Tuesday, December 3, 2013

Local content quickens pace of broadband service delivery in East Africa

The increasing availability of affordable customer premise equipment (CPE) and smartphones in East Africa is driving the broadband services market in the region. Greater demand for access to social media platforms, especially on mobile devices, sustains broadband penetration. The laying of undersea cables, too, has helped enhance the reliability of networks, aiding market development.

New analysis from Frost & Sullivan, East African Broadband Market, finds that the market earned revenues of $109.5 million in 2012 and expects this to reach $159.2 million in 2017.

The low broadband network coverage in Ethiopia, Sudan and Rwanda – covering an average of just 20 percent of the geographic area – is indicative of a large under-serviced market and the high growth potential it offers.

“The deployment of worldwide interoperability for microwave access (WiMAX) and third generation wireless networks will contribute to the increase in broadband subscriptions in East Africa,” saidFrost & Sullivan Information and Communication Technologies Research Analyst Lehlohonolo Mokenela. “Network operators are also offering code division multiple access (CDMA) technology to widen market scope.”

Despite infrastructure expansion, insufficient broadband capacity continues to pose a major challenge for the development of the broadband market. The low disposable incomes of customers and a lack of local content, such as eLearning and eCommerce, also affect market income.

Service providers need to develop relevant local content to gain traction in this market. Moreover, providing more affordable handsets can help boost the adoption of broadband services and enhance customer loyalty. New market participants should also target areas without broadband services by ensuring affordable tariffs for both consumers and businesses.

“Internet service providers are already deploying infrastructure in rural and under-served areas, fuelling a gradual rise in the use of broadband services,” noted Mokenela. “In fact, regional deployments to service areas where other broadband companies do not operate may present service providers with a first mover advantage in the East African broadband market.”


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