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What's the economic case to adopt 5G in Africa?

Mature network operators and service providers in the greater African context have indicated 5G is the goal but not within two years.
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It is crucial to understand that 5G adoption is a commercial proposition. While there are many use cases, and many of them for noble cases such as advanced healthcare, and many use cases that would be beneficial in Africa, it is always important to consider the business case in context.

That is why 5G ORAN in Africa is not going to follow the lead of models emerging in Japan, Europe and the US.

And that is why I say African operators need a connectivity play, not a feature set play.

5G is providing enhanced mobile broadband connectivity and massive machine-type communication. That is why use cases such as smart farming, smart cities, digital mining, smart logistics, advanced healthcare, Industry 4.0, modern mining, oil and gas, as well as personalised and hyper-efficient retail have caught the imagination of many through the media.

All of those are possible but not all of them are probable on a wide scale across Africa. In many cases we have more pressing challenges in Africa and will therefore most likely allocate our resources where we can commercially stimulate solutions.

For example, 5G can yield enormously positive results for smart farming in nations with developed infrastructure. But The Borgen Project, a non-profit addressing hunger and poverty in Africa, estimates as much as 65% of farming in Africa is subsistence farming.

Investments in African agriculture are unlikely to focus on 5G-based crop production automations using swarms of internet of things devices to autonomously sow, sustain, then harvest crops.

The same is likely true for mining and commodities. Africa produces huge quantities of mineral commodities. As much as 92% of platinum, 73% of diamonds and 89% of gold throughout the world come from African countries. The continent also produces significant quantities of uranium, bauxite for aluminium and copper.

For significantly less investment, network operators can now build out their ORAN platforms, preparing for the time they switch niche geographies to 5G.

But African operations have yet to see significant investments in smart mining digitalisation, even in the mid-tier sector, and even when considering limited geographies. Not least among the challenges are the economic realities of cheaper labour and commodity pricing volatility.

In terms of advanced healthcare, Africa could definitely benefit from advanced healthcare services made possible by 5G technologies, but perhaps the more immediate concern remains the provision of primary healthcare.

The United Nations World Health Organisation points out that 50% of the world’s children younger than five who die of pneumonia, diarrhoea, measles, HIV, tuberculosis and malaria are African. Remote, robotic surgeries could help to transform life-saving operations, but the distribution and regular administration of various vaccinations and medical interventions could arguably do as much or more.

With that in mind, it’s interesting to see that almost every one of the more than 1.2 billion Africans either directly or indirectly already use some form of cellular communication. 2G is still a significant technology in Africa. Its chief benefits are long-range, low-power requirements, and the cheap handsets that go with it. It’s accessible, enables low volume, long distance, low bandwidth communications ideal for Africa’s geography. And banking services that use it are reliable and cost-effective.

In this context, there’s no question why African network operators want a migration path that enables them to flick a 5G switch when the time is right, but continue to maximise these older technologies that have significant investments, have been proven to work and are in demand.

Maximising current investments, and developing markets to support their migration to and gradual introduction of 5G services, is a new opportunity for the service providers.

This changes previous approaches in the industry that would typically have network operators drop a few hundred million dollars to rip and replace network infrastructure whenever a new generation technology comes along.

For significantly less investment, network operators can now build out their ORAN platforms, preparing for the time they switch niche geographies to 5G, while simultaneously developing their markets and revenues to support that migration.

Mature network operators and service providers in the greater African context have indicated 5G is the goal but not within two years. Instead, they prefer an ORAN migration that prepares them to gradually introduce 5G services on an integrated ORAN backplane.

ORAN technologies offer African operators and service providers a unique opportunity to maximise their 2G, 3G and 4G investments while still gearing for eventual 5G services.

The business case for ORAN leading to 5G in Africa is to use it to integrate the 2G, 3G and 4G backplanes, creating a common rail that will later include 5G, with some upgrades. It also establishes a model to reuse older generational spectrum kit to cover network dead zones, upgrade services and offer higher bandwidth to new and existing markets.

In my next column, I’ll get into more detail about how to work with cellular service providers to enable that transformation process.

Willem Wenztel

Head of wireless networking, NEC XON.
Willem Wenztel is head of wireless networking at NEC XON. He is a proficient telecommunications executive and consultant, with nearly three decades of experience as an engineer, technical director and managing ICT operations, including the supply chain. Wentzel currently leads NEC XON’s 5G O-RAN strategy. He has been with NEC XON for 17 years, transitioning into the new organisation from NEC Africa when XON became an NEC subsidiary. 

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17 Aug
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