African Broadband and Internet Market report 2006
This annual report offers a wealth of information on the African Broadband and Internet markets. Subjects include:
The broadbanding of Africa - policies, initiatives, projects
Internet statistics and market analyses
Barriers to Internet development
Internet and broadband infrastructure
International bandwidth and local connectivity
Community telecentres
The emergence of xDSL in Africa
Internet via satellite
Wireless Broadband
Local, national and regional ISPs
The role of the mobile networks and 3G
VoIP telephony liberalisation and grey markets
Executive Summary
Internet and broadband markets: still virtually untapped
While Internet uptake is growing strongly, market penetration is still very low due to the lack of reliable phone lines. By early 2006, overall Internet penetration in Africa was around 4% (up from 2.6% a year earlier), with the highest penetration recorded in Réunion and the Seychelles (over 20%), followed by Mauritius (15%) and Morocco (12%). This compares with over 50% penetration in developed countries. Nevertheless, several African countries have experienced triple-digit growth rates in Internet usage in recent years, including Cote d’Ivoire, Morocco, Senegal, Sudan and Tanzania, and this trend is expected to continue in 2006.
Various broadband initiatives have been launched and the number of countries offering commercial ADSL services reached 21 at the end of 2005 after tripling to 15 during 2004. By early 2006, around 95% of all Internet subscribers in Morocco were already using ADSL services – an unusually high percentage for Africa.
Egypt surpassed South Africa during 2004 in terms of the number of Internet users, thanks to a much more liberalised market. Around 5 million are estimated to have accessed the Internet in Egypt in 2005, up from 2.7 million at the end of 2003, while in South Africa growth had been stagnant for years just above the three million mark, with growth returning to the market in 2005 following price reductions for ADSL services. The next biggest African Internet markets are Morocco, and way behind Nigeria and Kenya.
Limited access
While the total number of Internet users is difficult to measure, ISP subscriber accounts across the continent in early 2006 are estimated at between 5.5 and 6 million (up significantly from around 2 million a year earlier), most of which are based in Northern Africa and South Africa. However, each computer with an Internet or e-mail connection in Africa on average supports 3 to 4 users. Given the very low PC penetration rates, most users access Internet services through Internet cybercafes or kiosks, community telecentres, community phone-shops, schools and other types of public Internet access. However, the ratio of users per Internet subscription has about halved during 2005, indicating improved affordability of personal Internet access.
Although substantial numbers of cybercafes have been established in most countries over the last few years, the Internet has so far had the greatest impact at the top end of business and in well-educated, wealthy families, primarily in the major urban areas.
Still, the high cost of accessing the Internet in Africa is a serious constraint on economic growth. In more than half the countries in Africa, one year of Internet access costs more than the average annual income. Only in Egypt, Libya and Mauritius is the annual cost less than 10% of the average income. Lower prices result from deregulation, competition and foreign investments in the ICT sector, and in some cases government subsidies.
The only African nations given the medium ICT ratings in the ITU’s Digital Access Index (DAI) report were South Africa, Namibia, Botswana, Libya, Tunisia, Egypt, Cape Verde, Algeria, Gabon and Morocco. All other African countries fall within the low access category.
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