While mobile phones have transformed the lives of hundreds of millions of Africans, the biggest challenge is to bridge the connectivity gap.
Many African countries are grappling with how to connect all their citizens to broadband — a tool for driving social, economic and personal development.
The barriers to broadband expansion and access for all in Africa include a lack of regulatory capacity, inappropriate allocation of resources, and lack of funding. To tackle these problems, the next step of broadband expansion in Africa is to bring internet connections inland from underwater submarine cables and build fibre networks.
The International Finance Corporation (IFC) contends that building fibre networks is expensive, with 1km costing $30,000 (R537,112). The IFC claims Africa still needs 500,000km of cable to attain full connectivity, which will cost $15bn (R214bn).
Africa has the largest potential for broadband connectivity in a globalised world, marked by the digitalisation of the economy. Therefore, the need to connect Africa to broadband has become impossible to ignore — governments and capable telcos need to act in concert.
In that regard, MTN is working on creating standalone business, FibreCo, to build fibre networks across the continent.
MTN GlobalConnect, an infrastructure services business and an operating company in the MTN Group, is driving the company’s FibreCo ambitions to stitch African countries together and connect them to the rest of the world.
Will it be up to Frédéric Schepens, CEO of MTN GlobalConnect, to thread the needle? Schepens’s team has already rolled out 5,000km of new fibre, bringing MTN’s inventory of fibre to more than 105,000km as of September 2022. In Zambia, MTN GlobalConnect rolled out nationwide fibre connecting that country with six neighbouring countries.
A perfect move to connect landlocked African countries to fibre.
Nonetheless, MTN may have joined the party late to connect Africa’s population to broadband because Liquid Intelligent Technologies (Liquid) has been doing so for some time.
Liquid, a subsidiary of Cassava Technologies — a digital infrastructure services company owned by billionaire Strive Masiyiwa — has been driving its vision of a digitally connected future that aims to leave no African behind. Liquid’s fibre network spans more than 100,000km across the continent.
Does that mean Nic Rudnick, CEO of Liquid, has the upper hand against Schepens and GlobalConnect?
I don’t think so.
The first-mover advantage for Liquid does not necessarily mean it is ahead of its rivals. Yes, the Cassava-owned firm has strategic backers who continue to pour capital into the business, enabling it to invest in fibre networks in Africa.
However, MTN’s ambitions for broadband expansion imply that Africa’s biggest mobile phone company is ready to compete aggressively. MTN GlobalConnect has already set up subsidiaries in five African countries as it scales its fixed connectivity and wholesale services across the continent.
Therefore, the growth of Liquid and MTN GlobalConnect may spur competition and enable new players to emerge with unique broadband solutions.
With the imminent separation of MTN GlobalConnect as a standalone FibreCo business, MTN as a parent company can take on strategic investors to enable FibreCo to expand its network. To develop this business further, MTN has to raise about $500m (R7.6bn) to grow into an open-access network across Africa.
Competition between Liquid and MTN should be welcome as it will ensure the deployment of robust fibre networks and data centres that will safeguard connectivity between different territories of the vast continent.
The deployment of fibre networks and data centres will benefit Africa’s more than 1.3-billion people, of whom 50% are under the age of 25. Such a development could unlock rapid economic growth, access to services and innovation and create jobs.
To fully reap the benefits of broadband expansion, African governments must invest in creating a digitally savvy workforce and encourage digital entrepreneurship and innovation. They must invest in school connectivity.
Young African people will need to empower themselves with various skills, such as cloud computing, cybersecurity, data analysis, and software development.
There are already African-based edge computing companies such as inq. — owned by Convergence Partners, a private equity firm founded by Andile Ngcaba.
The company is set to benefit from expansive data centres in SA and is eyeing opportunities for edge computing in the rest of Africa.
Developments at MTN, Liquid and inq. will create opportunities for young people.
I hope Ngcaba, Masiyiwa and MTN CEO Ralph Mupita are ready to raise more capital to digitise Africa and ensure that the “Internet for All” that benefits every African child becomes a reality.
Will this allow Africa to become part of the global information society and participate in the fourth industrial revolution?
I hope so, but it is early days.
The continent’s conglomerates owe it to themselves to see that Africa, especially landlocked countries, is wired to broadband.
That said, building reliable fibre networks won’t be enough.
Africa’s conglomerates, equity investors and financiers will need to invest significant capital in building a digital ecosystem, digital skills, and local content.
For now, MTN and Liquid cannot possibly stitch all African countries onto their fibre networks — they’ll need to collaborate with other operators to do this and make a concerted effort to invest in satellite to cover rural areas with wireless broadband.
• Lourie is the founder and editor of TechFinancials.
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