WiMAX Opportunities in Africa

The growth and development of WiMAX in Africa has taken place mainly during 2006-2007. At the beginning of 2006, the WiMAX subscribers figure for Africa was just a few thousand. But according to the WiMAX Operator Tracking Service, WiMAXCounts, at the end of 2007 that continent accounts for more than 20,000 WiMAX subscribers. This number is low because it is dominated by business customers who serve access to 10’s or 100’s of internal users, in contrast to residential access. Also, there are many new deployments that took place during the second half of 2007. During this year, the subscriber numbers have grown at an average rate of 28% per quarter, and the growth from Q2 to Q3 2007 alone was 36%.

There are around 15 commercial deployments of BWA/WiMAX in the region, half of them started this year. Some 10 operators are trailing or evaluating the implementation of a WiMAX network. African operators are poised to spread the benefits of WiMAX. The lack of wired telecom infrastructure in the region opens up big opportunities for WiMAX to provide broadband Internet to the many rural and underserved areas that can’t be addressed with wired technologies. There is also low penetration of personal broadband. Out of the 922 million inhabitants of Africa at the end of 2006, only 43.6 million were Internet users, and only 1 million had a broadband connection.

Access to a broadband connection in Africa is typically limited to the wealthy, who can afford the exorbitant prices. However, WiMAX is seen as a new, cost-effective solution. WiMAX will bring lower costs for both operators and end users, allowing new entrants to construct and build attractive business models to address both the residential and business segments.

Another situation that benefits operators is the privatization of incumbents, which has opened up an opportunity for telecom competition. According to the ITU, by mid-2007 there were 26 state-owned incumbents in Africa. However, this year, for the first time, the number of private operators has surpassed the number of state-owned incumbents. Maravedis expects that by 2010, the majority of African countries will be open to competition.

In addition, there are several initiatives that support the provision of broadband connectivity in Africa. As an example, in September 2007, the United Nations announced “Connect Africa,” a major initiative to provide high-speed, low-cost broadband and wireless connectivity throughout the continent.

In Kenya, the government is developing a plan to provide rural inhabitants with electronic access to government services. With initiatives like these, it is expected that broadband wireless will be extended to other remote areas in the future.

Many operators have been allocated WiMAX spectrum in the region, and it is expected that the licensing activity will continue. In January 2007, a Maravedis WiMAX vs. 3G Spectrum Comparison Analysis showed that by the end of 2006 there were 62 WiMAX licenses awarded in Africa, and new allocations have taken place this year as well. Approximately 92% of the deployments in the region are using the 3.4-3.6 GHz spectrum, with the remaining in lower bands such as 2.5 GHz. In addition, almost 72% of the deployments are using WiMAX Forum Certified (802.16-2004) equipment, and only a few operators are deploying 802.16e-2005 or proprietary technology.

The poor Internet service in the region is the result of infrastructure shortcomings, low bandwidth, and outdated technology. WiMAX has the potential to transform this landscape. WiMAX in Africa is already a less expensive solution than DSL, and one can assume that as the service gains maturity, the monthly cost of WiMAX service will be even lower. Affordability, availability, mobility, and ease of use will favor the adoption of WiMAX. This, in turn, will increase broadband penetration in the region, and possibly more Internet Service Providers will emerge from current large mobile operators.