[Column] Murray Steyn: Meeting Africa’s insatiable connectivity demands with wholesale solutions
The digital age has been gathering pace in Africa as the continent becomes more connected by the day and the hunger for connectivity grows.
This is changing the way Africans live, work and play, but the digital divide is still a concern. More work and investment is needed to provide the required infrastructure to facilitate affordable solutions, but progress is accelerating and wholesalers are helping to drive it.
Greater availability, increasing demand
The provisioning of new undersea cables has had a significant impact on international connectivity. But Internet access in Africa is still expensive, especially in landlocked countries. This is because the lack of infrastructure in the interior has been an impediment.
According to figures from the Alliance for Affordable Internet, the price of 1GB mobile prepaid data in Africa represents about 8.76% of the average monthly income compared with a global average of 5.5%.
However, Africa has shown marked progress when compared with figures from 2015. Then, prices were more than 12.5% of average monthly income compared with a global average of close to 8%.
The impact of this improved affordability is tangible. In a single year, Internet penetration in Africa increased by more than 20%, according to Wearesocial. It more than doubled in Benin, Mozambique, Niger and Sierra Leone. The figure for South Africa now stands at 54%, just above the global average of 53%.
This increased accessibility is fuelling a growing demand as Africans begin to discover a new digital world which they are primarily tapping into with their mobile phones.
Social media has given the world a new way to interact and stay informed, and Africa is becoming a larger player in the media-rich global zeitgeist as its younger population tunes in.
Wearesocial reports that the number of active social media users has increased by 8% since 2017 in South Africa. This translates to 32% of the population with WhatsApp overtaking Facebook as the most popular platform. The figure reaches 38% among North African countries but lags at just 6% in Africa’s middle regions.
People are using this affordable connectivity for more than just chatting. The Internet is also changing the way people are entertaining themselves.
There’s a rise of OTT video-on-demand services from the likes of Netflix and YouTube which is poaching audiences from traditional television. This market is expected to drive an increased demand for local content as it matures, a trend that will grow audiences even further.
The widespread benefits of connectivity
Fintech is another area of innovation that has been taking off in Africa and reliable telecommunication services are essential to access it. The mobile money transfer, financing and micro-financing service, M-Pesa, has taken Kenya by storm.
Since it caters to unbanked users, it has experienced great success at grassroots level. According to figures from the RFi Group, the service is accessible to 93% of the population and processes about half of the country’s GDP. There’s little doubt that this success can and will be replicated elsewhere on the continent.
The use cases for affordable connectivity are proliferating and is resulting in immediate benefits for businesses and consumers. For example, consider what Uber, mapping and hospitality services like Airbnb have done for the tourism industry.
Opportunities for wholesalers
Wholesale solutions are needed to democratise the improved connectivity which has, so far, been largely concentrated in Africa’s urban centres.
There’s a need for ISPs that offer a sophisticated customer service, ensure operational efficiency and package solutions in a way that circumvents infrastructural challenges by leveraging strategic partnerships while remaining competitively priced.