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Africa’s second communications revolution

Written by  Pieter Uys
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Pieter UysIssue:Global-ICT 2009
Article no.:11
Topic:Africa’s second communications revolution
Author:Pieter Uys
Title:CEO
Organisation:Vodacom Group
PDF size:216KB

About author

Pieter Uys is the CEO of Vodacom Group. Prior to his appointment as CEO, Mr Uys served as the Vodacom Group’s Chief Operating Officer and, earlier, as Managing Director of Vodacom SA. Mr Uys joined Vodacom Group as a member of its initial engineering team. Mr Uys holds Bachelor of Science and Master of Science degrees in Engineering from the University of Stellenbosch and a Master of Business Administration degree from Stellenbosch Business School.

 

Article abstract

Mobile phones made it possible for millions of Africans to make their first telephone call ever. A second communications revolution will bring the Internet to millions more, enabling Africans to bridge the digital divide. Today, African Internet connectivity is among the lowest in the world - most access the Internet at LAN houses and cybercafés. Africa overcame its lack of voice service with the cellphone. Now mobile broadband promises to make up for the lack of a fixed broadband infrastructure.

 

Full Article

Over the past decade and a half mobile phones have made it possible for millions of Africans to make their first telephone call ever. Now Africa is on the verge of a second communications revolution that will democratise the Internet and email for millions more, enabling Africans to break free from digital poverty. To paraphrase the theme of the ITU Telecom World 2009 event ‘Open Networks - Connected Minds’, there are millions of minds all over Africa craving to be connected to the rest of the world. While globalisation and digital communications have ‘flattened’ the world by allowing all those who are connected to communicate and do business with each other, Africa has remained an unconnected mountain. It is the least connected continent with 6.64 per cent Internet user penetration and only 0.91 per cent Internet subscriber penetration; this falls to 4.10 per cent and 0.62 per cent respectively for sub-Saharan Africa and drops even further to 3.80 per cent and 0.18 per cent when South Africa is excluded, according to 2008 ITU statistics. Starved for communications technology, Africans have an incredible craving to be connected, to communicate and to be in touch with the world. Over the past few years I have travelled thousands of miles all over Africa and seen first-hand how the dawn of data communications is finally breaking through the dark clouds of the digital divide. If you walk through any big African city you will see hundreds of people hunched over computer screens in Internet cafés that have mushroomed along boulevards and side streets. Some 85 per cent of Africa’s Internet users only have access at Internet cafés, but that will change over the next few years as mobile broadband makes inroads in Africa and turns 3G handsets into every customer’s personal and mobile cybercafé. The benefits of crossing the digital divide have been quantified in many studies, but we can safely accept the widely quoted statistic of a one per cent increase in Internet penetration resulting in a $176 per capita increase in an African country’s Gross Domestic Product (GDP). Africans know better than anyone that on the far side of the digital divide sit the dramatically improved possibilities of a better education; good chances of matching skills to employment as well as entrepreneurial opportunities; and access to a world that has up to now simply been a distant dream. Democratising the Internet and email in Africa opens the continent up to Internet commerce, outsourcing, virtual enterprises, home-working, eGovernment, education and remote medical assistance. Mobile broadband will add mobile advertising and banking, mobile instant messaging and social networking. Africa is now ready to leapfrog to the front of data communications in the same way that it leapfrogged across its lack of fixed line infrastructure to embrace GSM mobile phones. Again, mobile technology is the best way forward for Africa. The digital divide is in reality an infrastructure divide that can be overcome by mobile technology. On a continent with a stagnant fixed-line penetration of one per cent, mobile can fill the void; it is the only viable way to bring affordable broadband access to all. Mobile telecoms itself has evolved into the broadband space with technologies such as 3G, WiMAX, HSDPA and, soon, LTE. Combined with the sharp drop in the price of computer-like 3G handsets, mobile broadband will become a reality for many on the continent. Bundled laptops and data packages have boosted mobile broadband in South Africa; we alone have almost 750 thousand users. An instant infrastructure solution especially for rural areas, is VSAT (Very Small Aperture Terminal), which connects to a central hub via satellite using small antenna dishes. It is a cost-effective solution that can bring data communications, Internet, Local Area Network (LAN), voice and fax communications to distant communities all over the continent. The Internet is used differently in Africa from anywhere else in the world. Given the still high cost and lack of infrastructure, especially in rural areas, the idea of one user, one connection is a strange notion. Internet access, like many other facilities such as television, telephones, water and electricity are often used communally. Public Internet access has