Broadband connectivity is a fundamental tool for driving social, economic and personal development. An improved broadband connectivity is critical to the realisation of a global digital economy and to fostering economic growth by accelerating the creation of jobs through digital innovation. In addition, increased digitalisation by governments supports the expansion of access to basic needs and services by citizens, thereby helping countries to meet the UN’s Sustainable Development Goals (SDGs) in the areas of financial inclusion, identification and job creation, among others.
Improved broadband connectivity plays a key role in accelerating economic growth and increasing the GDP, particularly in developing markets such as sub-Saharan Africa. The increased opportunities in ICT accelerate job creation by unlocking new digital opportunities in key sectors of the economy, including e-health, e-agriculture, e-education and transport. According to the ITU, a 1% increase in mobile penetration in Africa is estimated to increase GDP by 0.25% (ITU, 2019). Africa’s mobile broadband penetration increased from just under 30% in 2018 to just over 40% in 2021, and this 10 percentage-point increase corresponds to an increase of 2.5 percentage points in GDP. Further studies by IFC show that expanding internet penetration in Africa from the 33% (2020) to 75% has the potential to create 44 million new decent jobs. The provision of universal, affordable high-speed broadband connectivity in Africa is therefore critical to the realisation of a digital ecosystem that supports innovation in new sectors of the digital economy.
Broadband penetration in Africa remains the lowest in the world. The sub-Saharan Africa sub-region scores very poorly in terms of broadband penetration compared to Northern Africa. While demand for broadband services is on the rise across Africa, low service availability and poor affordability continue to hinder the rapid adoption of broadband services. Broadband infrastructure deployment still faces a myriad of challenges, including low electrification rates, poor road networks and insecurity.
This white paper analyses the state of broadband development in Africa in comparison with the global markets and proposes a Broadband Africa Vision 2030, with the overall goal of connecting every African with broadband to build a stable, united and prosperous digital Africa.
The broadband market in Africa is one of the fastest growing markets in the world with fixed broadband annual growth rates for 2021 reaching 14.6% compared to the global average of 8.2% –according to Omdia research (see Figure 1). Total fixed broadband subscriptions increased from 28 million in 2020 to 32.1 million in 2021, while penetration increased from 10.2% to 11.4% over the same period. Africa is projected to record the highest fixed broadband subscriptions growth rate between 2024 and 2027. The strong growth is attributed to the rising demand for high-speed broadband connectivity and increased affordability of services occasioned by a decline in tariffs and the expansion of fixed broadband infrastructure, such as optical fibre and fixed wireless networks. The COVID-19 pandemic was a key driver for increased broadband adoption due to the shift in consumer behaviour towards remote working and home schooling. Overall, there is increased demand for high bandwidth applications, including video calling, UHD/4K+ video streaming and realtime gaming.
Africa’s fixed broadband market is projected to record the highest growth rate over the next five years with subscriptions growing by 7% in 2027 compared to the world average of 2.2%. The projected growth is an indication of the increased focus on broadband adoption for social, economic and personal development. Despite the strong growth, Africa’s broadband penetration has remained low with an average household penetration rate of 11.4% at end-2021 compared to the global average of 59.1%. However, there is a large disparity between Northern Africa and sub-Saharan Africa sub-region household penetration rates. The Northern Africa markets have a more developed fixed broadband infrastructure and hence higher broadband penetration rates and compare well with the developed markets in the world. The sub-region, which comprises markets such as Algeria, Egypt, Tunisia, Morocco and Libya, features in the top-10 list of markets with the highest fixed broadband penetration rates in Africa. South Africa and Mauritius are among the top markets in the subSaharan Africa sub-region in terms of fixed broadband penetration.
