African International Bandwidth Market at Tipping Point

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( – The African telecoms market has been transformed by the launch of new submarine cables, according to a new report by Investment Research firm AfricaNext Research. The impact of the SEACOM, EASSY and Main One cables has been far-reaching according to the firm. Median international wholesale bandwidth prices have fallen by more than 70% in many markets; sub-Saharan African lit bandwidth supply rose nearly 300% in 2010, and many countries have raised their international bandwidth intake nearly tenfold.

The growth in international bandwidth has been a catalyst for, and an outgrowth of strong Internet usage growth, according to the report. “Internet user numbers are set to rise, with more than 120m users projected for sub-Saharan Africa by 2015, along with more than 100m active mobile packet data customers, creating a demand stimulus for bandwidth”.

The report notes some concern of an international bandwidth oversupply, but raises doubts that oversupply would translate into a value-destructing bandwidth glut: “At a top level sub-Saharan Africa will face a lit bandwidth surplus that will average around 1.7 Tbps over the majority of the 2010-2020 period. Yet, subsea supply models have been relatively conservative, medium term demand looks stronger than anticipated and retail broadband growth is outstripping projections.” For example, the report notes that under the projections carried out by analysts at Africanext Investment Research, “East Africa will be undersupplied unless cable operators continue to light up new bandwidth capacity.”

The report also warns that more international bandwidth alone is not a panacea: “Increased bandwidth supply will make little difference to prices in countries with concentrated international gateway markets”. The report further notes that while the impact of subsea fibre on satellite will be negative initially, the upside for satellite remains promising. “The demise of satellite has been greatly exaggerated” the authors write. “We expect the bandwidth tide to lift all boats over the long term and see substantial upside in domestic backhaul capacity”.

In “The Future of African Bandwidth”, the AfricaNext Research team builds on months of research to size up international bandwidth demand and supply, analyze African wholesale pricing models and market dynamics and lay out the main plays for investors in the African bandwidth space. In an environment that is as fast-paced as it is difficult to grasp, "The Future of African Bandwidth" provides perhaps the most in-depth research available on Africa’s international wholesale bandwidth markets.

For more information on how to obtain this report and download a full excerpt, please visit the AfricaNext Research website at or contact us directly at info(at)africanext(dot)com.

About AfricaNext Investment Research 
AfricaNext Investment Research provides a wide portfolio of qualitative and quantitative investment analytics tools to institutional investors in African technology markets, designed to help our clients create and maximize economic value. Clients include M&A, Corporate Planning, Strategy and Finance Departments within TMT operators, as well as private equity groups, brokerage firms, investment and commercial banks. We leverage a decade-plus experience in researching and tracking African markets, combined with extensive ground research and one of the industry’s largest operational and financial databases to develop no-nonsense, value and fundamentals-driven analysis.

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