Pyramid: New cables will kick-start African broadband

SEPTEMBER 3, 2009 -- Total broadband adoption in Africa will increase at a CAGR of 28 percent through 2013 as new undersea cables boost Africa's international bandwidth, reducing the number of coastal countries without any cable access from 19 to one, according to Africa Connects: Undersea Cables to Drive an African Broadband Boom.

SEPTEMBER 3, 2009 -- Total broadband adoption in Africa will increase at a CAGR of 28 percent through 2013 as new undersea cables boost Africa's international bandwidth, reducing the number of coastal countries without any cable access from 19 to one, according to Africa Connects: Undersea Cables to Drive an African Broadband Boom, a new report from Pyramid Research.

The biggest change to African telecom markets over the next three years will be invisible, according to the report. "Twelve new undersea cables planned for launch between third quarter 2009 and mid-2011 will remove the most serious obstacle that has historically prevented operators from taking advantage of Africa's great unmet demand for broadband services," says Dearbhla McHenry, analyst at Pyramid Research and author of the report. "As a result, the cables will increase Africa's total international bandwidth from about 6 Tbps to as much as 34 Tbps and will reduce the number of coastal countries without any cable access from 19 to one," she adds.

"Through the end of second quarter 2009, 40 percent of continental Africa's 47 nations had no direct cable connections at all, forcing operators to rely on expensive satellite links," McHenry explains. "The combination of heavy reliance on satellite and monopoly control of local access to undersea cables meant that prices were also astronomical: Rates for SAT-3, for example, are about US$4,500 to $12,000 per Mbps per month, which is more than 20 times more expensive than bandwidth prices in the U.S.," she says.

The quintupling of Africa's international bandwidth will support the upcoming boom in African broadband adoption by increasing capacity and bringing down prices for end users, according to Pyramid. "By early 2011, we expect that more than half of all African markets will have 3G, while broadband coverage is increasing daily via both wireless and wireline technologies," McHenry comments. "We forecast that total broadband adoption in Africa will increase at a CAGR of 28 percent from 2009 to 2013, as increased competition in the international bandwidth market brings down prices and as new cables support the corresponding increase in demand."

Africa Connects: Undersea Cables to Drive an African Broadband Boom is part of Pyramid Research's Africa and the Middle East Telecom Insider report series. This report is priced at $595 and can be purchased online or by contacting Amalia Vega.

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