For Africans to move from being just consumers of content, to creators of content and of their own applications, the industry must drive affordable, uncapped broadband.
This was the sentiment expressed by Nic Rudnick, group deputy executive chairman of Liquid Intelligent Technologies, speaking this week at Africa Tech Festival 2022, in Cape Town.
Delivering his speech under the topic of “Building blocks for Africa’s fourth industrial revolution”, Rudnick stated thatalmost everybody on the African continent has a mobile device.
However, the important question is whether that mobile phone will enable, or inhibit, the adoption of the fourth industrial revolution (4IR) on the African continent, he pointed out.
Rudnick commented that while for other parts of the world, data is being consumed from the fixed-line, accounting for more than 70% of total data consumption, less than 3% access the internet on fixed-line on the African continent.
“The fixed-line is in most instances faster and cheaper because it’s not pay-as-you-go − it’s uncapped. People are able to experiment and use data without being concerned about usage costs, and hence, are in a position of being creators of content and capability rather than just being consumers.”
For instance, fixed-line penetration across the continent is highest in Senegal, with little penetration at 10%. The majority of the other African countries are at 2% to 4%, at most, he said.
“That leads to the question of what should we as an industry be doing to enable the continent to have fast, low-cost and uncapped bandwidth to access and participate in the 4IR.”
Affordability crunch
According to Rudnick, poor mobile data affordability leads to data rationing, whereby people don’t use the networks in the way the industry anticipates.
“When we look at affordability, it’s not enough to just look at the cost of broadband and say ‘data prices have come down’. What we need to look at is what is the affordability to people – what is the percentage of their income per capita and what is being or is able to be spent on broadband.
“To expect people to participate in 4IR when they have to spend 20% or more of their income to access data and services is a problem that we as an industry need to overcome.”
In OECD countries, for example, fixed uncapped broadband costs on average about 1.5% of per capita income, which is a reasonable benchmark to say what people should be spending in order to have fast, uncapped affordable bandwidth and participate in 4IR, Rudnick explained.
In half of African countries, 1.5% of income gets a consumer less than 100MB of data, he stated. By comparison, in the UK, spending 1.5% of income would get the consumer 500GB-plus.
“Using a mobile phone, which is the only means of access in most of Africa, you are getting 100MB. Only in five African countries does it [1.5%] get you more than 1GB rather than 500GB.
“If we consider the price point at which Africans are spending 1.5% of their income, we get to a price point of about $5 or less. This is the challenge which we as an industry must try to solve: how do you get the price point of fixed, fast and uncapped broadband to less than $5?”
Going back to his initial point about the role of the mobile phone in 4IR, he stated: “Obviously the phone is an enabler; it’s an ability to access the fourth industrial revolution, access mobile money and other services. However, it is a consumer device and it is something which will result in Africa remaining consumers in the fourth industrial revolution rather creators.
“With the ability to create content and move from a mobile device, to a different kind of device, creation then becomes possible.
Africa’s next unicorn
Removing limitations that inhibit fast and affordable broadband also opens opportunities for the continent to up its game when it comes to founding unicorns, he noted.
As of 2021, Africa counted four unicorn start-ups valued at over $1 billion each, shows data from Statista. These are in Nigeria (three) and Egypt (one).
Rudnick explained: “If you look at Africa as a whole and consider how many unicorns the continent has created over the last few years – the genuine tech unicorns where someone has created software, created the capability, or the company is worth a billion dollars or more – it’s hard to think of even one.
“Yet you see other countries across the world producing dozens of unicorns on an annual basis. If we want to move from consumer to creator to creating unicorns, I think the key obstacle we need to overcome is to be able to provide uncapped and affordable data.
“A component of that is not only reducing pricing to below $5, but also connecting schools, connecting community centres and using those as interim measures to provide access.”
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