research Analyst, MEA