20 January 2010

Connectivity in rural Africa

I have been involved with hands on internet connectivity experiments in rural Africa since 2000, have studied the satellite market since 2002, and Macha Works has had VSAT(s) operational since 2004. Prices have been high, and have gone even up during this period, up to and including December 2009. This has been one of the biggest inhibitions for sustainability, although sheer survival of LinkNet, with rural users willing to pay for extremely expensive and relative infinitesimal grade services, throughout this period is reason for celebration.

The telecoms and Internet industry in Africa is changing rapidly. The big event of 2009 has been the arrival of the Seacom and TEAMS seacables on the east coast of Africa. Although cause for hope, these cables have not (yet) influenced life in Zambia, let alone in African rural areas. 2010 promises more on the seacable front: Glo One, Main One (on the west coast) and EASSy (on the east coast) are likely to become available. Such will bring competition and redundancy, and fuels hope for lower prices and hopefully reduces the need for satellite bandwidth, easing up current congestion. 03B Networks is still around, and says to offer cheap satellite prices somewhere from 2011, we'll see. Thus the gap between the speed in the fast lane (the West) and the slow lane (the South) will get wider in 2010 and we must relentlessly push forward as to avoid 'no-lane' internet in the rural Africa of the future.

So far prices for internet connectivity have not come down. ISPs and telcos seem to stick to their old business models, selling low volumes for high prices. Backbone providers seem more concerned with recouping their investments quickly then building the market (and building up marketshare) through ambitious and competitive pricing. It is rumored that ISPs will offer customers more bandwidth while keeping the prices to users the same, we have not yet even seen that happening. With the little availability of teresstrial and cross border networks the moment for the big change appears to be(come) delayed. However, change must come one day. There are enough new players in east, west and southern Africa to hope that a stream of new players will be coming to market with both more bandwidth and lower prices.

Growth is inevitable, and I look forward to reaching a tipping point at which opportunities exist for niche market players who can provide adapted services and better pricing. Room starts to exists for Virtual Network Operations in Internet, Mobile, and satellite communications. Such will help all, as it provides for costs sharing in order to reach the marginal - for us the rural - markets.

The events in Macha has shown that Internet is not to be considered a luxury. Mobile Internet is an important and good development, but is not going to be enough for Africa. Equipment investments are (very) high and there will be services that are impossible to do because of speed and reliability issues of mobile internet. Africa needs what the rest of the world will have, and growth of availability of internet is crucial for sustainable progress in rural Africa.