popped up all over Africa in schools, libraries, clinics, community phone shops and of course Internet cafes. Like Maslow’s hierarchy of needs in which humans satisfy their basic needs before moving up the pyramid to more sophisticated needs, people and communities in Africa will access the Internet according to their needs. At the bottom of the pyramid is access to basic information - usually taken for granted in developed countries, but can have a powerful effect on people’s lives. For example, the fisherman in Tanzania who can access market prices on his mobile before selling his catch now has a financially empowering tool. Democratising the Internet can make more difference to the life of an African than almost anyone else in the world. Eventually communities will create the local content that is important to them, becoming their own broadcasters and educators, using isolated and less broadband intensive networks. Sharing local information and allowing access to services, such as Internet access to a local authority, can enable communities to go beyond information societies and create knowledge societies; even if it that knowledge society exists in a village two days’ drive from the nearest city. Many solutions have come out of Africa itself. Innovations like Streetwise, which we are currently evaluating, is a ‘lean content’ Internet terminal on a street corner with a built-in GPRS modem. The low-cost, robust terminal offers email, Internet search and news functions, fax and scan interface and business tools like e-forms, templates and wizards. The most promising development for mobile broadband in Africa is the digital dividend spectrum - an Ultra High Frequency (UHF) spectrum that will become available with the switchover from analogue to digital television. These UHF radio waves at 800 MHz can travel further and deeper into buildings and rural areas and, depending on local conditions, can provide mobile broadband coverage much more efficiently than the current 2GHz spectrum. It is the UHF spectrum that will drive the mobile broadband revolution in Africa. But the digital dividend is a longer term scenario. In South Africa the target switch-off date for analogue TV transmissions has been set as November 2011, but we cannot realistically expect the digital television migration to be fully complete in sub-Saharan Africa before the regulatory deadline of 2015. However, it is crucially important that a number of far-reaching decisions on this frequency be made now. Africa must not find itself in a situation where this prime spectrum is allocated to obsolescent technologies or to unviable network operators. In Europe the GSM Association has already called on governments to commit this spectrum to mobile broadband services. Africa can simply not afford to be left out in the cold as a digitally divided backwater. Regulators on the continent need to adopt a consistent vision to benefit from the economies of scale that harmonisation of the spectrum will bring, especially by making the handsets operating in this spectrum affordable. Africa now sits at a classic tipping point, where radical change is possible if it is properly enabled. The technology and solutions are available to put Internet and email into the hands of millions and it is a development opportunity that cannot be missed. By promoting the market structure, government and regulators will play a key role in enabling this communications revolution. Many international gateways in Africa are still monopolies, stifling growth by increasing the cost of doing business in a global market place. Open-access fibre-optic cables will reduce the cost of connectivity, while creating fast, reliable and affordable Internet connections. To date one of the biggest obstacles to higher telephone and Internet penetration in Africa has been a short-sighted approach to taxation. Governments have often focussed on short-term gains by charging high prices for spectrum and licence fees, import duties on handsets and imposing stifling taxes on network operators. High import duties on handsets have resulted in about a third of handsets in Africa being bought on the black market. A tax study by the GSMA found that if low-cost handsets were exempted from import duties and sales taxes an incremental 1 billion handsets could be sold over a five-year period. High taxes reduce return on investment, limiting investors’ interest in capital-intensive network expansion, and when there’s no network growth, penetration doesn’t increase and prices remain high. If fiscal and regulatory bottlenecks are removed the industry’s cost structure will fall, services will become more affordable and usage will increase. Consistent and fair regulatory practice lowers the cost of capital, which is a major factor in the cost base of a capital-intensive industry. The challenge is to persuade governments to shift their focus from the short-term benefits of taxation to the long-term and more lucrative benefits of boosting economic growth through Internet and telecommunications penetration. A climate that nurtures economic growth encourages a healthy cycle of investment, network and technology development, higher penetration and affordable service. This is the cycle that can help Africa to bridge the digital divide and achieve sustainable economic growth. Africans are doing it for Africans. Enabled by an efficient market structure, we can take the best that technology has to offer and use our African ingenuity to bring about a true communications revolution that can touch the life of every African.

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