Spinoza said, "Nature abhors a vacuum" - in much of Africa, for too long there was an information vacuum; Central and Western countries, in particular, have lacked a real landline infrastructure.
A lack of infrastructure, combined with the scarcity of international bandwidth, has limited the organic growth of communications services. Nature though, has taken its course. The vacuum seal was broken by the advent of the Internet, dropping communications hardware costs and increasing the robustness of links. The break widened with the mobile revolution, overcoming the landline challenge and filling large areas with live signals. Now with the introduction of the new Seacom undersea cable, the last barrier has been removed and the premium on international bandwidth should begin to fall.
Firms forecast boom
As voice remains king in Africa, the focus of most mobile deployments and planning for the next few years will primarily be to extend ubiquitous low-cost voice services for pre-paid customers. Interest in broadband services is growing and the Seacom undersea cable will help drive broadband adoption, but still only a small percentage of the available customer base - less than five percent of the total subscribers in EMEA - can afford these new services. Today, the vast majority of subscribers in Africa are pre-paid at average revenue per user (ARPU) of less than US$10.
Nevertheless, the mobile industry in Africa is growing at twice the rate of Europe. By 2011, the Middle East and Africa are forecast to have more than 40mn subscribers, creating a market worth more than US$6bn. Twenty-four million of those users will be in Africa.
The bulk of these new subscribers will use traditional GSM-based technologies, although the GSM Association predicts the introduction of high-speed packet access (HSPA) technology is growing at a significant pace - more than 200mn users worldwide by the first quarter of 2010. The result is proven technology and low equipment prices, which further fuel growth.
It is in this context that industry associations, analyst firms and financiers around the world are forecasting a communications boom in Africa. Specifically, they expect to see a dramatic growth in mobile broadband across the continent.
HSPA provides users with speeds of up to 14mbps in its original form, although speeds of 42mbps have been achieved with the 'HSPA+' variety, already in operation in some parts of the world such as Australia. These speeds open up interesting opportunities for innovation from service providers, and exciting applications and experiences for end users.
Enabling innovation
The international media has been flooded with stories of African entrepreneurship based on mobile communications: single mobile phones charged at an hourly rate as a payphone service for whole villages; car batteries rigged at markets as mobile charging stations; Internet cafes springing up with single machines on a mobile broadband connection. These occasionally patronising portraits are just the beginning of the coming revolution.
The true benefits of mobile communications only begin to emerge with ubiquity, and that will only come with falling prices. With the new undersea links and increased market competition from the likes of MTN, Orange, Orascom, Vodacom and Zain, falling prices are now a reality.
At Mobile World Congress earlier this year, Zain showed one potential application that could have a major impact: mobile banking. In a continent where millions of people are unbanked, using mobile devices to deliver an intuitive and easy-to-access banking service has enormous potential for both revenue and social benefit. The experience in South Africa during the past five years, where mobile technology is used to support mobile banks and micro-ATMs, shows the latent demand for banking services. By putting them directly in the hands of the end user, mobile operators can take this success even further.
Scaling for entertainment
Mobile banking is an appealing case study because of its development value. It is a 'worthy' mobile broadband application, and it is likely to be very successful. However, there are many more frivolous applications that could well take hold across the continent, and these applications may place a much higher burden on the networks than text-driven mobile banking.
The lesson of the web has been that as bandwidth and hardware prices fall, each generation of users creates a new generation of applications. Web and mobile usage varies widely between different countries, let alone different continents. What is common, however, is that applications almost invariably trend toward high-bandwidth availability. As soon as Apple introduced the iPhone with all-you-can eat tariffs, mobile web usage exploded, with much of it based around rich content: social media, image sharing and application downloads. Even the text-driven Twitter, which spans the web and mobile worlds, is often an engine for sharing more high-bandwidth content, such as images, videos and applications.
Once prices begin to fall in Africa, the applications that drive traffic also are likely to trend toward the media-rich and high bandwidth. As well as valuable applications for business, welfare and education, there is likely to be some measure of entertainment driven content: perhaps social networks, audio streaming, or even user-generated content. Only time will tell what these applications will be, but they will certainly create opportunities for the innovative and entrepreneurial.
Creating ubiquity
These opportunities are highly dependent on the success of the networks in creating ubiquity. With wholesale bandwidth prices falling, this will come down to operators managing their operational costs to support falling end-user prices while expanding service coverage. Although voice will be king for some time to come, if operators can manage the balancing act, the mobile broadband opportunity might fulfil the analysts' lofty expectations in the coming years.
Harald Braun, chief executive officer of Aviat Networks
