The Future of African Bandwidth Markets - African International Capacity in an Era of Bandwidth Abundance

This study finds that the African international capacity market has entered a new era, that comes after a period of dynamic growth between 2010 and 2015, and follows a miserable decade of bandwidth scarcity between 2000 and 2010.

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Market Study ~ published March 2017 ~ 100 pages ~ Xalam Analytics ~ Frequently asked questions

Things are different in 2017. Today's African international capacity market is facing a seminal challenge to its economic structure, a paradoxical predicament at a time when Internet traffic is booming across the continent. The dynamics behind these changes and their implications for market players and investors are at the heart of The Future of African Bandwidth Markets report.

There is much to assess. Our research says Africa’s international capacity demand profile looks excellent. The headline number of broadband connections in Sub-Saharan Africa has grown 10x between 2010 and 2016 and should hit close to 300m by 2020. African demand for international capacity has been doubling every two years and will double again between 2016 and 2020.  This market, unquestionably, will continue to need international bandwidth – and lots of it.

International capacity supply has been growing too. Between system upgrades, new cable roll-outs and technology improvements, African international cable capacity will reach twenty times 2010 levels -and almost four times 2016 levels by 2020.

If the 2000-2010 decade was a decade of bandwidth scarcity, the 2015-2020 period will be a phase of African international bandwidth abundance. How will the marketplace handle this bandwidth bonanza?
An Unprecedented View into African International Capacity Markets and Models

The most comprehensive independent report available on African international capacity markets and part of Xalam Analytics’ “Future of the African Internet Series”, The Future of African Bandwidth Markets provides an unprecedented view into African international capacity demand, supply, key players, pricing and evolving business models.

It explores key questions such as the size of demand, the impact of capacity oversupply, the economic viability of proposed cable systems (SACS, SAIL, Liquid Sea, etc.), the future of African pure play capacity models, the impact of new wholesale capacity disruptors such as Angola Cables and Djibouti Telecom, how much lower international capacity price points can go, the impact of IXPs, which players will control African international capacity in 2020 and more.

A reference report for all players and investors in the African international bandwidth market.

Sample Key Points Explored in the Report
The insights derived from that our research on African international capacity markets are distilled in this report, covering critical key questions and points, including:

> Why we’re projecting African international capacity demand requirements to double by 2020;
> Why we are projecting equipped subsea cable capacity to double from 2016 levels by 2020;
> Why African capacity surplus volumes are actually trending upwards despite a market that is already nominally oversupplied;
> Why we say that despite oversupply at macro level, only one market has a true bandwidth glut, a third of SSA markets have a bandwidth deficit and bandwidth is being rationed in almost a fifth of African markets;
> Why there is a deepening divide on African capacity pricing – with material long term implications
> Why we still see a solid case for building out new capacity – despite the fact that bringing in new international capacity into Africa does indeed look like overkill;
> Why we say that in an era of bandwidth abundance, the business case for stand-alone, single promoter pure play international wholesale carriers will probably no longer be viable in Africa – We don’t expect any more Seacoms
> Why we say Angola Cables ambition to be a global first tier carrier is credible – but will not be simple
> Why we say Djibouti Telecom’s strategic moves may be the smartest set of bets we’ve seen by an African operator in a long time;
> Who, of Angola Cables, Camtel Cameroon, Djibouti Telecom and Telecom Namibia will do most to disrupt the African international capacity market, and why;
And more..

Markets Covered with Good Depth:
The core analysis of the report is driven by insights and data generated primarily from these markets;
We provide a top level view of key international cables and routes, along with market dynamics;
Country-focused profile, key trends, projections and other analysis: 
Burkina Faso
Cameroon
Senegal
Cote d'Ivoire
South Africa
Zimbabwe
Ghana
Kenya
Nigeria
Uganda

Other Markets Covered:
The core analysis of the report is driven by insights and data generated from these markets;
At a minimum, some top line numbers and projections are provided in specific tables;
Key trends and dynamics explored, but no specific country profiling 
Djibouti
Ethiopia
Tanzania
Rwanda
Guinea
Mauritius
Zambia
Botswana
Namibia
Mali


Companies Mentioned:
Camtel Cameroon
Djibouti Telecom
Angola Cables
Telkom SA
WIOCC
PCCW Global
Orange Group
Liquid Telecom
Seacom
MainOne
Globacom
MTN Group
Vodafone Group
Telecom Namibia
Sonatel
Maroc Telecom
Benin Telecoms
Expresso/Dolphin Telecoms
TTCL

 

Table of Contents

EXECUTIVE SUMMARY: THE AFRICAN INTERNATIONAL CAPACITY MARKET HAS ENTERED A NEW ERA

 
PART I   Market Context: of Africa’s Explosive Data Growth, 4G/5G, FTTH, and 100Gbps Technology
The African International Capacity Market is in the Midst of Deep-seated Transformation 
Backhaul Capacity Demand Catalysts – A Remarkable Growth in Retail Broadband Connections
Backhaul Capacity Demand Catalysts: 3G Stabilizes, 4G Rises, and 5G is Coming
Backhaul Capacity Demand Catalysts: The African FTTH Boom Has Started
Backhaul Capacity Demand Catalysts - The Explosive Growth of (Mobile) Data Traffic
100 Gbps Wavelength Technology Has Transformed African Cable Economics

