Wednesday, 20 June 2012

LTE launches in Africa

LTE launches are coming thick and fast at the moment and with availability of decent handsets growing, consumers are begining to see the benefits of the technology... or rather, they don't mind having it, which represents a win in itself if we recall the trauma of 3G. Although I don't much trust analyst estimates on these things, ABI research reckon there'll be 80 million LTE subscribers by 2013.

Contrary to logic which would suggest new network technology is beyond the means of poorer countries, Africa isn't being left out of LTE. As the picture shows, four cellular networks have launched this year, in Angola, Namibia, Tanzania and Mauritius. There are also advanced trials taking place in a number of countries - the lighter red on the picture.
I'd expect half a dozen major African countries to have a live LTE network by the end of the year. I'm reasonably bullish with respect to service availability because for many operators with reasonablely modern HSPA base stations an upgrade to an LTE RAN is a matter of a software upgrade. In urban areas the backhaul that constrains developed market operators is not a problem for developing operators as they've installed fibre - MTC in Namibia is a great example of this. Their upgrade to LTE in Windhoek took only 45 days to complete.

There are, of course, issues that will constrain demand. On the supply side, spectrum availability will be an issue in many countries. Spectrum regulation is generally weak in Africa and useful bands remain uncleared in most of the market.

On the demand side, cost of service and terminal devices will be a constraint. I've compiled a simple assessment of pricing in the table - the absolute pricing of services seems to be reasonably similar, however affordability in Tanzania is much worse than in richer Angola and Namibia.
So although there could be half a dozen active networks in Africa this year, I'd be surprised if the number of cellular LTE users on the continent crept much over 10,000 this year.

We'll see whether my "analyst-style" prediction is any good in December!

No comments:

Post a Comment