3G, WiMAX, ADSL and the Future of African Broadband: Projections, Economics and Best Practices
AfricaNext, September 2008, Pages: 83
Building on an in-depth review of broadband dynamics in 30 African markets, this report provides broadband and 3G subscriber, revenue and Capex projections, as well as an analysis of the economics of mobile data in Africa, including demand, revenue, Opex and Capex.
African broadband business models have long been so dispiritingly brutal that it is hardly surprising that few private service providers have ever created any meaningful value out of them. The similarities with the African mobile voice market of the mid to late nineties are uncanny. Expensive services and devices and cream-skimming business models. The frustrating, persistent and maddeningly self-defeating regulatory roadblocks.
This, in our view, is about to change. We have reviewed Internet and broadband dynamics in 33 African markets and our conclusion is inescapable. We believe broadband services and applications are 12 to 24 months removed from a tipping point, a commercial inflexion point that would lead to a drastic increase in adoption and revenue generation. In essence, we argue that broadband, in its various forms–and other than perhaps, pay-TV- is the most significant opportunity for investment returns in the African TMT sector since the mobile voice boom.
KEY QUESTIONS EXAMINED IN THE REPORT
- How large is the African broadband access connectivity revenue opportunity over the next five years?
- How are/will the traditional obstacles to broadband adoption be surmounted?
- What will be the size of the African broadband user base over the next five years?
- What will be the HSPA, EVDO, WiMAX and ADSL share over the next five years?
- What are Africa’s top 15 markets for HSPA, EVDO, WiMAX and ADSL, in 2007 and 2012?
- How much will service providers spend on 3G and WiMAX capital radio infrastructure over the next five years?
- Is mobile data more profitable than mobile voice in the African context?
- Can the case for 3G be made for Africa’s medium-sized (Cameroon, Cote-d’Ivoire) and smaller markets (Mali, Mauritania)?
- Will African broadband usage go primarily through the handset or the PC?
- Should African mobile network operators subsidize PCs, modems? Can African broadband succeed without service provider subsidies?
- What is the future of the traditional African ISP?
- Will African fixed wireline broadband survive?
- How does 3G network Opex differ from 2G network Opex?
- Who are the key players to watch in the African broadband infrastructure business over the next five years?
- And more…
TARGET AUDIENCE
SERVICE PROVIDERS
- Benchmark the economics of African broadband by line item and compare to your own
- Assess market potential
- Benchmark 3G project financial feasibility depending on the type of African market
- Get a sense of strategies used by other service providers to push broadband
- Get tools to help you make the case –or lack thereof- for 3G in particular and broadband in general.
INVESTORS
- Assess the economics of 3G and broadband in the African environment
- Assess which business models for 3G and broadband are more likely to work in the African environment
- Identify the markets more likely to generate some meaningful broadband returns and those less likely to do so
- Assess when is the right time to invest in African broadband
- Get useful data points to build your own financial model
- Get market projections to help you assess the African broadband opportunity
- Benchmarks the economics of African broadband by line item and compare to your own.
INFRASTRUCTURE SUPPLIERS
- Get some extensive and independent projections of African telecoms sector growth beyond the voice opportunity
- Get some projections of anticipated service provider 3G and WiMAX radio and site construction spend over the next five years
- Get matrix-based sense of which technologies are being deployed where and why
- Get additional data and analysis to help you make the case for African broadband
