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Survival Strategies for Fixed-line Telecommunications Operators in Sub-Saharan Africa
Frost & Sullivan, Dec 2009, Pages: 230
This Frost & Sullivan research service titled Survival Strategies for Fixed-line Telecommunications Operators in Sub-Saharan Africa provides analyses on industry challenges, market drivers and restraints, revenue and expenditure forecasts and current and future strategies. In this research, Frost & Sullivan's expert analysts thoroughly examine the following technologies: copper-wire network, fibre-optic network, dial-up, asymmetric digital subscriber line (ADSL), integrated serial digital network (ISDN), worldwide interoperability for microwave access (WiMAX), code division multiple access (CDMA) and multi-protocol label switching (MPLS).
Market Overview
Fibre Optic Cables to Boost the Fixed-line Telecommunications Market in Sub-Saharan Africa
Sub-Saharan Africa has the lowest fixed-line penetration rate in the African continent as well as globally. Incumbent operators mainly attribute this to low investments in copper-wire network infrastructure in the past. Another challenge is the vandalism that has caused deteriorating network quality over time. “The key growth drivers for wire-line telecommunications are the increasing demand for data and Internet services, cost-effective deployment of fixed-wireless technologies, and the introduction of fibre-optic cables,” says the analyst of this research. “Corporate customers are the major revenue contributor for fixed-line services, particularly data and Internet services and fixed-wireless technologies.”
Fixed-wireless technologies, such as WiMAX and CDMA, have overcome the requirements of capital-intensive copper-wire infrastructure investments to achieve less time-to-market of new services. Additionally, fibre-optic cables will reduce costs and increase bandwidth capacity of Internet services in the next three to five years. Corporate customers continue to prefer superior fixed-line services to mobile services. Traditional fixed-line operators are in the process of deregulating and migrating to mobile and/or fixed-wireless technologies. Therefore, the combination of fixed-line strength with innovative mobile offerings will help to retain existing customers as well as attract new ones. A series of fibre-optic cables that went live along the east and west coasts are expected to drive the second life of fixed-line telecommunications. In addition, data and Internet services will be the future revenue generators for fixed-line telecommunications.
Traditional Incumbent Operators to Diversify their Service Portfolios by Switching to Fixed-Wireless and Mobile Technologies
The dearth of reliable power supply is hampering network performance. Furthermore, high incremental costs of fixed-line infrastructure are inhibiting the network rollout and market monopoly is restraining competition. “The lack of physical infrastructure such as power plants and diesel generators in sub Saharan Africa limits the wire-line network expansion, which requires a sizable investment to ensure the quality of the network performance,” explains the analyst. “Conventional fixed-line telecommunications relies on expensive copper wire-lines, which is a restraint for fixed-line operators to improvise the quality of services due to the lack of private investments to fund the infrastructure rollouts.” The majority stakes of incumbent operators are still controlled by national governments of the sub-Saharan African countries. Therefore, the slow progress in deregulation of national incumbents restricts the growth of fixed-line telecommunications, because governments have a limited funding for the development of the capital-intensive fixed-line network infrastructure.
Traditional incumbent operators should gradually migrate to fixed-wireless and/or mobile technologies to diversify their service portfolios. “Combining the quality of fixed-line services with the mobility of wireless ones will give fixed-line operators a competitive edge to increase customer loyalty and consequently service uptake,” concludes the analyst. “It is imperative for fixed-line operators to enhance the quality of customer services, which will help retain existing customers and attract new ones.”
Technologies
The following technologies are covered in this research:
- Copper-wire network
- Fibre-optic network
- Dial-up
- Asymmetric digital subscriber line (ADSL)
- Integrated serial digital network (ISDN)
- Worldwide interoperability for microwave access (WiMAX)
- Code division multiple access (CDMA)
- Multi-protocol label switching (MPLS)
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