Telecom Review successfully presented its latest webinar titled ‘African Vistas: The Rural Connectivity Revolution’, which gathered industry experts to discuss the current state of connectivity in Africa, along with sustainable solutions and challenges and Government policies and public/private collaborations.
Ismail Tber, Senior Manager TMT & Due Diligence, Strategy and Management Consulting at PMP Strategy, was the moderator of the panel which featured executive panelists, including John Omo, Secretary General, the African Telecommunications Union; Omar Moya, Head of Center of Expertise Mobile Networks MEA, Nokia; Maria Gabriela Macra, Governmental Projects Director, Sofrecom; Dayn Amade, CEO of Tablet Comunitario; Iris De Brito, Senior Researcher, member of WADGF.
In his opening note, John Omo highlighted the persistent connectivity challenges in Africa despite significant progress. “About 200 million people lack mobile broadband coverage, constituting nearly half of the global unconnected population. An additional 800 million, though covered, are not subscribed to mobile broadband services.” The challenge lies in narrowing the extensive connectivity gap, particularly in economically unfeasible regions where low-income rural residents face obstacles in both access to and literacy in digital technologies.
Omo shared insights from GSMA, indicating a 54% lower likelihood of internet usage in rural areas. The ATU is concerned about this connectivity gap, particularly among women, the disabled, and young girls. Efforts are focused on policy reforms, cost reduction, and partnerships with international organizations for shared resources, knowledge, and technology. Positive outcomes have been observed in ICT infrastructure development through collaborations.
To address the issue of rural connectivity, the emphasis placed on modern, secure, and digital infrastructure, prudent spectrum management, and resource allocation is paramount. The goal is to extend affordable broadband to unconnected areas, narrowing the mobile broadband usage gap. He concluded that engaging ATU members and fostering discussions (similar to those discussed during this webinar), are important for understanding challenges and working collectively for Africa's benefit.
Current State and Challenges
Starting off the discussion about the current state of connectivity in Africa, touching upon rural areas specifically, Iris De Brito, Senior Researcher, WADGF, shared some statistics to measure the extent of the issue.
According to Iris, only four countries in Africa— Tunisia, Seychelles, Mauritius, and South Africa— display Electronic Government Development Index (EGDI) values above the global average of 0.6102, while other countries display significantly lower values.
Moreover, in terms of e-participation, the world average is 0.4450 and only Rwanda, South Africa, Kenya, Tunisia, and Ghana meet those values. At the bottom of the list is South Sudan.
In terms of online service index, the global average is 0.55, with Eritrea recording 0, joined by Comoros, South Sudan, Guinea-Bissau, and Mauritania in the lowest ranking.
The convergence of EGDI, e-participation, and the online service index is vital for ensuring the effectiveness of digital transformation in Africa.
Omar Moya, Head of Center of Expertise Mobile Networks MEA, Nokia, added that “The technical part of the implementation is affecting the business model— the business case that operators need to have in order to make rural coverage a reality.”
Some of the examples Omar provided included low mobile penetration, device cost (which is an ongoing trend in the right direction), and the backhauling (or the interconnection) of the rural sites.
Adding to Omar’s insight, Maria Gabriela Macra, Governmental Projects Director, Sofrecom, discussed the two ways that operators approach the problem of business models within rural Africa. Firstly, “they cover rural continuity without aiming at the positive bottom line on the short term (at least 3 years),” while other operators implement “their business plan on the tower, considering each tower to be profitable.” Maria argued that the latter model is not profitable within the rural areas of a country that has a low GDP.
In both scenarios, the issue of sustainability may arise, as these business models could either facilitate rural connectivity or hinder it, depending on the approach taken.
Omar also highlighted the technical challenge of providing power services in rural areas, noting the development of off-grid solutions aimed at addressing this issue, a sentiment echoed by Maria.
Maria affirmed that power is indeed key, and that “the big question we ask all the time about rural in Africa is ‘do we do something to have something?’” She noted significant advancements in many off-grid solutions currently, attributing them to the advancements in solar energy technology and the exploration of cross-sector deployment possibilities. “I still think energy is more important than telecoms,” Maria expressed.
Adding to the discussion, Dayn Amade, CEO of Tablet Comunitario, said, “Even if we have infrastructure and electricity in place, if we don’t have e-government service delivery, I think that the product will not be sustainable, and things may not work [or only for a short while].”
How the COVID-19 Pandemic Affected Rural Connectivity Progress in Africa
“COVID-19 showed that connectivity and infrastructure are needed for communities to interchange in many ways,” uttered Dayn. “Because we, at that stage, could not move from one place to another.”
From an infrastructure vendor POV, Omar pointed out that they have seen a “push of connectivity from operators.” Beyond this, the type of CapEx investment has changed, particularly when implementing RAN. “There are two decisions involved: investing in capacity or investing in coverage,” he continued.
Throughout the pandemic, there was significant investment in expanding capacity to provide services in areas that typically experience low traffic. This has positively “brought the importance of connectivity forward.” On the other hand, rural coverage projects were delayed. Hence, “from a mindset perspective, it has been positive, but in the actual implementation, there has been a slowdown.”
