African international bandwidth set to grow by 81% to 2008 driven by mobile and broadband

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The transmission capacity required to carry Africa’s international voice and data traffic increased by 91% in the three years to 5.09 Gbps 2002, will increase by at least 137% to 12.09 Gbps in the three years to 2005, and a further 81% to 21.9 Gbps in the three years to 2008 according to a new report published by Balancing Act this week.

Underpinned by comprehensive underlying data on voice and internet traffic, the Balancing Act Voice and Data Bandwidth Forecasts (2005-2008) present five-year, country-by country forecasts for seven different streams of international voice and data/Internet traffic for 48 countries in sub-Saharan Africa.

Historically, the level of international traffic has been suppressed by high tariffs for international calls and for Internet bandwidth. Two key constraints have led to this suppression of traffic growth: monopolies over international gateways, and limited supply levels of fibre and satellite transmission infrastructure. As the exclusivity of incumbents over international traffic draws to an end in at least a third of the countries in sub-Saharan Africa, deregulation is granting new international gateway licences to SNOs, alternative international operators and mobile operators.

So now growth in international bandwidth is being driven principally by voice traffic as tariffs are lowered in order to compete effectively against the new entrants. The deployment of broadband access networks is also creating additional requirement for international bandwidth, and its uptake amongst cyber cafes and telecentres is triggering a second phase of growth in Internet usage in the region. The Balancing Act Voice and Data Bandwidth Forecasts (2005-2008) present a low, medium and high growth scenario based on average annual reduction in the retail tariffs of international calls of 10%, 25% and 50%. During August 2004 for example, Telkom Kenya lowered international tariffs by 45% to US$ 0.90 cents per minute.

Supply levels have increased too as operators invest to meet the demand. The entrance of Sat-3/WASC submarine cable in 2002 allowed Senegalese Sonatel to increase its international bandwidth to 310 Mbps, OPT Benin to 47 Mbps and Cote d’Ivoire Telecom to 45 Mbps. At least two more submarine cables are either under contract (Falcon and Globacom - see Telecom News below), and a third (EASSy) is proposed. Furthermore, 14 new satellites covering Africa have been launched since January 2002, and at least four more are under construction. For example, when Eutelsat launched its sixth satellite with coverage over Africa (W3A) in March 2004, this increased its equivalent bandwidth capacity over the region by 43% to 1.83 Gbps. The Balancing Act Voice and Data Bandwidth Forecasts (2005-2008) includes matrices covering the complex supply pattern of fibre, microwave and satellite transmission infrastructure.

It is the complex interaction between the pattern and level of supply, the shifting status of deregulation, and competitive pressure on tariffs which produces marked differences in the bandwidth requirement of the three sub-regions of West, East, and Southern Africa. ‘The volume and direction of international voice and data traffic is closely correlated with flows of people, and of money,’ says Paul Hamilton, one of the authors of the study. ‘It is not possible to predict the future supply of international capacity, in terms of infrastructure availability, but it is however possible to estimate the level of underlying demand, to identify trigger points at which new capacity is required.’

The report covers the following areas:

A set of headline summary figures: The headline summary figures are presented in a line graph showing historic data back to 1995 and forecasts forward to 2008. Each market sector, or stream of international traffic, is represented by a different colour with the key to the colour coding at the top of the graph. Two sets of figures are presented in tabular form below the graph: three sub-regional breakdowns (West, East and Southern Africa) and an overall breakdown per sub-region of the net forecasts by capacity (E1s, STM-1s and STM-4s).

Sub-regional forecasts: This worksheet presents the data broken down for each sub-regional (West, East and Southern Africa) into line graph form with the each market sector, or traffic stream, represented by a different colour in the same style of the previous spreadsheet. It also contains sub-regional maps showing composite satellite coverage and main terrestrial transmission infrastructure for each sub-region extracted from the Dynamic Africa Connectivity Model.

Prices: Retail pricing and growth of international voice traffic (actual and projected). This worksheet has data and a line graph that examines retail tariff data for outbound international voice traffic. Price is the key factor in determining the annual growth rate of international voice traffic. However, uniform, historic pricing data is not available for all countries either historically, and future price movements cannot be predicted. The interactive version of the forecasts therefore allow users to model the impact of future price movements on volumes of international traffic.

Broadband: This worksheet shows the additional amount of Internet bandwidth required for broadband Internet access by operators different countries. The introduction of broadband downstream connectivity has a direct effect on the requirement for upstream bandwidth. It shows assumed download speeds for ADSL and ISDN. These assumptions can be varied in the interactive version of the forecasts.