PART II   African Capacity Demand vs. Supply: of Bandwidth Oversupply, Deficits and Rationing
Africa Bandwidth Supply – A 5 Tbps Market
Africa Bandwidth Supply Forecast View – Another International Capacity Boom on the Way
African Demand for International Capacity Has Been Doubling Every Other Year
Understanding Our Core Demand Assumptions
Supply vs. Demand: After a Decade of Bandwidth Scarcity, a Decade of Bandwidth Abundance
Bandwidth Begets Bandwidth – Demand Growth Dovetails Supply Growth
Oversupply Analysis: Utilization vs. Lit Capacity
Bandwidth Oversupply in Most Markets, Bandwidth Glut in South Africa Only
Bandwidth Glut, Deficit, or Rationing? How African Countries Map Out

PART III   Can the African Wholesale Model Survive an Era of Bandwidth Abundance?
After a Decade of Bandwidth Scarcity, a Decade of Bandwidth Abundance
The African International Wholesale Market Paradox – Strong Traffic Growth, but Business Under Pressure
From Liquid Sea to Africa-1 – The Case Against New Cable Systems
The Case for New Cables, Part 1: When It Comes to Traffic Volumes, Who Really Knows?
The Case for New Cables Part 2: The Latency & Self-Provisioning Case
The Case for New Cables Part 3: Bandwidth Gluts Don’t Matter
Who’s the Hub? Benchmark of African Countries’ Hub Strategies, From Dakar to Dar and Djibouti
What’s the Path Ahead for African International Capacity Wholesale?
How Others Have Evolved – The Level 3 Model
PART IV    African Transit Pricing – Downward Spirals, Deepening Divide and the Impact of IXPs

The Submarine Cable Impact on African Capacity Pricing Has Been Transformational
The Changing Nature of African Capacity Pricing – From E1s to STM-1s, IRUs to Leases
Africa’s Deepening International Capacity Pricing Divide
IXPs and the Race to Fix Africa’s Traffic “Tromboning” Problem
Can IXPs, Caches and CDNs Truly Curb the African Appetite for International Capacity?

PART V  The Rise of the Disruptors: How Angola Cables, Camtel, and Djibouti Telecom Can Transform the African Capacity Market

The Rise of the Capacity Market Disruptors
Disruptor Analysis: The Fascinating Rise of Angola Cables
Disruptor Analysis: The Fascinating Rise of Angola Cables
Angola Cables Subsea Project Overview: SACS and MONET
Angola Cables – More than an International Capacity SPV – A Tier-1 Global Play
Angola Cables – Charting the African Impact: To Disrupt or Not, that is the Question
Will Angola Cables Be a Rational Actor?
Camtel -Building Central Africa’s Best Pool of Fibre Capacity Assets, with the State’s Help – and China’s
 Review of Camtel Fibre Assets, From SAT-3 to SAIL
Camtel’s Wholesale Play – A Matter of Survival
The Case for SAIL (or Lack Thereof)
Can Camtel Change its DNA – and Pull this Off?
Djibouti Telecom – From a Uniquely Strategic Position, Building Africa’s Foremost Capacity Hub
Review of Djibouti Telecom Fibre Assets, From EASSY to AWE
Djibouti Telecom Outlook – Likely a Top 3 African Wholesale Player Within 2 Years

PART VI   Who Controls African Internet Capacity? A Key Player Chart Analysis

PART VII   From EASSY to WACS - Sample Africa Cable Systems Snapshot Profiles
Africa Coast to Europe (ACE) – Bringing Connectivity Where There Wasn’t Much Before
ACE – Ownership Structure Has Been Excellent for Penetration, Tough on Upgrades
ACE Cable Key Charts – Shareholders Base, Design & Equipped Capacity
West Africa Cable System (WACS) – Africa’s Largest Pure Telco Subsea Cable
WACS – A Cable for the West African Telco Elite
EASSY – A Broad Ownership Base
EASSY – The Largest (Non-Kenyan) Cable in East Africa – and Arguably the Most Dynamic
Seacom – The Pioneer Subsea Cable Disrupter
Seacom – A South African Focus, and the Need to Evolve its Model
Other African Cable Systems – A Summary
Other African Cable Projects – Whatever Happened to SAEx, WASACE, Africa-1?

PART VIII   From Burkina to Zimbabwe - Country International Capacity Snapshot Profiles
International Capacity Country Snapshot: Burkina Faso
International Capacity Country Snapshot: Cameroon
International Capacity Country Snapshot: Ghana
International Capacity Country Snapshot: Ivory Coast
International Capacity Country Snapshot: Kenya
International Capacity Country Snapshot: Nigeria
International Capacity Country Snapshot: Senegal
International Capacity Country Snapshot: South Africa
International Capacity Country Snapshot: Uganda
International Capacity Country Snapshot: Zimbabwe

Appendix – International Capacity Country Projections Table

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