In reference to the shifting CapEx trend, Maria emphasized that "operators don't like CapEx anymore," leading to heightened efforts to engage in subcontracting with tower companies and NaaSCos (Network as a Service Companies).
Speaking from a governmental POV, John Omo, Secretary General, the African Telecommunications Union, asserted that there has been “quite a lot of positive changes [and] if not for COVID 19, we wouldn’t have seen them.”
These measures encompass spectrum allocation, which regulators have reserved for operators on an emergency basis to enhance connectivity. Starting in urban areas, “Morocco, as an example, is realizing that a student in Rabat will, at the end of the year, sit the same exam as the student in the rural areas.” As a result of this action, the turnaround time accelerated from six to nine months, providing connectivity to more schools in rural areas.
Nevertheless, John raised an urgent concern that “if it was possible during COVID-19, why don’t we consider connectivity as an emergency issue? Why is it that swathes of our rural areas still lack connectivity? Even though primary school kids in those locations sit the same exam as their urban counterparts that are enjoying these services, all due to the lack of access to infrastructure and terminals that can facilitate them to be online.”
He also addressed a concerning trend in the continent regarding the universal access to service funds, noting that they are often not utilized for improving connectivity, particularly in rural areas.
“Governments should come out into the open (because this is money contributed by the industry) and ensure the usage and governance of the funds (how it’s collected and applied) is as transparent as possible.”
Sustainable Solutions
Recognizing profitability as a challenge in the telco industry to offer connectivity, the latest innovations to improve the profitability of mobile network deployments were explored.
Addressing the topic, Omar Moya said that, over the years, there have been several developments when it comes to profitability in network deployments. He noted that the cost of the devices has been a major factor affecting the business model.
“The cost of the devices needs to be accessible to potential subscribers that have very low GDP per year. Some vendors are able to provide 4G devices between USD 30 to USD 40 to subscribers.” He also pointed out that the infrastructure building costs in the rural sites should be less than 25% compared to the building costs in urban sites. He further explained that off-grid energy solutions are bringing about “small, constant improvements to technologies that are bringing the business cases closer to the level that we want them to be.”
He said that the low cost of renewable solutions has made a huge impact in the total cost of ownership (TCO) in the long term. These developments have organically improved the business case for rural sites. He also pointed out that use of LEO satellite connectivity has greatly improved the throughput and capacity of the rural sites. He also stressed the importance of collaboration with towercos to enhance the connectivity and profitability in rural sites through various business models to reduce both CapEx and OpEx of the sites.
He further observed that various analysis and trial and error is still warranted in terms of profitability in the rural sites but the “risks operators are taking [to build rural connectivity] is reducing year after year. I think we are reaching a moment when all of these factors can make rural connectivity a reality in Africa.”
Adding to the discussion, Maria Gabriela Macra highlighted the crucial role played by development banks in improving rural connectivity, emphasizing that their initial funding support can aid OpEx. She also noted that to be profitable, telecoms have to be seen as an ecosystem and the possibility of connecting different sites to maintain uninterrupted flow of mobile traffic should be explored. “You don’t see telecoms anymore in the coverage of rural areas as a site problem, but rather as an ecosystem mobilization,” she opined.
Agreeing with Maria, Omar said that ecosystem mobilization was something that needed to be calculated in the business model completely. Oman reiterated that it's not just the subscribers within a specific area, but also the significant transit activity passing through that area that needs to be addressed.
Offering his thoughts on this, John Omo said that apart from the cost and the development of a mobile ecosystem, the challenge of a lack of integrated development planning by the governments in rural areas persists. He stressed the importance of infrastructure sharing between various utility sectors and telecom to “bring economies of scale and the unit cost down” when providing telecom connectivity in rural areas.
Dayn Amade said the deployment of essential digital services for communities with a small access fee could create some type of sustainability and attract developmental funds. He reasoned a revenue-generating sustainable solution would motivate the operators to set up more towers in the rural areas.
Stressing the importance of green solutions to achieve sustainability, Omar Moya said, the carbon footprint of a site is huge. He said rural sites are low-capacity sites and when they need an upgrade they may need to be replaced altogether. “Some of the equipment is not fully reusable. Nokia’s Rural Connect solution provides fully re-deployable sites with scalable equipment to upgrade to higher capacity. We are even considering re-deploying the towers without the need for concrete such as Nokia’s concrete-less masts. That way, we are extending the life of all solutions including the ones with heavier carbon solutions. By doing that, we are emphasizing the concept of a circular economy to make the business model more efficient,” he added.
Government Policies and Public/Private Collaborations
John Omo, Secretary General of the African Telecommunications Union, underscored the importance of cross-border collaboration in tackling rural connectivity challenges in Africa. Efforts to align policy and regulatory regimes across regions, despite diverse economic blocs, aim to facilitate investment and harmonize connectivity goals.
Omo highlighted the role of banks and financial institutions in supporting rural connectivity, emphasizing community networks as a successful initiative. Radio spectrum policies and partnerships among governments, civil society, private sectors, and communities are crucial. The World Bank estimates a trillion-dollar requirement, emphasizing integrated planning for effective policy implementation and investment facilitation.
