The advent of wireless technologies as an alternative to the often poor and outdated fixed-line technologies has promoted rapid market growth. Additionally, West African governments have begun to realise the importance of information and communication technology (ICT) in economic development and have made some improvements in the regulatory space.
New analysis from Frost & Sullivan (ipcommunications.frost.com), Analysis of Selected West African Broadband Markets, finds that the market earned revenues of over $420 million in 2007 and estimates this to increase fourfold by 2014 to reach $2.2 billion. The technologies covered in this study are asymmetric digital subscriber line (ADSL)/digital subscriber lines (DSL), broadband wireless access (BWA), leased lines and integrated services digital network (ISDN), fixed and mobile worldwide interoperability for microwave access (WiMAX), and very small aperture terminal (VSAT).
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"The introduction of wireless and fixed-wireless technologies in West Africa, coupled with the low broadband penetration rates in the region, has been a key growth driver," says Frost & Sullivan Industry Analyst Spiwe Chireka. "Historically, broadband development in the region has been driven by fixed-line incumbents but, through wireless technologies, internet service providers (ISPs) can circumvent the slow or stagnant development of fixed-line infrastructure."
Moreover, with a regional penetration rate of less than five per cent, the addressable market in this region is huge, encouraging new participants to enter here.
Despite impressive developments in broadband, issues related to affordability and literacy, coupled with the limited financial capacity of operators to invest in infrastructure, continue to hamper market growth. The cost of doing business in some countries is prohibitively high and the market remains characterised by incumbent monopolies, impeding steady market expansion.
"Current networks are outdated and in shambles except in Senegal and the Ivory Coast," notes Chireka "This affects the quality and type of services that ISPs can provide."
Broadband providers have turned to wireless technologies to enable them to effectively compete with incumbents and exert better control over their networks.
"Broadband prices have decreased by an average of twenty per cent in the past two years, making these services more affordable," concludes Chireka. "Technology partnerships between companies have further alleviated issues related to the shortage of investment capital for network expansion."
Analysis of Selected West African Broadband Markets is part of the Communications Services Growth Partnership Services programme, which also includes research in the following markets: East African Broadband Market, Nigerian IT Infrastructure Outsourcing Market, and South African Broadband Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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Analysis of Selected West African Broadband Markets / M2CB