Connecting Africa
July 22, 2009
The cost of accessing Internet services in Africa is likely to fall in the near future with work on laying a fiber-optic cable connecting eastern and southern Africa to Europe and Asia set to be completed by Seacom on Thursday.
The price of access to high-speed telecommunications in Africa is among the highest in the world, a fact which has kept many Africans off the Internet, according to Christoph Stork of Research ICT Africa, which consults on information and communication technology in 19 countries on the continent.
"While people in America were upset about bandwidth limits of 250 gigabytes a month, for mobile broadband access in South Africa we would have to pay about 100 euros ($142) per gigabyte," he said.
Connectivity at a cost
Ham Mjulira, a former Ugandan cabinet member responsible for information and communication, said he expected the cost of voice and data communication to drop by as much as 80 percent as a result of the new cable.
"We're expecting a massive drop as soon as Seacom is fully operational," Stork said, adding that costs could fall by up tot 90 percent of current levels. "It will still be much higher than what European or Indian or American customers are used to, but it's still a big drop."
Once the price of connectivity falls, many more Africans will turn to the Internet for news, information and entertainment, Stork said. Current Internet penetration in Africa is 5.6 percent, compared to 26.6 percent for the rest of the world, according to the Internet World Stats tracking site.
"As soon as the cost comes down, other demands will arise that we can't anticipate yet," he said. "As soon as it's affordable, people in Africa will engage with news and information online and take part in other activities that they can't do now because of the cost."
But price decreases will depend on how much of the network's capacity is used, according to a 2008 study by the Association for Progressive Communications in South Africa. It found that the full potential of an existing cable connecting western and South Africa to Europe was not used, resulting in smaller price decreases than anticipated.
Broadband access helps solve other problems
Investing in the infrastructure necessary for high-speed Internet access and making efficient use of broadband networks would benefit many African countries, according to a World Bank report released at the end of June.
The study showed that a 10 percent increase in high-speed Internet connections led to an economic growth increase of 1.3 percent. Broadband Internet connections provide the basis for local information technology services, which create jobs, increase exports and promote social inclusion, the World Bank said.
Should prices fall substantially, parts of Africa could become more attractive for call centers and other industries that rely heavily on telecommunications, Stork said.
"South Africa already has its fair share of outsourcing and Ghana and Kenya and Uganda are benefitting from it," Stork said. "The advantage is that much of Africa is in a time zone close to the UK's, wages are very low and they speak native English."
But with less than 15 percent of the potential market for IT services being met, there is plenty of room for newcomers in the high-tech services industry, according to the report. It estimated the total market to be nearly $65 billion in 2007 - a figure that estimates show could jump to $239 billion by 2012.
Quick connections coming
Seacom's high-capacity connection for eastern Africa could help countries there tap into that market and change the way business is done, according to Seacom President Brian Herlihy.
"Eastern Africa has been the only part of the world without submarine cables connectivity," Herlihy told reporters ahead of the project's completion. "The impact on the cost of doing business will be huge."
The Seacom connection, which is based in Mauritius and 77 percent African-owned, will have a capacity of 1.2 terabytes per second. That is roughly enough to transmit 300,000 digital photos a second.
A pair of other high-capacity undersea connections to eastern Africa is also in the construction stages. A project known as TEAMS, which is partially funded by the Kenyan government, is also scheduled to start by the end of 2009 and will connect Mombasa to the United Arab Emirates. The third project, the East African Submarine Cable System, is financed by both public and private bodies and runs from Sudan to South Africa.
The arrival of three broadband providers should benefit Africans, Stork said.
"There is some duplication, but it has led to reductions in cost everywhere else in the world, so we actually want to have the competition," he said.
Author: Sean Sinico
Editor: Kate Bowen