Politics News & Analysis Africa: Fast internet is coming!

Thu,24May2012

Posted on Thursday, 02 February 2012 18:20

Africa: Fast internet is coming!

By Julien Clémençot and Olivier Milland

altConstruction of two new submarine cables will mark an important step in the development of internet infrastructure in West Africa. But all the barriers to its general distribution are far from being removed.

At first glance, West Africa's stifling digital divide still chokes the growth of internet use in the region. Internet is still very expensive. A monthly private subscription for a 1 mega-octet broadband connection is charged US$149 in Burkina Faso and Côte d'Ivoire, about US$170 in Benin and more than US$197 dollars in Cameroon.

Only Senegal, with price reductions between 10 and 15 percent in recent years, is getting closer in terms of accessibility to prices in North Africa.

A 1GB connection costs US$50 in Senegal, whereas it only costs US$23.5 in Tunisia and around US$12 dollars in Morocco.

However, 2012 is expected to be a turning point in Sub-Saharan Africa. Two new submarine cables - West Africa Cable System (WACS , mainly controlled by MTN, a South African operator) and Africa Coast to Europe (ACE, a France Telecom-led consortium) - will in a few years link together most of the African coastal countries.

This will imply huge investments of up to US$700 million for ACE and more than US$600 million for WACS. This is expected to increase the available bandwidth to international standards.

Competition

More importantly than the additional capacity increase is the apparition of sector competition, albeit limited, for the first time between telecommunications companies which will push prices down.

"In the immediate time, price reductions for internet subscriptions will not entirely reflect the bandwidth expansion because no one wants to see business figures collapse. It is rather the speed offer that would increase," said Olivier Leloustre, head of Ringo Market Leader in Cameroon.

But while some countries, such as Nigeria, benefit from a healthy competition, not all countries will be that lucky. For example, WACS will only serve in MTN's main West African markets; Cameroon, Côte d'Ivoire, Ghana and Nigeria.

However, an increase in the number of cables does not necessarily mean an increase in the number of operators.

But Africa's connected future does not necessarily mean that every country stands to benefit. In Cameroon and Benin, incumbent telecommunications companies have maintained a de facto monopoly on cable access and the installation of fibre optic networks.

Not surprisingly, these countries have the highest prices in West Africa. Some private companies also benefit from their advantaged positions because they have large networks serving landlocked land areas.

According to an expert "bandwidth price can be multiplied by 10 if it is sold to a competitor". In order to skirt this difficulty Maroc Telecom Group (MTG) has launched the construction of a fibre optic loop, via the Sahara desert, through Mauritania to Mali and Burkina Faso. MTG is active in these three countries, which have so far been serviced by France Telecom by virtue of Sonatel or Côte d'Ivoire Télécom.

Exchange point

Aware of the difficulties that come with regulating the market the African Union, like the World Bank, the AU is advocating in favour of the construction of a high-speed network that can offer economically fair access to internet operators.

With time, the AU could even go as far as imposing regulation sales prices for bandwidth. At least that's the philosophy of the Programme for Infrastructure Development in Africa (PIDA), implemented jointly with the African Development Bank (AfDB).

In the short term, internet users witness the increase in number of Internet exchange points (IX or IXP) between networks of different providers. Cameroon and Benin will soon benefit from this development. These links will put a stop to situations whereby emails sent from Douala to Yaoundé pass through Paris because the correspondents do not use the same provider.

IXPs will also allow for a faster local content exchange. As deplorable as it is, the fact remains that the vast majority of sites visited by Africans is still hosted outside the continent.



Last Updated on Thursday, 02 February 2012 19:02

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