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There are technologies that can and will make a difference to Africa. One of these is broadband wireless access. Although presently aimed at the small and medium sized companies in the local loop in cities and towns, it offers another way of giving the incumbent telcos a competitive run for their money. If costs fall, it could be a serious contender at a domestic level. Alternative telecoms networks - like the one announced for Ghana last week - might take an interest. Adlane Fellah of Maravedis provides an overview of the current state of usage.

Africa remains the least connected continent in the world both from the view of the total bandwidth feeding the entire continent and from an Internet penetration perspective. Restrictive regulatory policies, state monopolies, high costs, a shortage of local skills in information and communication technologies have been responsible for the slow development of African telecoms.

Things are changing however. For the past 3 years, a wave of deregulations, the prioritization of the telecoms sector through pan-African initiatives such as the NEPAD have boosted the creation of independent regulators and the entry into the market of competing services providers. Initially, those operators were dominated by either small and local ISPs (Internet Service Providers) and new mobile operators attracted by a huge demand for voice services not met by the state monopoly.

TThe current level of investment in telecom infrastructure does not meet the demand requirements. New operators with fresh capital are needed to serve what is becoming a very attractive telecom market opportunity for both equipment and service providers. Investments are needed to provide broadband connectivity to and within the continent.

There are five broadband access technologies available to telcos: xDSL, broadband wireless access (BWA), cable modem, optical fibre and satellite. All have strengths and weaknesses in providing telephony services to rural and urban areas and, it is likely, that a combination of the different technologies will prevail.

BWA is at the moment the right technology to provide broadband for small and medium enterprises in the local loop because it has 2 advantages over its substitutes: it can be deployed in weeks and it requires lower initial capital expenditures. However before focusing on it, let’s look at the alternatives:

Fiber: While fiber has been deployed in the densest areas of major US cities and other developed parts of the world, it still only reaches a fraction of the users demanding large-bandwidth, high-reliability connections. For example, less than 7% of business buildings in the US are served by fiber-optic cable. To dig and install 1 mile of fiber costs $1 million in the US. In Africa, fiber is essentially used in the backbone between cities and countries. In the local loop, wireless and copper are dominant.

XDSL: DSL technology improves the data transmission rate of a copper wire network by an impressive factor, and was perceived by many as the panacea for local-loop congestion but its efficiency is limited by distance to the central office and the quality of copper. ADSL roll-out is confined to higher density areas and the technical constraints of ADSL mean a large proportion of African businesses may not have ADSL. Further a DSLAM costs in average more than $US100K and the average costs for DSL deployment is above $210 per subscriber, meaning there is a long way for DSL to be viable in the residential market. For businesses, a profitable DSL deployments requires a ³critical² mass of customers wihitin 10,000 ft of the central office which may be the case in very specific urban areas or industrial parks.

Cable modems. Two-way cable modems enable data services to be delivered over network originally designed to provide a television service to residential users. Cable networks connect to the subscriber’s home using cable modems, which have transmission capacity of 10Mbps per subscriber. However, the bandwidth is shared by a number of subscribers and the service deteriorates as more residents go online. In addition, the installed base of cables passes through residential areas and not through business regions even in industrialized countries. In Africa, cable is simply almost non-existant.

Satellite: 2-way broadband satellite services are still under trial worldwide. VSATs connections although popular in Africa are a good substitute for the lack of in-country backbone capacity and can be used along with BWA to distribute/sell that same capacity to businesses in the local loop area around the VSAT.

BWA, also sometimes referred to as FWA (Fixed Wireless Access), is a point-to-multipoint technology whereby a base station located on the top of a building or tower transmits and receives data & voice via electromagnetic waves at high frequencies (above 2Ghz) called microwaves. It is also sometimes refered to as Wireless Local Loop even though traditional WLL is a narrow-band low data (64Kbps) system.

BWA represents an alternative to using the incumbent’s last mile network or to lay new cables ­ an approach that is problematic at the best of times, expensive and will delay time-to-market. There are several key limiters that are stopping BWA from exploding as a residential broadband access technology. For broadband to explode, the following things need to happen:

For operators BWA can be the right solution to serve a well defined set of business customers or private networks. It is especially cheap with unlicensed band equipment (2.4Ghz, 5.8Ghz, 900Mhz) with base stations as cheap as US$10,000 and customer premises equipment (CPEs) units below US$1000. For licensed bans (3.5Ghz, 10.5Ghz or 26Ghz), the equipment is more expensive and more suitable for carrier-class deployments. In this case a base station ranges in the US$100-200K with CPEs in the US$2,500 range. The carrier class equipment allows however more revenunes as it supports POTS telephony (Harris, Airspan) or VoIP (Alvarion) or PBX telephony.

New operators are starting to deploy BWA to leapfrog the incumbent’s network and provide newly needed broadband capacity to businesses for their fixed application. Countries with the best prospects for BWA, whether in licensed or unlicensed bands, are South Africa, Nigeria and the region of North Africa. Unfortunately, frequency plans in those regions are not standardized and bandwidth is often assigned on a case-by-case basis.

Currently, a few countries such as Botswana, Ghana and Nigeria are auctioning frequencies for specific BWA applications. The case of South Africa is one lagging behind as the local loop for universal services is yet to be deregulated. Other countries, for example Lesotho and Morocco, are examining the technology seriously with local companies requesting information for systems vendors. BWA wide-scale commercial deployments are happening in Botswana (Airspan), South Africa (Airspan) and Nigeria (see above). Nevertheless small-scale BWA private network deployments are occurring in many countries like Mauritania, Egypt and elsewhere. They are however less publicized since they either serve private networks purposes (mining, oil companies for example) or are small ISP deployments.

In Nigeria, eight firms out of 29 emerged as winners of 8 Fixed Wireless Access (FWA) licenses, at a total cost of N1.645 billion, in an auction conducted by the Nigerian Communications Commission (NCC) in 2002. This provided momentum and visibility to Africa as the next continent for BWA deployments.

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About the Author:
Adlane Fellah, MBA, has worked over 7 years in the telecom industry including 3 years as Marketing Manager for the BWA product line at Harris Corporation in charge of all point to multi-point market intelligence. He has extensive experience in both the tactical dimension of sales support as well as the strategic vision and analysis to feed product development. He also has an extensive knowledge of regulatory affairs as well as financial modeling through his tenure as senior consultant with the telecom-consulting firm Lemay-Yates Associates Inc. His company Maravedis Inc., is a world-leader in market research and analysis specializing in BWA PMP markets.