Building a better Internet in Africa – the time is now
Updated: Jul 8, 2020
I was recently reminded of that analogy between railway networks and telecom networks.
Both are crucial infrastructures that connect people to the wider world and transport various goods and services. The more extensive the rail or telecom network is, the more opportunities there are for business growth and economic development. The thing about building a good network though, be that rail or telecom, is that stakeholders need to work together. Without collaborative effort between public and private players, the entire project is derailed, or unplugged if you will, by narrow-minded objectives.
I think it’s worth being reminded of – particularly as we navigate the new normal of the Covid-19 pandemic. Virtual networks and digital access are more important than ever before and yet, Internet penetration in Africa is still only 39.3% compared to a world average of almost 60%. There are huge opportunities for the African Internet market right now: demand is through the roof as businesses, homes and governments all scramble to shift their operations, lives and services online.
So, in these troubled times, how can we push the Internet further and faster across the African continent? Happily, we don’t need to reinvent the wheel. As demonstrated successfully in other regions, a more consolidated approach between governments and businesses is vital. Here are three key focus areas:
1. Licensing and regulations
The regulatory environment in Africa is absolutely critical to attracting investment and evolving the continent’s Internet ecosystem. Unfortunately, some markets are held back by heavy-handed governments; in one African market, for example, a megabit per second costs $90-$99 but is sold at $280 – that’s a hefty Internet tax of around 200%.
On the flipside, South Africa’s deregulated business environment, coupled with the deregulation of the telecommunications framework, created a boom in licensed ISPs and IXPs across the country. This helped fast-track Internet penetration and resulted in vast economic growth. Connectivity is still far from ubiquitous but energetic entrepreneurs and SMEs are working hard to get things done – without too much negative interference from government.
Access to new markets across the African continent is increasing thanks to a growing number of both terrestrial and subsea cable systems. One of the new kids on the block, 2Africa, for example, is an impressive subsea cable that will start serving the African continent in 2024.
Many new business opportunities have arisen as capacity for Internet services increased in line with demand. This will hopefully induce an exciting influx of new online content producers, payment platforms, retail services and the like.
3. Mutual data centres and data exchange
With the continent’s supply of subsea cables growing, the demand for data centres – particularly colocation - is growing. We’re seeing a continent-wide spike in interest and investment in data centres.
South Africa is currently Africa’s largest data centre market with Nigeria coming in second. Just a few months ago in March, when most business activity had effectively shut down thanks to COVID-19 lockdowns, PAIX announced their new datacentre launch in Kenya and emerging-markets investor Actis bought the Rack Centre in Lagos.
There is still massive scope for growth in Africa now. It’s a real opportunity for us to increase penetration and evolve the Internet ecosystem for good. This is both a terrifying and seriously exciting time. A consolidated approach will get things moving faster and provide bigger, more sustainable wins for us all.