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Internet for everyone in African GSM Networks

GSM technology as a cost-effective internet solution in Sub-Saharan Africa

Authors: O Hesselmark; A Engvall
Publisher: Scanbi Invest, 2005

Full text of document

This report presents the results of an investigation of the technical and commercial viability of using GSM technology for providing wireless data services on a large-scale basis in Sub Saharan Africa. Privately financed GSM operators in Sub-Saharan Africa have in a few years created a completely new telecom infrastructure with a capacity far greater than what the state owned telecom authorities have provided in 100 years. Certain initiatives are under way and their success is a prerequisite for Internet services to become a mass market in Africa. The report highlights the importance of low-cost, dedicated data terminals for the emerging markets.
It is mainly aimed at:

  • Operators, to help them work out their business cases based on their own special conditions.
  • African Governments, to help them realize that there is a new opportunity to get Internet services to a very large percentage of their population. Many national ICT plans exist, but very few of them have taken the GPRS opportunity into account.

Key Points:
  • Expectations of future growth in subscribers and revenues continue to mobilise investment capital for expansion.
  • At the same time, Internet access is lagging behind, and most African nations are far behind in their use of ICT.
  • The new GSM networks have wider area coverage, and the built-in GPRS/EDGE standard can provide wireless data services wherever the GSM networks reach. Data services can become an important future revenue source for a GSM operator.
  • Only a few operators in Africa have implemented GPRS and started to sell data services. GPRS services require additional investments that may compete for management’s attention with further investments in coverage, in order to meet sometimes-aggressive competitors.
  • However, GPRS services are profitable even for small operators. There are therefore very strong reasons for starting to address this market in order to ensure that revenue growth continues even after the growth in the voice market has begins to taper off.
  • There is a strong upside in profitability for those operators that can secure a good market share by addressing the difficult distribution issues.