Africa’s broadband speeds have improved significantly, driven by the increased technology migration from DSL and WiMAX to fibre and FWA. The migration is s pported by service providers’ initiatives, as well as the rising demand for high-speed broadband services by the consumers. The average broadband speeds in Africa have doubled between 2019 and 2021 and are projected to record a CAGR growth rate of 31.2% between 2022 and 2027 to reach 121Mbps in 2027, according to Omdia research. This is against the global average of 833Mbps in 2027. The consumer expectation of fast, reliable and affordable broadband connectivity across Africa is the main reason for the massive infrastructure expansion and the adoption of new technologies by service providers. Broadband consumers are increasingly becoming aware of the quality of metrics they expect of a broadband connection during the initial sign-up and are keen to follow up with the service provider when they fail to achieve their expectations. mdia’s Digital ons mer Insights – 5G, Broadband and Bundling Survey, conducted in October 2021, found that broadband consumers were increasingly willing to switch to high-speed broadband plans as their bandwidth needs increased based on their choice of digital services. The survey found that over a third of 13,000 respondents (37%) said they had changed their fixed broadband service provider or plan in the past six months. Of those who had changed their service, half (53%) said they had upgraded to a faster speed plan, while close to a third (29%) said they had moved to get a better price or bundle.
The evolution of broadband speeds in Africa will continue over the next five years, driven by the increased adoption of high-bandwidth applications such as video streaming, video calling and realtime gaming. In 2021, only 2% of broadband consumers in Africa accessed broadband services at speeds of above 100Mbps. However, this will increase to 11% of the total subscriptions opting for broadband speeds of 100Mbps and above. However, Africa has made slow progress to transition to high-speed internet due to the slow pace to upgrade the existing infrastructure.
Egypt and o th Africa are Africa’s top markets by cons mer broadband speeds with average speeds of 35Mbps and 50Mbps at end-2021, respectively, compared to the regional average of 24Mbps (see Figure 16). While South Africa has high fibre adoption rates, the FWA 4G/5G uptake has remained high (South Africa was the first 5G market in Africa), which explains the relatively higher average consumer broadband speeds. Egypt has a developed DSL infrastructure that compares well with the developed markets. Omdia projects that up to 24% of consumer broadband subscribers in South Africa will access average broadband speeds of 100Mbps and above by 2027. South Africa is the only African market where gigabit broadband services are available. As such, most of the region will be dominated by consumer subscriptions with less than 100Mbps download speeds well into 2027.
FWA presents a great opportunity to boost connectivity in Africa since fixed infrastructure is underdeveloped. The existing FWA offering is based mostly on 4G FWA, but operators have begun to move to 5G. However, there will still be a need for a robust fibre backbone to be built for 5G services to function effectively. There are also wider economic challenges to grapple with, such as the lack of electricity and the maintenance of physical infrastructure. Moreover, there is also the issue of affordability, particularly when it comes to modem costs (and 5G mobile devices).
For the same reasons, xDSL may be the preferred technology for the low-income segments, as pricing for xDSL packages remains well below fibre (see Figure 17) in the region. Thus, in countries where significant investment in DSL infrastructure has already been made, it may be worthwhile to consider a technology migration plan wherein some investment in upgrading legacy ADSL networks to vDSL could support customer demand for high speed while fibre infrastructure is carefully planned and deployed.
The COVID-19 pandemic brought about a significant shift in the operation of governments and business as it increased the adoption of broadband for the delivery of services because of lockdowns to contain the spread of the infection. In Africa, the pandemic exposed huge disparities in the level of broadband infrastructure development, with several countries unable to fully adopt digital channels for the delivery of services. However, the broadband connectivity challenges encountered in some countries during the pandemic have motivated governments to adopt policies to accelerate broadband connectivity and promote social and economic growth.
Most government broadband policies in Africa are in the form of NBPs and strategies that provide details on connectivity gaps, targets, deployment plans and funding towards the realisation of universal broadband access and coverage. In countries that are yet to launch NBPs, governments promote broadband development through the provision of spectrum to service providers to enable them to expand their networks, as well as providing subsidies for rural network infrastructure deployment in areas with low return on investment (ROI). African governments are increasing the operationalisation of the universal service access funds (USAF) especially developed for promoting digital inclusion in rural underserved and unserved areas. Digital strategies by service providers will be key in promoting digital inclusion and most governments are in support.
Africa’s fibre subscriptions were up 44% year-on-year in 2021 to reach 2.6 million and are projected to increase by 207% between 2022 and 2027 to reach 11.7 million, according to Omdia research. The growth signals a significant shift from legacy fixed broadband technologies such as xDSL and WiMAX to fibre due to its high bandwidth capacity, better reliability and reduced latency. Globally, fibre is projected to be the largest growth driver for the fixed broadband segment over the 2022–27 outlook period and will be the dominant technology in 93 markets by 2027, according to Omdia research.
