Poor wireline coverage, desperately low incomes, and a host of other issues mean broadband penetration in AME will be an uphill battle

Paul Rainford, Assistant Editor, Europe

July 16, 2010

2 Min Read
Pyramid: The Struggle for Broadband in AME

The Africa and Middle East (AME) market represents a great opportunity for telecom operators and vendors alike, but huge obstacles will have to be surmounted before the region's potential is fully realized.

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

About the Author(s)

Paul Rainford

Assistant Editor, Europe, Light Reading

Paul is based on the Isle of Wight, a rocky outcrop off the English coast that is home only to a colony of technology journalists and several thousand puffins.

He has worked as a writer and copy editor since the age of William Caxton, covering the design industry, D-list celebs, tourism and much, much more.

During the noughties Paul took time out from his page proofs and marker pens to run a small hotel with his other half in the wilds of Exmoor. There he developed a range of skills including carrying cooked breakfasts, lying to unwanted guests and stopping leaks with old towels.

Now back, slightly befuddled, in the world of online journalism, Paul is thoroughly engaged with the modern world, regularly firing up his VHS video recorder and accidentally sending text messages to strangers using a chipped Nokia feature phone.

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