Skip to main content

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!

Comments

Popular posts from this blog

Impacts of a handset leasing model on mobile telcos

Following yesterday's post, here's some related thinking on the impacts on operators of handset leasing. Handset sales represent around 25% of operator revenues in a typical European market, but generate only around 5% of margin. It may therefore be the case that the scenario described would lead operators to a more profitable structural model than exists today. Oil companies are consistently and acceptably profitable, despite being (literally in some cases) the ‘dumb pipe’ that operators are so desperate to avoid becoming. One of the reasons for the oil majors sustained profitability is clear focus on their role in the value chain – to supply the fuel that enables transportation, relying primarily on location, then brand and finally product innovation to compete. BP or Shell do not need to subsidise the purchase of a car in order to drive consumption of fuel because consumers are ‘hooked’ on it (it gets them from place to place) and there are many credible car manufacturers an...

Differences between Industrial and Digital businesses

Since I'm stuck on a Eurostar crawling through western France I thought I'd use the downtime to share this table I've made on the differences between Industrial and Digital companies across the main business functions. A strange insight into how my mind works... but hopeful a useful summary!

Value drivers for telecoms retail

I've been doing a really large number of driver trees recently - we've taken to using them on every project to get really into the guts of value creation for businesses and thus decide where to focus initiative development (How To Win, if you're keeping score). Anyhow, I had to pause for thought recently to work out how to represent the subscription aspect of telecoms retail for a client. Since it took me a minute, I thought I'd share... its lack of elegance suggests that its not quite right, although it was enough to demonstrate that there was a certain lack of coverage in the initiatives that my client was pursuing and thus spark a debate. Enjoy.