Omdia publishes the Fiber Development Index (FDI), which tracks and benchmarks fibre development across more than 80 countries. The 2022 edition benchmarks a total of 88 countries across the world, tracking a range of metrics, including household penetration, business penetration, mobile site cell fibre penetration, fibre backbone investment, average download and upload speeds, latency and jitter. In a regional comparison, Africa ranks poorly in fibre broadband development. Of the 88 countries ranked in the FDI, only 16 African countries are tracked, and none is in the top 50. Nevertheless, Africa has recorded significant improvement in fibre development due to increased investment in expanding optical fibre networks across several countries (see Figure 18). African countries are increasingly adopting NBPs and strategies and have identified fibre as a key technology to support rapid broadband development. However, the realisation of the broadband strategy targets is usually a slow process due to the slow pace of optical fibre deployment because of the high cost associated with fibre installations. In addition, fibre deployment in most countries in Africa is focused on general broadband availability and often lacks meaningful objectives and specific policies to accelerate FTTx deployment.
Africa has witnessed rapid growth in fibre-to-the-home/business (FTTH/B) services attributed to the increased expansion of fibre network as service providers shift to fibre to support the growth in bandwidth demand from consumers. The rising demand for advanced multimedia services and corporate-based applications such as videoconferencing, 4K ultra high-definition video services and 3D cloud gaming means that service providers in Africa will continue to expand their fibre network to connect to more homes and businesses. According to Omdia data, FTTx subscriptions in Africa will grow by 207% between 2022 and 2027.
Unlike in developed markets where hybrid FTTx solutions such as fibre to the cabinet (FTTC), fibre to the node (FTTN) and fibre to the distribution point (FTTDp) are preferred, service providers in Africa are focusing on FTTH to connect homes with broadband, and the number of homes passed with fibre has increased significantly across many countries. However, the low penetration of fibre to the site (FTTS) is a big hindrance to increased adoption of FTTH/B across Africa. Figure 19 shows the fibre penetration rates for some selected markets in Africa with the highest fibre development index according to mdia’s FDI . FTT is the base infrastr ct re for s pporting FTT FTT applications. The relatively lower FTTS penetration rates in Africa compared to other regions is the reason for low FTTB/FTTH penetration rates in the region. Despite the huge penetration of mobile broadband via 4G – and soon 5G – in Africa, FTTH will emerge as the pinnacle for broadband connectivity, particularly in terms of supporting high-bandwidth consumer and corporate applications in the future. However, to accelerate FTTH deployment, African governments must collaborate with service providers to address the regulatory and infrastructural challenges associated with FTTH rollout.
Africa’s fixed broadband s bscriptions and service reven e are projected to grow by a AG of 7.6% and 5.7%, respectively, between 2022 and 2027. By end-2027, fixed broadband penetration in Africa will be 15.4% compared to 12.2% in 2022. Global fixed broadband subscriptions will reach 1.6 billion with a penetration rate of 66% by end-2027. Despite the growth, Africa will remain the least penetrated region in the world by 2027.
Fixed broadband connectivity in Africa is achieved through a mix of technologies, including DSL, fibre, FWA, satellite and cable modem. While DSL has remained the largest technology by subscriptions market share, its dominance is constantly under pressure from new technologies such as fibre and FWA. The choice of technology for fixed broadband depends on the connectivity needs of the customers based on use cases and the deployment costs that determine the return on investment (ROI) for service providers. For instance, deploying fibre broadband in rural and remote areas may be very costly as opposed to the more developed urban and peri-urban areas. FWA is a cheaper and faster choice for rural areas to provide affordable broadband connectivity. However, optical fibre is the most future-proof technology to deliver last-mile broadband connectivity to consumers and for backhaul for FWA technology. Omdia market data projects that fibre and FWA combined will acco nt for more than of Africa’s total fixed broadband s bscriptions by 2027
The Broadband Africa Vision 2030, as proposed in this white paper, has the overall goal of achieving universal broadband access on the continent by 2030. Furthermore, the region must achieve fixed broadband penetration rate of above 20% by 2030. The realisation of this goal requires a practical approach by both regulators and service providers by exploring strategies and policies that promote timely and efficient deployment of broadband infrastructure to ensure affordable and reliable services to consumers.
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