Africa will soon have greater access to the Internet as a result of digitisation (the migration from analogue to digital technology), which will further help to bridge the digital divide between emerging and developed markets.
This is according to consultancy firm KPMG, which reveals that Internet penetration in Africa, at 15.6%, is about half the world average. While some may see this as cause for concern, says KPMG, it is not a true reflection of the level of access on the continent where individuals may not own terminals but access the Internet at cyber caf'es.
The firm points out that digitisation directly impacts both telecommunications and the broadcasting sectors.
The successful completion of the digitisation process will result in a complete closure of analogue transmission and act as an enabler for growth in both sectors, it notes.
Adding value
However, for these sectors to add value and to increase, profit points will largely be dependent on easier, wide-spread and more cost-effective access on the continent.
"In fact, it is estimated that digitisation will bring about a further drop in telecommunications carriage fees, and drive growth in ARPUs (average revenue per users), thereby increasing profitability and allowing content producers to focus on better material," says Joseph Tegbe, partner in Management Consulting Advisory, West Africa Lead, technology, media and telecommunications at KPMG Nigeria.
"Digitisation will not only impact the telecommunication industry but also the film industry, financial service, agriculture, healthcare, consumer market and education sectors."
Meanwhile, SA's move to digital television is long overdue and is one of the issues recently appointed communications minister Faith Muthambi will tackle.
SA's move off analogue television to digital - which has been in the pipeline since 2006 - has repeatedly been delayed. The latest snarl-up is a dispute between broadcasters over set-top box controls.
Narrowing the gap
According to KPMG Research, digitisation also impacts unemployment rates, GDP growth, as well as the literacy levels of countries, thus narrowing the gap between developing and developed economies.
Emerging markets are more export-oriented and driven by tradable sectors, says KPMG. As a result, it adds, they tend to gain more from the effect of digitisation on employment than from its influence on growth.
It creates jobs, with a 10-point increase in the digitisation score leading to a 1.02% drop in the unemployment rate. This is almost five times greater than the effect that the widespread adoption of broadband has on reducing unemployment, the firm elaborates.
"Analysis reveals that an increase of 10% in a country's digitisation score fuels a 0.75% growth in its GDP per capita. As an economic accelerant, digitisation therefore is 4.7 times more powerful than the 0.16% average impact of broadband deployment on per capita GDP," adds Tegbe.
"Additionally, the economic effect of digitisation accelerates as countries move to more advanced stages of the process. Digitally constrained economies receive the least benefit, largely because they are yet to establish an ICT ecosystem that can capitalise on the benefits of digitisation."
Knowledge economy
KPMG believes that transition from analogue to digital technology would mean an increase in data and information and would see the African economy shift more rapidly to a knowledge economy. This would mean that the gap between the rural and urban areas will also be reduced, thus improving literacy, it states.
But it is not through digitisation alone that Africa will grow in the connected landscape, says KPMG.
"Broadband creates an enabling environment for businesses and governments. Therefore, it improves overall productivity and creates jobs. Jobs such as construction works, trenching, laying of fibre-optic lines and installation of wireless towers will increase as broadband penetration increases," says Tegbe.
"Broadband penetration will help promote and fund entrepreneurship and IT Initiatives and allow for a more skilled workforce that can take up outsourced IT jobs in major institutions. It also creates a knowledge economy to support e-healthcare and e-education provision, which are managed by content providers of such services."
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