According to Macra, there is a shift in the dynamics of public-private collaborations. Grants are now more intricately linked to social components, moving away from previous emphases on services such as e-health to encompass broader initiatives like e-government. The inclusion of sustainability considerations in loans and the establishment of data centers reflects an evolving mindset.
Omar Moya emphasized the challenging task of measuring social impact, indicating that education has emerged as a key factor for long-term development. Moya advocated for government support and emphasized the importance of prioritizing development and education in sustainable connectivity initiatives.
Dayn Amade, CEO of Tablet Comunitario, envisioned a business model intertwining commercial viability with social impact. He sees an opportunity to extend e-government service delivery, generating revenue to subsidize education and healthcare. Despite minimal grants, he believes in success through a well-crafted business model and a sustainable maintenance plan.
Moreover, as Maria's observations were echoed, Dayn Amade noted that unfortunately, there are minimal grants available for education and other essential services, as was the case five years ago. However, a belief persists that success can be achieved through a well-crafted business model. It is crucial to understand that a sustainable maintenance plan is often required by international organizations before funding is provided. Assurance is sought regarding the long-term viability of the project beyond their initial support.
John Omo wholeheartedly agreed with Dayn, recognizing the significant strides made in this area by ambitious individuals striving to innovate. Historically, innovation on this continent, particularly in the field of ICT, has been driven by trial and error from African pioneers. Early apps like M-PESA emerged about 20 years ago, with organizations simply experimenting to see if they would work. Fortunately, governments receptive to new ideas allowed these innovations to flourish without stringent regulatory frameworks. Consequently, the continent witnessed the emergence of bustling financial mobile money transfer services, addressing the real needs of populations underserved by traditional financial services.
Governments and international financial institutions increasingly acknowledge the vibrancy of this sector, recognizing the importance of fostering content creation that resonates with local populations. Many governments have established innovation hubs where tech enthusiasts receive support and funding to develop their skills and projects. However, there are still significant gaps, such as the inadequate protection of intellectual property rights and the exploitation of young talent. Despite the existence of innovation challenges and bootcamps supported by civil society and financial institutions, there remains a pressing need for more structured development strategies.
Encouragingly, positive trends are emerging, but there's still work that needs to be done to formalize and institutionalize the innovation ecosystem. Many young people in Africa are still navigating their way post-university without the support networks seen in other regions, where angel investors and venture capitalists are bountiful.
Positive Changes in Communities and Key Sectors
Looking at the long-term benefits of investing in rural connectivity and the positive changes brought about by improved connectivity, Dayn Amade emphasized the need for sustainable solutions in education. He highlighted the importance of a viable business model to attract international investment. He also argued that government policies should prioritize realistic, locally-adapted solutions over importing ideas from other regions.
John Omo underscored the significance of African ICT innovation, exemplified by successes like M-PESA, which thrived due to government backing and limited regulatory barriers. While recognizing persistent hurdles, Omo observed encouraging governmental backing for innovation hubs and tech funding. He highlighted the profound effect of initiatives like M-PESA on financial inclusion, especially in rural regions, where banking accessibility has surged. Moreover, he perceived the COVID-19 crisis as a catalyst for the widespread adoption of digital financial services, fueling inclusive economic expansion.
Maria Gabriela Macra shared success stories from Ghana, Benin, and Namibia, where local initiatives and comprehensive regulatory frameworks have led to significant improvements in infrastructure and connectivity. She stressed the importance of tailored solutions for smaller countries with limited resources.
Omar Moya discussed the broader socio-economic impact of these initiatives, noting increased data volume and economic activity in rural areas. He sees renewable energy deployment as a key driver of sustainable development and envisions a future where profitable businesses can thrive in underserved communities across Africa.
Poll Questions
The moderator concluded the session with three poll questions for the audience.
The first question explored whether improved rural connectivity in Africa could significantly contribute to economic development and community empowerment. 91% of attendees responded affirmatively, expressing belief in the positive impact of enhanced rural connectivity.
The second question focused on determining which technology holds the most promise for improving rural connectivity in Africa. Opinions varied, however, 52% of attendees believed that mobile networks are taking the lead, followed by satellite technology (voted by 33% of attendees) and other alternatives.
The third question addressed the primary challenges hindering effective rural connectivity in Africa. Responses were diverse, highlighting infrastructure limitations, affordability issues for local communities, and regulatory hurdles and policy challenges as significant obstacles. However, 48% of attendees believed that affordability issues formed part of the primary rural connectivity challenge, followed by infrastructure limitations (voted by 33% of attendees), and finally, 19% of attendees believe that regulatory hurdles and policy challenges are hindering rural connectivity in Africa.
In summary, the webinar delved into critical issues surrounding African rural connectivity, addressing the current state and challenges. It explored sustainable technological solutions aimed at bridging connectivity gaps and highlighted the significance of supportive government policies and successful public-private collaborations. Furthermore, the webinar showcased how enhanced connectivity drives positive changes in communities and key sectors, emphasizing the transformative impact it has on socio-economic development.