LIST OF EXHIBITS
COMPANIES MENTIONED IN THIS REPORT
LIST OF ABBREVIATIONS
EXECUTIVE SUMMARY
THE BASELINE
THE OPPORTUNITY
THE BUSINESS MODEL ISSUES
THE ECONOMICS
REPORT STRUCTURE
SECTION I THE RISE OF AFRICAN BROADBAND
1.1 Broadband: the Most Significant Opportunity since the Mobile Voice Boom
1.2 Some Definitions and Preliminary Points
1.3 African Markets are not Created Equal: from Value to Volume Opportunities
1.4 Broadband Technology: The Resiliency of ADSL and the Rise of Mobile Broadband
1.4.1 External Drivers: Broadband Operating Environment
1.4.2 Technology Dynamics: Who Deploys What Where
1.4.3 Forecast Assumptions: Searching for Tipping Points
1.5 Market Projections: Broadband Forecasts
1.5.1 Overall Broadband Forecasts
1.5.2 The 3G Catalyst: More than Half of All African Broadband by 2012
1.5.3 ADSL: Alive and Well, though not Kicking
1.5.4 WiMAX: A Fast-Growing Alternative, but Limited Scale
1.5.5 Consolidation Dynamics: Whither the ISP?
1.6 Market Projections: 3G and WiMAX Capital Expenditure
SECTION II THE BUSINESS CASE FOR 3G IN AFRICA
2.1 Is there Demand for 3G Services in Africa?
2.2 The Internet Revenue Opportunity
2.3 Breaking Down African 3G Economics
2.3.1 The ARPU Case: Solid
2.3.2 The Capex Case: Improving
2.3.3 The Opex Case: Not Pretty
2.3.4 Network Opex: the main drag on the model
2.3.5 Subscriber Acquisition: To Subsidize Broadband or Not to Subsidize, That is the Question
2.3.6 The Future of African Broadband: Through the PC or Through the Handset?
2.4 Pricing & Positioning Models: Prepaid, Bundles, and Cost per MB
2.4.1 Subscriber Valuation: Mobile Voice vs Mobile Data
2.4.2 The Perverse Economics of Mobile Data: Over the Long Term, It May not Be So Good
SECTION III BUSINESS CASE SIMULATIONS
3.1 3G Business Case Simulations: Summary Assumptions
3.2 Tier 1 Market Simulation: A No-Brainer
3.3 3G Volume Markets: A Tougher Case To Make
3.4 Value Markets: Value in Small Figures
3.5 Small Markets: Tough to See a Case
3.6 WiMAX in a Volume Market: Mixed Case
SECTION IV COUNTRY FOCUS & INVESTOR WATCHLIST
4.1 Country Broadband Focus: Nigeria & Starcomms
4.2 Country Broadband Focus: South Africa – Broadband Slowly Losing Its Shackles
4.3 Country Broadband Focus: Kenya – When Wimax Takes On Hspa
4.4 Africanext Investor Watchlist: Other Key Markets To Watch – Table
4.5 Africanext Investor Watchlist: Key Broadband Infrastructure Players - Table
APPENDIX
- ACCESS KENYA
- AFRICAONLINE
- ALCATEL-LUCENT
- ASUSTEK
- CAMTEL
- CHINGUITEL
- EMTEL
- ERICSSON
- GATEWAY COMMUNICATIONS
- GLOBACOM
- GLOBAL CONNECT
- HUAWEI
- IBURST
- KANARTEL
- KASAPA
- KENYA DATA NETWORKS
- LAG GREEN/RWANDATEL
- MAIN-1
- MALITEL
- MAROC TELECOM
- MAURITIUS TELECOM
- MEDITEL
- MOVICEL ANGOLA
- MTC NAMIBIA
- MTML
- MTN NIGERIA
- MTN RWANDA
- MTN SUDAN
- MTN UGANDA
- MULTI-LINKS
- M-WEB
- NEOTEL SA
- NOKIA-SIEMENS
- ORANGE
- ORANGE MALI
- SAFARICOM
- SEACOM
- SKYPE
- SONATEL
- SONITEL
- STARCOMMS
- SUDANI
- SUDATEL
- TELKOM KENYA
- TELKOM SA
- TWITTER
- UCOM
- VERIZON BUSINESS
- VERIZON USA
- VISAFONE
- VODACOM CONGO
- VODACOM SA
- VODACOM TANZANIA
- VODAFONE
- WANA MOROCCO
- WANANCHI
- YOUTUBE
- ZAIN
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