Africa is the world’s second largest continent after Asia, with a total surface area of 30 million square kilometres. The continent consists of 55 countries and territories housing some 840 million people. The social and economic conditions range from poverty to affluence, South Africa being among the most affluent and handling much of the trade for the whole of the southern region.
Many African governments have realised the importance of telecommunications and the fact that private investment is the way forward. Alternative technologies such as satellite, wireless and cellular are now making the task of connecting Africa far easier than it has been with the traditional cable-based services, and growth rates have been phenomenal.
Despite some remarkable changes across the continent over the past ten years, overall teledensities are still low, with the rollout of fixed lines by incumbent operators barely inching forward in most countries, while the uptake of mobile telephony moves rapidly past it. The same can be said of data communications - wireless data services are becoming operational and will similarly usurp fixed-line infrastructure. These trends threaten to undermine Africa’s Public Telecom Operators (PTOs), especially as they are privatised and their valuation comes under the spotlight. As a result, some have opted for protective strategies. Threatened by the growth of mobile, they have been awarded mobile licences, and with recent growth in the Internet sector, many have established Internet divisions. Regulatory issues, such as interconnection and carrier pre-selection, have also impeded the entrance of fixed-line competitors.
Many countries are undergoing sectoral reform and foreign investment is now being actively encouraged across the continent as privatisation and liberalisation are progressively being introduced. More than one-third of all state telcos have already privatised and several more are set to undergo privatisation in the near future. Some of the biggest markets on the continent, including Nigeria and Kenya, have privatisation of their national telcos on the agenda for 2006.
Voice over Internet Protocol (VoIP) is finally starting to take off in Africa following steady improvements in Internet bandwidth and the growing number of VoIP service providers entering the market. International IP telephony wholesalers have seen a huge surge in voice traffic to and from Africa in the past five years. Through their interconnection capabilities, they enable African operators to quickly gain access to an international network, new revenue and very competitive outbound rates. Several countries have liberalised VoIP, opening up opportunities for many smaller service providers, including South Africa, Kenya, Egypt and Tanzania, with many others set to follow in their footsteps.
Several large cable and satellite projects, notably WASC/SAT3/SAFE, Comtel and Rascom have been developed with the goal of meeting the rising needs of the African market for international bandwidth and reducing the continent’s dependence on European traffic hubs. New terrestrial links between some African countries are also being built or existing ones modernised.
This annual report offers a wealth of information on the Infrastructure, Fixed Voice and Data markets, covering: