Africa Telecoms Online

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Until recently, Africa had some of the highest international bandwidth costs anywhere in the world. Although it varied from country to country, the international element of the cost to the consumer was a significant proportion of the overall cost he or she paid. The same was true for institutional users like governments, or for those in the private sector. This cost affected both voice (fixed and mobile) and data users alike. With International trade and the exchange of ideas essential to Africa’s success, this high cost of international bandwidth posed a significant barrier to African countries’ ability to participate in world trade and to increase its capacity and skills. Without cheaper international bandwidth African countries ran the danger of being left behind in the global race. In the past year, many African countries have gained access to fibre-optic international submarine cables for the first time: some directly and some, like landlocked countries, via terrestrial fibreoptic links with neighbouring countries. Other countries are gaining access to a second or even third international cable. The arrival of fibre-optic technology has not only improved Internet connectivity, but prices have come down and service levels have increased – especially in the East African region, which in the past year has seen two submarine cables arrive on its shores. The arrival is a culmination of the long-awaited undersea fibre-optic connection to the region – which was the only part of the world missing such a link, thus leaving satellite technology as the only means of connecting to the rest of the globe. These multimillion-dollar undersea fibre-optic cables are expected to create jobs; as well as provide reliable Internet and telecommunication services to industry stakeholders by minimizing the difficulties of switching traffic between African countries and eliminating the inconveniences and added cost of first routing traffic to Europe – as was the case before. With affordable and efficient ICT infrastructure, African countries will also be able to venture into the field of business process outsourcing, a rapidly growing global industry. Improved connectivity has made broadband Internet access affordable to a much wider range of the population. The Internet has brought access to education, unbiased information, and improved competitiveness in the global marketplace: factors that are expected to empower and revolutionize African economies and societies. However, for the full benefit of the new international fibre-optic connectivity to unfold, all the other elements along the supply chain to the end user need to be developed.

These include:

• National fibre backbone networks to take the new cheap bandwidth to population centres around the country. For example, in Kenya the National Optic Fibre Broadband Infrastructure (NOFBI) connects major towns and border points, while connections to district headquarters will provide links to other small arteries that connect the end users to the main cables;

• Policy, legal and regulatory regimes for fair and open access to the international fibre-optic cables and the national backbone; and

• Wireless mobile broadband infrastructure (and competition) on the access level.

The connection to the submarine cables does not necessarily spell the demise of satellite connectivity. With fibre-optic technology alone, only the users in urban areas will benefit from this Internet revolution. The last mile connectivity is still a challenge and this is where satellite broadband services will be invaluable in empowering thousands of Africans with high-speed Internet.

Published in April 2010

WHAT A MOMENTOUS YEAR IT HAS BEEN FOR BOTH 3i Publishing, and the nation of South Africa. We launched Africa Telecoms in November 2009, and on behalf of all of us, may I please extend our warmest thanks and appreciation to all our clients, supporters, contributors and readers for making Africa Telecoms the leading monthly publication covering the African ICT market. It is indeed an honour for us all to be involved in an industry that is affecting so many and in such a profound and life altering way. Whether it is connecting the millions in Africa’s urban centre’s or the ability to provide Universal Access for the majority in the rural areas, ICTs have created a paradigm shift that has only been of benefit to the continent. In addition to the publication, 3i Publishing was also privileged to host its first conference, the Africa Networx Summit 2010, to coincide with the FIFA 2010 World Cup in South Africa. An overview of the event is covered in this issue and it is our hope that all delegates found the event of value and will join us as we hold similar conferences across the continent in the coming year. Once again, if I could take the opportunity to thank our sponsors and delegates for making the event possible. We plan to hold our next summit in Addis Ababa, Ethiopia in March 2011. Some highlights of summit included the interconnection debate, which has become a hugely emotive topic in the industry and it is our intention to dedicate some considerable time and column inches at examining the issue in considerably more detail. In our very first issue, we did publish the Namibian Interconnection Benchmarking Study, published by NCC. the During the week of the conference, ICASA, held their hearings in Midrand on the interconnect regulations, and again the gravity of this important issue was evident with submissions to ICASA from all the major operators. For ICASA, voice call termination is defined as the service one network offers to another to carry traffic to end-users. The interconnection rate, is therefore the charge for this service. In ICASA’s draft call termination regulations of 16th. April 2010, the regulator proposed a glide path for termination costs of ZAR 0.65 for mobile and ZAR 0.15 for fixed in July 2010. Then in July 2011, this would decrease to ZAR 0.50 and ZAR 0.12 respectively and finally in July 2012, this would settle at ZAR 0.40 and ZAR 0.10. This would apply to all individual or class licensees who are found to have Significant Market Power (SMP). In the case of South Africa, this refers to Vodacom, MTN, Cell C and Telkom. The most widely applied cost standard is the forward-looking long-run incremental cost (LRIC) of termination of an efficient operator. Termination rates at cost of termination will remove economic distortions witnessed in Europe and Africa today and prepare the markets for a smooth transition to IP based Next Generation Networks. This cost standard has also recently been applied by the Communications Commission of Kenya (CCK) and the LRIC methodology is quickly gaining traction across the continent. Whether the application of this standard yields substantive results, with the benefits of these termination cost reductions being passed on to consumers, is yet to be seen For the World Cup, there were many, and complex factors that contributed to a successful tournament such as the FIFA 2010 World Cup. From a technological perspective, the road to ensuring a glitch free tournament was as much a part of the success of the event, as ensuring world-class stadiums and roads. The process started back when South Africa was awarded the tournament. There began a significant investment by all the major operators in particular, Vodacom, MTN, Neotel and Telkom. MTN SA says it has spent nearly R450m on network investments directly related to the 2010 soccer World Cup, including the rollout of dedicated infrastructure at all the stadiums used during the tournament. The company built additional infrastructure at stadiums to ensure fans could always make phone calls, connect to the Internet and to ensure the connectivity of residents in neighborhoods next to stadiums were not affected. At Soccer City in Soweto, for instance, the operator set up 22 base stations, containing a total of 38 cells and 348 antennae, serving specific zones within the stadium. Similar systems have been installed at OR Tambo International airport, at the new King Shaka airport in Durban and at Cape Town International airport. From a technology aspect, the legacy of the World Cup will be felt for generations to come and for that alone, we must rejoice.

Published in July 2010

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