The Fourth Industrial Revolution will fail Africa if we don’t solve rural exclusion.
With most African countries still categorised as ‘developing’ and large sections of the population spread widely across vast geographic expanses, it’s no secret that the continent struggles with the challenge to guarantee its rural residents don’t get left behind.
With 5G coming, and the fundamental role it will play in enabling much of the Fourth Industrial Revolution (4IR), there’s a greater requirement for cellular base station density than with any previous mobile generations. This increased demand for infrastructure only exacerbates the problem.
It’s a challenge that few countries seem to have solved effectively – balancing the commercial interests of telecommunications service providers with the need for citizens to be connected.
Africa is the second most populous continent in the world, and, according to worldometers.info.com, just 41% of the population lives in urban areas.
“The need for a reliable telecommunications infrastructure in rural Africa is greater than ever,” says Samantha Naidoo, SAP Africa’s telco and professional services industry value advisor. “Of the total Sub-Saharan population, 63% live in rural areas, with internet penetration currently estimated at 27.7%, at 346 million users.”
The Hootsuite ‘We are Social Digital Report 2019’ states that internet penetration in Africa is only 36% of the population. A recent CNN Business report claimed of the 25 least connected countries in the world, 20 are in Africa and just 22% of homes have access to the internet.
Whichever number is closest to the truth, the fact remains there’s still a large section of the population that remains unconnected to basic internet services. Before we even get started on accessing cloud-based artificial intelligence or harnessing the benefits of the Internet of Things, there’s a need to address the lack of rural access.
Efforts are being made; for example, Zimbabwe intends to establish a legal framework to license Mobile Virtual Network Operators to extend connectivity services. Nigeria has secured a $100 million loan from the Export- Import Bank of India to deploy solar-powered telecommunication sites and extend national broadband coverage. At least 1 000 sites will be installed across rural areas, beginning with Oyo state, over a period of 12 months.
Alphabet subsidiary Loon, which is working on high altitude balloons to create wireless coverage, partnered with Telkom-Kenya to provide internet in rural areas, and announced a new ground station in Nyeri.
In May this year, Angola’s government announced a new partnership with OneWeb to expand internet access to rural communities by 2021.
But are these initiatives sufficient to address the baseline issue – how to guarantee digital inclusion across such a vast terrain, at minimal cost, with the promise of ROI for service providers and with sustainability and scalability at the core?
Question of ROI
Dobek Pater, director: business development at Africa Analysis, says a key issue is the return on investment for telecommunication service providers. “ The deployment cost of infrastructure to cover wide geographic areas often generates relatively little return income, compared to the urban environment. Apart from last-mile access infrastructure, there’s also the cost to provision backhaul.”
Reaching rural areas with limited infrastructure means the burden to secure connectivity rests with the service provider alone.
Seacom’s chief executive officer Byron Clatterbuck emphasises there is no silver bullet, adding t hat, while secure fibre optics (once deployed and continually upgraded) are proven to be the most economical and stable way to transmit data back and forth, it requires electricity supply and diverse civil infrastructure.
“Without having railways, roads, bridges across rivers, reliable power and other basic infrastructure, it’s very difficult for a telecommunications company to build a fibre optic network in a rural area. Fibre can very easily be dug into the dirt along a dirt path, but the fibre needs to be powered too. This would require the telco to buy generators with UPS power supplies, have the equipment in rural areas and secure the equipment against theft. The cost is five to 10 times that of building along the highway or where already established infrastructure exists.
“With only a dirt road, no power and a limited amount of security in that area, a telecommunications provider would have to put everything in place themselves, which begs the question: what is the return on investment?”
The price tag to reach rural areas is also impacted by external and often difficult-to-control issues, such as vandalism and theft.
In South Africa, managing executive for Vodacom Eastern Cape, Mpumelelo Khumalo, feels there’s a need for improved vigilance by law enforcement to minimise site vandalism.
“This costs local network providers hundreds of millions of rands each year, money that could have been spent to deploy network coverage.”
MTN issued a statement in July expressing concern over what it described as a rise in battery theft and vandalism at cellphone towers across the country.
The operator believes a greater fightback is needed to avoid the costs of replacing batteries and fixing damaged infrastructure being passed on to consumers.
“Battery theft and related vandalism is costing MTN hundreds of millions of rand and the impact on the entire industry is exorbitant. MTN had 733 batteries stolen from across the country in April,” says Ernest Paul, GM: network operations, MTN.
Analysts and ICT professionals agree that spectrum availability remains one of the most pressing issues.
