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Another way of looking at the poor situation in Africa is to look at Figure 10, illustrating the lack of Internet users in Africa compared to the rest of the world.
Figure 10a: | Figure 10b: |
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Costs
One result and immediate cause of this is the cost of this are costs of Internet connections in Africa.
Capacity
International capacity to African countries is mainly provided via satellite or via fibre links. Typically bandwidth costs in $/Mbits/s are 300-1000 times as expensive as fibre. However in 2004 only 14 of 49 sub-Saharan countries had access to fibre according to NEPAD. In fact as seen in Figure 11:
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There is only one large-scale intercontinental fibre link to Sub-Saharan Africa (SAT-3/WASC/SAFE) which provides connections to Europe and the Far East for eight countries along the West Coast of the Continent. Except for some onward links from South Africa to its neighbours, and from Sudan to Egypt and from Senegal to Mali, the remaining 33 African countries are unconnected to the global optical backbones, and depend on the much more limited and high-cost bandwidth from satellite links. Even the few countries that have access to international fibre through SAT-3 are not seeing the benefits because it is operated as a consortium where connections are charged at monopoly prices by the stateowned state owned operators which still predominate in most of Africa, and in many other developing regions. In fact prices have barely come down since it began operating in 2002.
The first large-scale international fibre project in sub-Saharan Africa, SAT-3/WASC's first segment connects Portugal to the Cape in South Africa reaching eight coastal countries along the way: Senegal, Ivory Coast, Ghana, Benin, Nigeria, Cameroon, Gabon and Angola. A second segment, in the Indian Ocean, connects South Africa to Malaysia while passing through Mauritius and India (SAFE). Jointly funded by 36 members and spearheaded by South African Telkom which invested US$85 million for a 13 per cent stake, the project cost about US$650 million dollars. The cable was expected to lead to much reduced international bandwidth costs, but so far this has not occurred due to the business models used to develop the project.
Landlocked African operators who have tried to purchase international fibre capacity directly from one of the consortium's international members have found themselves being charged as much to reach the SAT-3 landing point as they were charged to get from the landing station to Portugal. Sadly, the high costs have made it cheaper to send the traffic directly by satellite, even for SAT-3 shareholders such as Telecom Namibia, which has no landing point of its own.
Mike Jensen
In fact prices have barely come down since it began operating in 2002 and are sold at satellite prices of $4-8K/Mbps/mo even though the capacity is only 5% used. As a result the lack of fibre and lack of competition on SAT-2, international bandwidth to African countries, as seen inf in Figure 12 lags well behind most of the rest of the world.
Costs
One result and immediate cause of this is the cost of this are costs of Internet connections in Africa and how they relate to income and affordability.
Opportunities
Africa has close to 1 billion people or about 14% of the world's population. However, the Internet penetration shown in the table below is only about 3.6% so it is a huge potential market. However, this will introduce challenges of new business models (e.g. micro-payments, content
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in many new local languages, use of wireless for last mile connections, Internet kiosks and cafes etc.).
Interesting Trends:
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