Triple play and broadband will power the next stage of growth for Africa’s Internet
With dial-up, the experience of Africa’s Internet has been like trying to eat a meal by sucking it through a straw. It’s been slow and expensive for the individual user so it’s hardly surprising that it has thus far only attracted a relatively small band of users compared to mobile phones. By the middle of next year, much cheaper international fibre prices will come to East Africa and their impact will spread out across the continent starting in South Africa. Cheaper International prices will mean downward pressure on national backbone prices. All this lays the foundation for much faster retail broadband services and the possibility of delivering genuine Triple Play bundles in Africa.
Except in the larger markets, the potential for the Internet in Africa is in the hundred of thousands or the tens of thousands depending on the size of a country but this is a great deal larger than the current size of Internet subscribers which tend in the main to be in the thousands. One of the key shifts will be that an increasing number of ISPs and telcos will devise broadband and Triple Play offers that are targeted at Africa’s middle classes in their homes.
This week sees the publication of the second edition of African Broadband, Triple Play and Converged Markets (the first edition was in 2005), a comprehensive 155+ page report that contains both consumer and industry data covering the key issues that will emerge as broadband growth takes off. The consumer data covers key questions from national and urban samples in 24 countries from both the high and low-growth markets.
African Broadband, Triple Play and Convergence Markets covers:
• Triple play and converged players: No one operator has all the skills required to create a successful African Triple Play offer but the report examines the likely players including: the vertically integrated telcos, the cable operators, the larger incumbent telcos, the Pay TV operators and alternative insurgent challengers. It also identifies those who have chosen to sit out this particular dance and the strategic alliances the players will have to make to succeed. For six key markets it provides numbers of cable, IP-TV and satellite subscribers and projects the likely potential for Triple Play operators by looking at levels of home PC ownership.
• Price survey and pricing strategy: Based on a survey of broadband offers in 38 African countries, the report provides comparisons between different capacities and download caps and between fixed and mobile Internet prices. In the relatively small number of countries where broadband pricing has allowed consumer use to develop, the report looks at the relationship between price and subscriber numbers.
Although some operators are offering laughably slow speeds and calling them broadband, the amount of capacity users are getting is increasing and the amount they are paying for it will continue to fall. Many African operators do not really believe that the Internet is a consumer service and price broadband services as a sort of leased line substitute for the low-end of the corporate market. But as the consumer survey data in the report shows, this is a very short-sighted commercial strategy in all but a handful of Africa’s poorest countries. By the end of 2007, there were nearly 3 million African broadband subscribers and this number is set to treble over the next 3 years.
• Speed of roll-out: When the first edition of this report was published in 2005, slightly less than half of the countries in Africa had some form of broadband offer. Now nearly all countries have some form of broadband services and those services are increasingly widely distributed on a geographic basis. The report updates operator implementation by delivery type and looks at which types of operators are using the different types of delivery technology available, providing one of the most complete and detailed overviews of broadband implementation.
• The question of content – the Internet as media and who’s using what content?: Broadband use in Africa, as elsewhere, thrives on the services and applications that are available to users. Increasingly the Internet is becoming a media in its own right: a tiny 1% of advertising revenues in South Africa goes to the Internet but this will increase rapidly over the next three years. African newspapers will be particularly vulnerable as those with smaller circulations are expensive to produce and have disproportionately high advertising rates.
Drawing on a wide range of country consumer surveys, the report looks at who is using the Internet on a daily basis, what they use it for and how its use compares to other competitor media like newspapers, radio, TV and SMS. It divides Internet markets into three categories – top, mid and low-tier – and provides a set of comparable data for each. The more detailed information from the top-tier markets offers intriguing clues as to what will happen in the mid tier markets as consumer broadband use becomes more widely distributed.
• Converged market bundles like mobile TV and other offers: The continent is the site of one of the most extensive set of roll-out plans for mobile TV. The report has a section that covers how it is being done, the initial numbers using the services and the technologies involved. It looks at how Triple Play offers might become Quad Play offers with mobile voice and mobile TV added in. France Telecom-owned Telkom Kenya has already announced that it will include these kinds of services when it launches its mobile service in September.
Balancing Act’s Broadband, Triple Play and Converged Markets, is over 155 pages long and has 42 charts, 38 tables of statistical data and 1 graphic map. In addition there are is a spreadsheet workbook with 10 worksheets providing actuals and forecasts of broadband numbers and a spreadsheet of broadband pricing and offers from 38 countries.
The report is priced as follows: Full price (Africa) – GBP250/US$500; Full price (Rest of the World) – GBP4000/US$800; Reduced price for universities and NGOs – GBP125/US$250.
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