Fixed wireless connectivity captures Africa’s broadband market
Fixed wireless access (FWA) has proven itself as a serious contender within fixed broadband technologies, and service adoption is beyond the tipping point.
This is one of the key findings in the Africa Digital Infrastructure Market Analysis 2021 report.
Compiled by Digitalthings on behalf of Digital Council Africa, the market analysis report investigates the state of key digital infrastructure developments in Sub-Saharan Africa (SSA). It looks into the digital infrastructure environment in the region, with a deep dive into selected African markets.
In terms of digital infrastructure categories, the analysis focuses on terrestrial fibre deployment, international connectivity, submarine cables, satellites, data centres, fixed last mile connectivity, tower infrastructure, and cloud and data, among others.
The report highlights that FWA is, in many cases, the quickest alternative to meet growing broadband service demand, particularly in the areas outside fibre coverage.
Additionally, the highest growth during the first half of 2021 has been in regions with the lowest fixed broadband penetration, namely Middle East and Africa, Central and Eastern Europe, Asia Pacific, and Central and Latin America.
Bora Varliyagci, CEO of Digitalthings and lead researcher on the report, told ITWeb that going forward, there will be a combination of fixed wireless broadband and fibre growing jointly.
According to Varliyagci, this will not only be characteristic of the SSA region but a global trend.
The current state of fixed connectivity in the Digital Council’s report shows growing adoption of fibre-to-the-home/business and LTE/5G fixed wireless connections. This, he points out, is evidence of a declining DSL footprint year-over-year, particularly in markets such as SA.
“There has been a decline in terms of the DSL subscriptions that are mostly being replaced by fibre, but more importantly is the significant uptake of service offering as well as the service uptake on the fixed wireless network.”
Fibre deployments are still continuing at full pace in mature markets like SA, Kenya and Mauritius, which are still the leading markets in Africa, he adds.
The report highlights SA as the market that’s seen the most significant growth within the past year, with fibre-based broadband subscriptions exceeding one million in 2021. This, it notes, represents almost half the fibre-based broadband subscriptions in SSA.
The Southern African nation is followed by Kenya, which is progressing towards the half-a- million mark, and Mauritius with over 300 000 subscribers. Meanwhile, progress in all other markets in the region has been relatively limited, it states.
“The overall household penetration of fibre-based broadband services remains below 2% in most SSA countries, with the exception of the leading markets such as Mauritius, SA and Kenya.”
Closer to home, Varliyagci says there’s been massive growth in SA’s fibre market, which now accounts for 1.16 million subscriptions as of March, compared to about 760 000 last year.
He points out that fibre networks have passed 2.56 million South African homes, to date.
“We have seen subtle growth in other markets,” he notes. “Deployments are now shifting to a wider region in terms of under-served areas and lower LSM areas. In other markets, deployments are very limited to urban, dense and high-income areas and moving slowly.
“There’s big fixed wireless broadband adoption on the market as well. All the operators have a fixed wireless offering, and it is a fast-growing market. We expect an additional 1.6 million subscriptions on fixed wireless 4G and 5G subscriptions. This will take the fixed broadband home subscriptions to roughly 2.8 million, and not only comprise of fibre but LTE and 5G delivered on fixed wireless.”
For Varliyagci, there are a number of reasons for the growth of FWA connectivity, notably LTE reach in countries like SA, which he says is quite extensive. “You have LTE coverage almost everywhere, exceeding 95% population coverage.
“Fixed wireless broadband is quite a lucrative market because operators are leveraging on invested assets, so it is in the operator’s interest to monetise it as soon as possible.
“This won’t stop fibre deployments in the country, but if you are moving out of the major areas or secondary towns, it is much faster to enable a fixed LTE or fixed 5G service compared to fibre. While fibre is obviously developing, these alternatives are also capturing footprint.”
Based on the report, the global fibre-optic submarine telecoms cable system market size was valued at $23.4 billion in 2020, and is forecast to reach $37.8 billion by 2027. The expected growth is at a compound annual growth rate (CAGR) of 7.1% from 2020 to 2027.
The report describes submarine cables as the backbone of digital infrastructure, carrying around 90% of data traffic across the world.
In the case of SSA or Africa in general, the submarine cable system has been growing at a CAGR of 45% in the past four years, with no signs of slowing down, explains Varliyagci. Globally, the average CAGR is around 29%, he reveals.
“Sub-Saharan African growth has been well-exceeding the global growth trends and this is partly due to the fact that it’s coming from a smaller base as well. As we have seen in recent years, the OTT [over-the-top]-driven submarine cable systems, like Equiano and 2Africa, will dwarf the existing capacity on the continent, even adding almost 10 times capacity as they are commissioned.
“That is the ongoing trend that brings more and more capacity to the continent, and somehow this capacity needs to be taken to inland locations.”
Within the terrestrial fibre network space, Varliyagci says across Africa there have been ongoing projects, particularly around Central Africa this year. “We’ve seen quite a few announcements coming out of the DRC because there’s a few operators that intend to bridge that east to west gap in the middle of Africa.”
In other parts, there’s been ongoing regional and national inter-connect projects, so there is no slowing down, he states.
However, the lead researcher maintains there’s still quite a lot of deficit to make up for from a Sub-Saharan Africa point of view. As a result, there is no slowdown expected from terrestrial fibre deployment.
The continent is just getting to 1.2 million kilometre operational fibre footprint, with an additional 200 000km to be added within the next year-or-so, Varliyagci concludes.