Analysis of Selected West African Broadband Markets

Broadband Services Market in West Africa on an Upswing despite Challenges

The broadband services market in West Africa is growing significantly despite the poor infrastructure and restrictive regulatory practices. The advent of wireless technologies as an alternative to the often poor and outdated fixed-line technologies has promoted rapid market growth. Additionally, West African governments have begun to realise the importance of information and communication technology (ICT) in economic development and have made some improvements in the regulatory space. "The introduction of wireless and fixed-wireless technologies in West Africa coupled with the low broadband penetration rates in the region have been key growth drivers," says the analyst of this research. "Historically, broadband development in the region has been driven by fixed-line incumbents but, through wireless technologies, internet service providers (ISPs) can circumvent the slow or stagnant development of fixed-line infrastructure." Moreover, with a regional penetration rate of less than five per cent, the addressable market in this region is huge, encouraging new participants to enter here.

Despite impressive developments in broadband, issues related to affordability and literacy, coupled with the limited financial capacity of operators to invest in infrastructure, continue to hamper market growth. The cost of doing business in some countries is prohibitively high and the market remains characterised by incumbent monopolies, impeding steady market expansion. Low literacy and rampant poverty in West African countries continue to limit the level and extent of Internet usage and consequently, broadband uptake. Incumbent operators have a monopoly on international gateways and the development of backbone infrastructure. "Current networks are outdated and in shambles except in Senegal and the Ivory Coast," notes the analyst. "This affects the quality and type of services that ISPs can provide."

Restrictions on wireless technology deployment are inadequate. Broadband providers have turned to these technologies to enable them to effectively compete with incumbents and exert better control over their networks. "Broadband prices have reduced, registering an average decrease of twenty per cent in the past two years, making these services more affordable," concludes the analyst. "Technology partnerships between companies have further alleviated issues related to the shortage of investment capital for network expansion."

Technologies

The following technologies are covered in this research:

• ADSL/DSL
• BWA
• ISDN
• WiMAX
• VSAT