International IP Internet bandwidth forecasts This worksheet sheet shows the bandwidth used by dial-up subscribers, cyber-cafes and telecentres on a country-by-country basis. This sheet presents historic data on incoming international bandwidth from 1998 – 2002 Mike Jensen, see also the ‘Internet’ worksheet. Data for 2003 and in 2004 where indicated was gathered through research conducted for the Balancing Act Africa Internet Country Profiles and other studies. This model then goes on to forecast the international IP Internet bandwidth required in the five-year period 2003 – 2008 based on the forecast growth of dial-up subscribers, cyber cafes and telecentres.

Internet dial-up subscriber forecasts This spreadsheet shows the estimated number of dial-up subscribers broken down on a country-by-country basis. This sheet presents historic data on the number of dial-up Internet subscribers from 1998 – 2002 Mike Jensen. Data for 2003 and in 2004 where indicated was gathered through research conducted for the Balancing Act Africa Internet Country Profiles and other studies. This model then goes on to forecast the number of dial-up Internet subscribers in the five-year period 2003 – 2008.

Cyber-cafes and telecentres: This spreadsheet shows the number of cyber-cafes and telecentres on a country-by-country basis. Data was collected for 2003, estimates calculated for preceding years and projections provided for future years. It is assumed that few if any cyber cafes existed at the start of the period (1995), and so the growth required to reach this figure by 2003 is then calculated retrospectively.

Gross forecasts for incumbent operators: This spreadsheet contains total incumbent voice traffic estimates on a country-by-country basis. Data from 1995 – 2002 is derived from actual reported traffic, and is forecast for the period 2003 – 2008. The basis of this forecast is on historic annual growth rates seen in each individual market combined with the effect of pricing data. Traffic data for the total volume of international minutes (outbound plus inbound) has been converted into Kbps on the basis of compression ratios used by multiplex and DCME equipment.

International voice traffic from SNOs: This worksheet shows projections of international voice traffic for existing and planned Second National Operators (SNOs) and alternative operators on a country-by-country basis where they exist. As the monopoly of incumbent operators draws to end across the region, a growing number of countries are licensing alternative operators which are also to operate international gateways. The forecasts are cross-referenced with regulation, so that year in which either a fixed-line international carrier was licensed (such as an SNO, or equivalent) or in which the international monopoly is due to end and new operators are due to be licensed is used as the start year for SNO international traffic. Forecasting SNO start-dates is a perilous process as the rocky progress in South Africa and Zimbabwe shows. This data can therefore be re-aligned in the interactive version of the spreadsheets to accommodate changing timeframes.

Grey Market VoIP Traffic: This worksheet shows estimates of the amount of traffic estimated to be going “under-the-counter” via ISPs and cyber-cafes on a country-by-country basis. It also contains a pie-chart breakdown of VoIP traffic in each sub-region. These estimates have been drawn from three sources: the public pronouncements of incumbent operators; the private estimates of ISP and telco staff; and estimates from the major VoIP carriers in the market. It includes percentage estimates of grey market share, which can be altered in the interactive version on a country-by-country basis. Where no estimates were available from in-country respondents, a default estimate was provided.

International voice traffic from cellular: This worksheet shows the estimated international voice traffic derived from cellular operators on a country-by-country basis. The subscriber base of mobile is fast outstripping that of fixed lines, and increasing penetration of mobile is a key factor driving the volume of international voice traffic. Whilst there is a very strong but gradually diminishing statistical correlation between the total volume of international traffic and number of fixed lines, there is a rapidly growing correlation with the number of mobile subscribers.

An overview of terrestrial and satellite links: These two worksheets show in detail which countries have access to fibre and satellite services. Each comprises a matrix comparing countries with available infrastructure. The Fibre worksheet also shows map illustrating Panaftel and submarine fibre servicing Africa, and the Satellite worksheet shows a map illustrating composite satellite footprints.

Balancing Act Voice and Data Bandwidth Forecasts (2005-2008) is aimed at people working in the following categories of organisations: Telephone companies; Internet Service Providers; Bandwidth sellers (satellite and fibre); Data carriers; and Government and regulatory organisations. The data can be used to inform a number of tasks including: business planning, market share analysis, planning for an IPO and report writing.

There are two separately sold versions of the Balancing Act Voice and Data Bandwidth Forecasts (2005-2008):

Static version: In this version, the user gets all of the data but does not have access to the underlying assumptions. Nevertheless it provides an authoritative set of voice and data projects and the user can either accept the growth scenario chosen by our analysts or use one of the two alternative scenarios provided. The written summary of the data and the three workbooks are sold on a CD-ROM.

Interactive version: In this version, the users have the ability to change the main assumptions that drive the model. They can also add in their own traffic on a country basis to discover what level of market share they have and indeed might also be able to put in estimates of their competitors market share. The interactive version comes with an allocation of time from our key analysts. Interactive users are also invited to take part in a closed group that will review the data and methodology. Our analysts can also do more detailed country analysis.