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Watershed year for African telecoms

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Regulatory developments and continued investment in broadband infrastructure by various submarine and terrestrial cable operators will characterise the sub-Saharan Africa telecommunications market this year.

This is according to the latest findings by technology research firm IDC, which predict 2010 will be a defining year for Africa's telecoms sector. The continent's infrastructure will be put to the test during the Fifa 2010 World Cup, notes the firm, determining the robustness and relevance of submarine cable systems, terrestrial backhaul networks, metro networks, and more.

"Despite the poor economic conditions that prevailed in 2009, the African telecommunications market will move another step forward in 2010," says IDC East Africa regional manager, Francis Hook. This comes as further regulatory developments gradually open up the market for increased competition and advanced services, he adds.

However, Africa will still experience broadband access gaps in 2010, as operators are likely to go after the low-hanging fruit in the business market, before addressing smaller market segments, notes the IDC. Thus, satellite connectivity will remain relevant in 2010, particularly in outlying and rural areas.

"Developments in broadband connectivity, triggered by various submarine systems due to go live in 2010, will heavily impact the wider market, although last-mile access and affordability will be key challenges that need to be addressed," says Hook.

IDC predicts the next wave of interest by investors and pan-African operators will be in terrestrial broadband networks in the largely untapped Central Africa region, leading to a further reduction in prices.

Hook expects mobile broadband to prevail as fixed-line services continue down the road to a gradual but inevitable demise.

Research for 2009 showed Africa's telecoms channel accounted for 3% to 4% of all mobile/portable units shipped. Governments will continue efforts toward higher penetration among citizens, particularly in rural areas, and are likely to see mobile phones as a way of saving money and communicating with citizens, states the IDC.

Currently, African mobile penetration rates average 25% to 45% of the entire population, but the rate for the adult population, with which governments would be interacting, is roughly 70% to 80%.

According to the firm, operators and vendors will look more closely at social networking, news portals, and other content to grow data revenue, which will entail providing relevant content in local languages.

As the availability of low-cost devices is an important factor in the adoption of these offerings, telcos will become an increasingly important channel for notebook, netbook, and smartphone vendors, states IDC.

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