Pater continues: “Access to relevant spectrum would make deployment of the access infrastructure less expensive, resulting in operator ability to cover a wider area quicker, at a lower cost. Specifically, the 700MHz and 800MHz spectrum is very useful for these types of rural area deployments to provide adequate broadband coverage. Much of this spectrum hasn’t yet been released to the telecommunications industry, partially because it’s still being occupied by broadcasting companies.”
Many countries have yet to fully complete the migration from analogue to digital systems and available spectrum is taken up by analogue services for broadcasting and related services.
According to Pater, in countries such as Nigeria or Kenya, so-called high-demand spectrum for 4G network deployment has been awarded to some companies, including sub-1GHz spectrum.
“However, overall, the deployment of 4G services in rural areas in Sub-Saharan Africa is very limited at present. The focus is still largely on 3G deployment. Where 4G is being deployed, it’s normally in larger urban centres, targeting higher disposable income consumers and SMEs (through fixed wireless broadband application).”
There is a sense of urgency in South Africa for the government to avail spectrum.
Khumalo adds: “The most significant obstacle to reducing input costs and, by extension, data prices is the fact that no new spectrum has been allocated in South Africa in the last 14 years.”
However, government recently announced the release of its policy and policy direction for the licensing of high-demand spectrum, which is understood will facilitate regulation of a wholesale open access network (WOAN), first mooted in 2016.
A single, open access network would require significant changes to the previous policy framework for spectrum allocation. According to an ITWeb story at the time of proposal, the WOAN would be a ‘public-private sector owned and managed consortium’.
In June 2019, Premeshin Naidoo, managing principal: Telecommunications, Media and Technology, Absa, penned an article in which he said the WOAN concept “should have economic appeal to all operators if, crucially, it is executed in the right way through market forces. Active infrastructure-sharing would then truly move telco competition to be services-based, with the multiple benefits of price, innovation and improved service offerings.
“The government, however, would like to perhaps own or have a significant stake in the WOAN, or perhaps influence who does ultimately own the WOAN, but economic efficiency requires that market forces drive both the demand and supply.”
Pater believes the answer to cost-effectively reaching rural areas lies in public/ private partnerships.
He says this model could be used to address the spectrum issue, for example.
Pater suggests that private sector operators could bid for, and secure, requisite spectrum licences to build infrastructure not only in ‘high-return areas’, but also in lower-margin and rural areas.
Governments have the option to offer subsidies to operators to deploy infrastructure in underserved areas, he says.
“These could come in the form of tax breaks to encourage operators to build out their networks in areas that may be marginally profi table. In countries where the state still controls the incumbent operator, such as Ethiopia, the government could direct the national operator to deploy broadband infrastructure in rural areas. However, oft en in such cases, limited funding or access to funding is a problem,” says Pater.
In Zimbabwe, the concept o f infrastructure- sharing between telecommunications operators is gaining momentum. In May, Econet Wireless and its closest rival NetOne, the mobile arm of TelOne, signed an infrastructure- sharing agreement in line with a directive by the Postal and Telecommunications Regulatory Authority of Zimbabwe. NetOne plans to leverage Econet Wireless’ footprint, while Econet will utilise NetOne’s infrastructure to extend its reach in untapped areas.
SAP Africa’s Naidoo says infrastructuresharing agreements are gaining momentum because this arrangement minimises upfront investment costs and maximises benefit.
“A recent example of this is the Telkom and Vodacom infrastructure-sharing partnership in South Africa, which leverages a shared footprint and infrastructure, thereby providing a more cost-effective solution for both parties. Vodafone Cameroon recently signed a ‘strategic national network sharing agreement’ with CamTel, allowing Vodafone to use CamTel’s existing network infrastructure in Douala and Yaounde and to expand its coverage to new locations across the country,” she says.
hatever the path a country ends up pursuing to extend connectivity to rural areas, there will be little achieved without the buyin of all stakeholders – and that includes government.
“A critical step for governments is to formulate their national broadband ambitions and craft a national strategy. Once the national objectives are set, the government can then formulate a national roadmap of how they propose to achieve their goal. The government has various levers that it can use – policy, legislation, regulation that can affect supply side and demand side factors,” says Pater.
Artur Mendes, chief commercial off icer at Angola Cables, says all relevant stakeholders need to work together to address the issue of affordable communication.
He says this will be critical if technologies like 5G are to be leveraged. “5G could help to revolutionise several industries, but there are still a number of issues that need to be addressed and substantial investments made if 5G is going to become accessible. The establishment of additional datacentres and internet exchange points could provide a solution, but such decisions need to be based on economic viability and customer demand for such assets.”