User:Benk1342/Information and communications infrastructure in Africa

The information and communications infrastructure in Africa is both technologically and geographically inconsistent. While aggregate growth across the continent has been strong in the mobile telephone sector, the Africa Infrastructure Country Diagnostic (AICD) found that some countries and regions have seen more growth than others. Meanwhile, there has been very little progress in landline deployment, and the AICD found that broadband growth is facing regulatory and infrastructure challenges. According to the AICD, Africa can improve its information-and-communication-technology sector by improving competition, liberalizing the regulatory framework, reforming state-owned  incumbent carriers, ensuring low-cost international access, promoting Internet backbone infrastructure development, and promoting universal access.

Mobile telephone service
Between 2000 and 2007, market penetration of mobile-telephone service in Africa grew from 10 million to more than 180 million customers. Competitive private-sector firms have driven this growth, spending more than $20 billion between 1992 and 2005 and extending coverage to more than 62 percent of the population by 2006, and as of 2010, 91 percent of the urban population is covered. There are several multinational operators in Africa, which allow their customers to move between countries while staying on-network, reducing problems associated with high-priced international roaming that plague other parts of the world. The competitive landscape and widespread availability of pre-paid service, which the AICD found to be used by 97 percent of mobile users in Sub-Saharan Africa, has kept prices affordable for even low-income households. Operators benefit from pre-paid users because of reduced credit risks, and have further courted low-income customers by offering favorable pricing options such as discounted in-network calls, caller ID to facilitate callbacks, discounted or free off-peak calls, and systems to transfer credit between subscribers.

But penetration has been inconsistent between nations, as some make it easier than others for additional operators to enter the market and increase competition. While some African nations have hampered competition by imposing regulatory barriers to entry, such as exclusivity clauses in existing mobile operators' licenses, others have catalyzed the private sector's expansion of mobile phone service by liberalizing their regulatory controls on the market. The AICD found that low-income African countries with competitive mobile-telephone markets have 31 percent higher penetration, 6 percent lower prices, and 39 percent lower international-call prices than those that have not liberalized. According to the AICD, while moving from a monopoly to a duopoly has a relatively small impact on the market, penetration accelerates rapidly as countries issue their fourth mobile licenses.

Mobile prices in Africa remain relatively high compared to other parts of the world. The AICD found that in 2007, a representative basket of pre-paid mobile services cost six times as much in Africa as in South Asia. And while prices have been falling over time, they are not falling as fast as in other regions—the average price of mobile telephone service fell 82 percent in South Asia between 2000 and 2005, while it declined only 49 percent over the same period in Africa. According to the AICD, telecommunications access in Africa would be "significantly higher" if the continent could achieve price parity with South Asia.

Landlines
The landline sector has not tracked the mobile sector's growth. Unlike the mobile sector, the AICD found that landline subscriber growth in Africa has slowed each year since 2003, with some countries, such as South Africa, experiencing decline. A marked difference between the mobile and landline sectors is that the landline market in Sub-Saharan Africa remains largely in the hands of state-owned or formerly state-owned incumbents, while the mobile sector has moved to competitive private firms. According to the AICD, poorly performing incumbents "create[] hidden costs for the economy, through suboptimal allocations of resources to the sector and low consumption of telecommunications services."

Nigeria illustrates the effect that a competitive landline market can have; since introducing competition among landline operators, it has added 750,000 subscribers, bucking the trend on the rest of the continent. Given Nigera's success, the AICD found it to be "striking" that more countries had not privatized their landline industries. Only seven other countries in Africa had introduced landline competition by the end of 2006, while only 15 had introduced some level of privatization by selling shares of the state-owned incumbent. The total value of privatizations between 1993 and 2006 was $3.5 billion, but the privatization of South Africa's Telkom accounted for half of this value. Some nations' attempts at privatization failed; according to the AICD, investors in some countries have withdrawn and the operator has been renationalized. But the AICD found that Rwanda and Ghana showed a "sustained commitment to reform" by reselling the businesses after their first attempts at privatization failed.

Broadband
Africa's broadband Internet-access market has also not developed as successfully as the mobile-telephone market. The AICD found that the slow growth is due largely to a lack of Internet backbone infrastructure and capacity, as well as to low levels of computer use among the population. Like the mobile market, the AICD found that sluggish growth of backbone infrastructure in some nations is due in part to a lack of regulatory liberalization; countries that have liberalized development have seen more rapid growth. Nigeria, for example, has four major operators developing fiber-optic networks in and between the major cities. But according to the AICD, extension to less densely populated rural areas will likely require public support.

International connectivity
A lack of international connectivity has kept both voice and broadband prices high in Africa. The AICD found that countries that are connected to an international submarine cable have lower prices not only for overseas telephone calls, but for international calls within Sub-Saharan Africa, dial-up Internet access, and broadband Internet access as well. The AICD also found that competition among international gateways further reduced prices. As of 2008, 67 percent of African countries had no access to a submarine cable, and paid an average of $1.34 per minute for international calls within the continent, $0.86 per minute for calls to the United States, $67.95 per month for 20 hours of dial-up Internet access, and $282.97 per month for ADSL broadband access. The 16 percent of countries with access to multiple competitive international gateways, on the other hand, paid only an average of $0.48 per minute for international calls within the continent, $0.23 per minute for calls to the United States, $36.62 per month for 20 hours of dial-up access, and $98.49 per month for ADSL. According to the AICD, therefore, both access to submarine cables and competition are necessary for Africans to benefit from lower prices and better service in telecommunications.