10 Sept 2012

Enterprise connectivity services revenue in Africa will increase at a CAGR of 12% from 2012 to 2017

Operators are investing in the access networks that will make connectivity services more ubiquitous and affordable.


The market for enterprise connectivity services in Africa will grow from USD8.2 billion in 2012 to USD14.6 billion in 2017 at a CAGR of 12% from 2012 to 2017, as enterprises start to use sophisticated applications that have greater capacity requirements and are latency sensitive. Operators are investing in their access networks that will make connectivity services more ubiquitous and affordable.

Spending on connectivity services in Africa will grow as fibre and mobile broadband become more available

Business users in Africa are constrained by a lack of bandwidth in the access network, and face high prices for a limited selection of connectivity services. Operators are just starting to deploy fibre in access networks and many locations continue to rely on expensive satellite connectivity. Operators are investing in HSPA+ and LTE to increase the capacity and capabilities of their mobile networks, which will also help drive growth in demand for connectivity services.

Figure 1: Revenue for enterprise connectivity services, Africa, 2012–2017 [Source: Analysys Mason, 2012]





Businesses in Africa are looking to take advantage of applications that will improve productivity and reduce costs

As elsewhere, businesses in Africa want to run applications that will help them become more productive, as well as reduce their operational costs, such as:

• office applications: including software specific to a particular industry such as reservations systems, and business process tools such as customer relationship management (CRM) and enterprise resource planning (ERP) systems

voice and messaging communications: including applications such as VoIP and unified communications (UC) systems that enable person-to-person communication

• collaboration applications: software that enables users to share information in real-time, or near real-time

• IT services: applications such as security, antivirus and email in a hosted or managed environment, either on-site or in a data centre access via the 'cloud'.

Access technologies vary in their capabilities and suitability for the applications that businesses need

While some applications require only minimum amounts of bandwidth, most require high capacity, and the most advanced are also sensitive to latency. All these factors influence businesses when deciding which access technology to use. In addition, IT managers also consider the availability, flexibility, reliability and redundancy of the technology.

• Fibre is often the best access technology, because it can be a dedicated connection, and offers higher capacity than other access technologies. However, fibre in access networks is rare in Africa.

• Fixed broadband (for example, xDSL and WiMAX) is more common than fibre in Africa, but is still generally only available in urban centres, and does not offer the capacities of fibre.

• Mobile broadband (CDMA, HSPA/HSPA+, LTE) has broader geographic coverage than both fibre and fixed broadband, and is beginning to catch up with fixed broadband in terms of capacity with the advent of 3G and HSPA.

• Satellite is widely available, and is good for areas where population density is low (that is, much of Africa). The major downsides are that it is expensive, and has high latency, which makes it unsuitable for videoconferencing and other real-time applications.


Source: Analysys Mason, 2012


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