- Total broadband adoption in Africa will increase at a CAGR of 28 percent through 2013 as new undersea cables boost Africa's international bandwidth, a new report from Pyramid Research has stated.
The report further said the undersea infrastructure will further reduce the number of coastal countries without any cable access from 19 to one.
The report, Africa Connect: Undersea Cables to Drive an African Broadband Boom, describes in detail the upcoming evolution of Africa's international bandwidth market, as five major new cables and a host of smaller ones deployed and to be launched over the next three years.
The 15-page report then discusses how this increase in capacity will affect African broadband end users, driving adoption of fixed and mobile broadband by reducing tariffs by up to 72 percent. It further examines how this changed environment will affect African broadband operators and looks in detail at two key markets, Egypt and Kenya, to see how their contrasting regulatory environments will affect the impact of the newly available bandwidth.
The report states that the biggest change to African telecom markets over the next three years will be invisible. "Twelve new undersea cables planned for launch between third quarter 2009 and mid-2011 will remove the most serious obstacle that has historically prevented operators from taking advantage of Africa's great unmet demand for broadband services," said Dearbhla McHenry, analyst at Pyramid Research and author of the report. "As a result, the cables will increase Africa's total international bandwidth from about 6 Tbps to as much as 34 Tbps and will reduce the number of coastal countries without any cable access from 19 to one," she added.
"Through the end of second quarter 2009, 40 percent of continental Africa's 47 nations had no direct cable connections at all, forcing operators to rely on expensive satellite links," Ms McHenry explained, adding: "The combination of heavy reliance on satellite and monopoly control of local access to undersea cables meant that prices were also astronomical: Rates for SAT-3, for example, are about US$4,500 to $12,000 per Mbps per month, which is more than 20 times more expensive than bandwidth prices in the US".
The quintupling of Africa's international bandwidth will support the upcoming boom in African broadband adoption by increasing capacity and bringing down prices for end users. "By early 2011, we expect that more than half of all African markets will have 3G, while broadband coverage is increasing daily via both wireless and wireline technologies," Ms McHenry commented, adding that the forecast is that total broadband adoption in Africa will increase at a CAGR of 28 percent from 2009 to 2013, as increased competition in the international bandwidth market brings down prices and as new cables support the corresponding increase in demand.
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