There is no reason why Africa cannot equal the developed world in as far as telecommunications developments are concerned, while in some areas, like mobile data penetration, the continent can actually excel.
This is the view of Bob Collymore, CEO of Safricom, who will be one of the delegates at the Next Generation Telecoms Africa Summit 2011, to be held in Nairobi, Kenya, from 25 to 27 January.
The summit sets its tone from the realisation that the African telecoms market has explosive potential, but technology and communications systems that allow operators to capitalise on this are often less apparent.
The event is held against the backdrop of the fact that the African telecoms industry is the fastest growing in the world, with a total investment of $18 billion since 2001. According to Ernst & Young, between 2002 and 2007, the industry grew by 49.3%, as opposed to Asia, which recorded a 27.4% growth.
Skipping ahead
In an interview with ITWeb, Collymore revealed that he sees Africa's growth momentum in the telecoms sector continuing, to even surpass the so-called developed nations.
“In many ways, Africa has leapfrogged the developed world. Most customers have skipped a whole generation of technology, going straight to mobile, without having tried a fixed-line phone; straight to handheld devices, without having tried PCs; and, of course, the biggest achievement has been the M-Pesa mobile money transfer,” he said.
He also singled out M-health as another good example where milestones have been reached on the continent.
“Necessity is the mother of invention and there is more need on this continent than in the developed world,” he explained.
According to Collymore, Africa's biggest challenge presently is the complex business environment that operators have to grapple with.
“In addition to the usual issues of a difficult business environment, lack of infrastructure is the single biggest challenge - poor transport and reliable and available power are big issues. Some countries have the added problem of capricious tax regimes,” he added.
For the continent to overcome these limitations, Collymore said governments need to create more friendly environments to encourage foreign investment and stimulate infrastructure development.
“Governments should take a longer term view of the beneficial effects of a successful telecommunication sector and adjust their taxation regimes accordingly and take a firmer stance on corruption,” he pointed out.
He added that some governments need to take a lighter touch on regulation, ease back on taxes and become less greedy about how many licences they issue. “Competition becomes less effective after only four operators are licensed.”
Investment needed
Commenting on the mobile penetration rates in Africa, Collymore said, although they are still low, there will be a longer “tail” to get to the final few percentage penetration. He added that the population could be too rural, thus return on investment for the private sector could be unattractive.
To improve broadband penetration rates and affordability, the continent must seriously invest in fibre-optic backhaul, Collymore advised.
“From fibre-optic backhaul investment, we will achieve more rural reach and affordable broadband. Several operators have invested in undersea cables but still have a problem once the cable has landed, as there is no reliable and efficient transport mechanism to take the traffic inland.
“In many cases, operators rely on expensive and capacity-constrained microwaves to carry data traffic. Typically, the in-country cabling is done by the incumbent (or formerly incumbent) PTT, who are usually slow and cumbersome former civil service departments and not capable of managing this essential asset efficiently,” he explained.
In Kenya, he added, there has been a progressive approach both in the private and public sector.
The Next Generation Telecoms Africa 2011 Summit, a closed-door event hosted by GDS International, plans to delve into these issues and the future of the African telecoms industry.
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