Pyramid: The Struggle for Broadband in AME
That's one of the main findings of a new Africa & Middle East Telecom Insider report from Pyramid Research , "3G & WiMax to Drive Broadband Services Growth Through 2014."
The report's author, Hussam Barhoush, predicts that broadband penetration in the AME market will increase at a compound annual growth rate (CAGR) of 20.4 percent in the period between 2009 and 2014, a figure second only to Latin America on a global comparison.
As the report's title indicates, "traditional" (predominantly ADSL) fixed-line broadband will play second fiddle in this anticipated growth story, mainly due to poor-to-nonexistent wireline coverage in the more rural parts of the region, especially rural Africa. Instead, 3G and WiMax stand to make the biggest gains in the broadband battle.
WiMax, for example, accounted for just 1.9 percent of the region's fixed broadband connections in 2009, but Pyramid predicts this will grow to 8 percent by the end of 2014. Barhoush points out that WiMax networks are already, or close to being, deployed in most countries in the AME region. (See ITU Day 2: WiMax Brings It, Telecom Market Spotlight: Africa, Samsung Wins Saudi WiMax Deal, Moto Does WiMax in Jordan, and Alvarion Wins African Deal.)
Where fixed-line will continue to figure largely will be in the rich Gulf countries, in the shape of FTTH (fiber-to-the-home). Etisalat in the UAE, for example, plans to reach all UAE homes with fiber by the end of 2011. (See Etisalat Does FTTx With Zhone.)
Pyramid predicts that FTTx will account for 9 percent of the AME region's total fixed-line connections by the end of 2014.
But the barriers to ubiquitous broadband are obvious, notes the report. The cost of a PC in Mozambique, for example, equates to 66 percent of the country’s GDP per capita, putting it way out of reach of the vast majority of the population. And in some markets, around 40 percent of the population are illiterate, so worthwhile Internet browsing would not be possible even if the necessary technology were in place.
It's for these reasons that, even after the projected growth in the region in the coming years, broadband penetration levels will still only have reached 6.2 percent in AME by 2014.
— Paul Rainford, Freelance Editor, special to Light Reading