Failing grade for African broadband

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Broadband challenge

Thanks largely to the cellphone revolution in the developing world, the World Summit on the Information Society's goal that “more than half the world's inhabitants have access to ICTs within their reach” by 2015 has largely been met. The UNCTAD says this does not mean there is room for complacency, however, and points to the lack of quality, affordable broadband as a continuing key challenge.

African cellphone subscriptions have grown faster than any other region of the world since 2003 - a recession-defying 550% from 54 million to almost 350 million in 2008 - but urgent action to improve slow and costly Internet access on the continent needs to be taken.

This is according to a recently released report from the United Nations Conference on Trade and Development, which states that while digital inequality is shrinking, the gap varies according to the type of technology.

The UNCTAD's Information Economy Report 2009: Trends and Outlook in Turbulent Times heralds the rapid proliferation of mobile technologies, particularly in sub-Saharan Africa, as a force for the good, but states that greater effort must be put into addressing broadband Internet, an area in which African nations are consistently failing to keep up with global trends - a reflection of the continent's poor telecommunications infrastructure, according to the report.

A mere five countries - Algeria, Egypt, Morocco, South Africa and Tunisia - account for 90% of all African broadband subscriptions. Australia, with 21 million inhabitants, has more broadband subscribers than the whole of Africa, according to the report.

Even taking into account the relatively high performance of the top five African states, “other developing regions often boast a broadband penetration 10 times higher than Africa”. And while the report points to “occasional success stories”, the finding is that the promise of wireless broadband for developing countries is still far from being realised, with little evidence that it has had a significant impact on a wide scale.

As South African users will be all-too aware, the UN points to affordability as a key inhibitor of broadband use: In 2008, the average fixed broadband price at purchasing power parity was $27.6 for developed countries and $289 for developing countries. Of the 20 countries with the most expensive broadband, 14 are in sub-Saharan Africa; perhaps unsurprisingly, the region has the lowest per-capita international bandwidth in the world.

International Internet bandwidth by region, 2008 (bits per capita)

Regulate or roll over

Repeated references to the economies of scale offered by large populations are pointless, says the UN. "Large potential market is not sufficient in itself to trigger broadband growth; a threshold of purchasing power and a regulatory environment that encourages competition are also needed.”

Fine-tuning the policy and regulatory environment is typically more important than any other step a government can take to promote broadband growth, according to the report. Europe's dominant position on the broadband penetration billboard (it occupies the top seven places and accounts for 18 of the top 20) “may reflect the strong regulatory push towards local loop unbundling... that has resulted in a number of new competitive broadband suppliers entering the market”.

The limited availability of fixed lines in many developing countries constitutes just one reason why such an environment is not common, but restrictions in telecommunications and broadcasting laws are also key culprits, particularly in restricting the spread of wireless broadband technologies: “Needed spectrum has often been awarded to incumbent operators either by direct awards or through high licence fees that only established companies can afford.”

The recommendation is that specific frequencies be reserved for new operators, facilitating the entry of new players in order to increase the diversity of supply and reduce prices.

The report also recommends steps such as encouraging operators to share state-of-the-art backbone infrastructure and maximising competition by encouraging a variety of operators and technologies. Reducing or eliminating barriers to market entry and fully allocating spectrum, especially frequencies needed for 3G and fixed wireless broadband technologies should form the backbone of strategy. The report also repeatedly underlines the importance of exposing operators to competition, both within and between technologies such as ADSL, cable, fibre-optic and wireless, stating: “The healthiest broadband markets have a high degree of both intramodal and intermodal competition.”

The 10 most dynamic economies in Africa in terms of increased penetration of mobile subscriptions, Internet users and broadband subscribers per 100 inhabitants, 2003-2007/2008

Sweet cell of success

The cellphone, then, is the real success story on the continent: by 2008, Gabon, Seychelles and South Africa boasted almost 100 subscriptions per 100 inhabitants.

Of the five African countries that have a mobile penetration rate of less than 10 (Burundi, Djibouti, Eritrea, Ethiopia and Somalia), “they were characterised by either monopoly service provision or the absence of established strategic mobile investors”. In the rest of the continent, the cellphone's role is felt throughout societies, with a majority of micro-entrepreneurs on Egypt and South Africa indicating they helped increase profit, including by enhancing the flexibility of doing business. SMEs, meanwhile, report 76% cellphone use in Africa, with only 48% using fixed lines to do business; for many, the cellphone has overtaken the PC as the most important tool for helping to run their business.

Reaching beyond the smaller sector, the cellphone industry itself is a major employer on this continent, with over 100 000 people working in the sector and related industries.

The report underlines the critical importance that international fibre-optic cable projects will have on the continent, but says that, despite the positive trends in mobile communications, there is no room for complacency; a truly inclusive information society requires commitment to a long, unfinished agenda.

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