Real Time Communications Featured Article

Africa's Tech Boom Big for Real Time Communications

November 07, 2014

Slowly and surely, the information and communication technology (ICT) powerhouses of the world have been investing in Africa.  The continent is the ultimate "Greenfield" for infrastructure projects and where companies such as Huawei, IBM, Microsoft and Orange expect to reap big dividends in the years and decades to come.

Africa’s attraction is a pristine, untapped market when compared to Asia and Latin America.  There's little legacy infrastructure, meaning anyone with the will and a wallet can carefully pick the right places to start small, take the time to go slowly and properly build infrastructure, and then create the appropriate products to grow business.

For example, Kenya's mobile and fixed telecommunications markets are expected to grow at a compound annual growth rate of 5.2 percent by 2018. Last year, Kenya had estimated telecom revenues of around $2 billion, a 13.9 percent increase over the previous year -- a growth rate that U.S. telecoms would love to have. Remarkably, this comes with adoption of 3G tech at only 16 percent of the mobile subscriber base today.  LTE is in the talking stage, with no operators having secured a license at this point.

 Mobile data was the most important growth driver between 2012 and 2013 in estimates generated by Pyramid Research. Earlier this year, Orange committed almost $29 million into upgrading its 3G network across Kenya, including an expansion of the government-owned National Optic Fiber Backbone. 

Orange last month reported combine mobile growth between Africa and the Middle East of 11 percent year over year with more than 94 million customers.  African gains help with the company's revenue declines in Europe, especially in France, Poland, and Spain.

The most significant piece of infrastructure Orange holds are multiple large scale undersea fiber projects throughout Africa. Started in 2010, ACE (Africa Coast to Europe) is a 17,000 kilometer long broadband project being built on the West Coast of Africa to provide broadband connectivity from France to South Africa.  Currently, the cable extends down to Gabon with Phase 2 construction to complete the southern half underway.

ACE and other coastal fiber projects provide backbone connectivity for new wireless projects. Vantage Capital is putting in $30 million in Surfline Communications to expand the build out of Surfline's LTE network in Ghana.  Surfline started operations in 2011 and currently provides LTE coverage around the Accra area. The money will go to building out infrastructure (i.e., more cell towers) and marketing operations.

IBM's 10 year commitment to Africa includes a research facility in Nairobi, a $100 million investment to apply its Watson cognitive technologies to fuel development across the continent and new offices in seven countries over the past 5 years. The company operates IT services for a large mobile phone carrier across 17 countries, provides mobile banking services across the region -- including a cloud solution for Surfline Communications. Just announced this week by IBM are engagement and analytics support efforts to combat the Ebola outbreak in West Africa.

The Brookings Institute identifies rapid urbanization and a growing middle class as factors that could generate hundreds of millions of consumers. Add in the youth factor -- half the region's population is under 25 years of age, says the World Bank -- and the region is primed for Real Time Communications solutions and numbers that could ultimately exceed that of the United States in the next decade.


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