African Network Operators Find Strategies to Fight High Cost of Internet Bandwidth

By Charlie Baker, director of product management, PeerApp

A walk through the AfricaCom exhibit hall is testament to the speed with which Africa is becoming a connected continent. Product vendors and operators alike show the rapid rollouts of fibre, 3G and 4G mobile broadband, and satellite services. 

However, the most challenging and costly component of Internet access in Africa is not “in” Africa at all.  It is the cost of bandwidth connections (known as “transit”) that connect African network providers to major content sources in Europe, North America and Asia.  Transit prices vary considerably by country and region, but within Africa it’s not uncommon for an operator to pay in excess of US $100 per megabit per second (Mbps) per month for this connection. To put this in a global context, operators in the U.S. and UK typically pay less than US $2 per Mbps, according to TeleGeography, a telecoms research firm. 

Source: TeleGeography and PeerApp estimates, 2013

High transit pricing puts operators in a difficult position; they must charge prohibitively high access tariffs, or limit bandwidth to subscribers, or some combination of the two.

Operators have found PeerApp’s UltraBand transparent cache to be an effective solution to substantially reduce Internet transit costs while actually improving service quality for their subscribers.  UltraBand resides within the operator’s network. It identifies, stores, and delivers the most popular Internet content (for example, YouTube videos or software updates) being downloaded and viewed by subscribers. In this way, the content is delivered at the speed of the operator’s network without using valuable transit, rather than retrieving it each and every time from a distant content source.

PeerApp’s UltraBand is the leading transparent caching solution globally with a growing number of deployments in Africa, including MTN Group, Telma and dozens of small and large operators across the continent.  It’s no surprise that UltraBand has been selected a finalist in the “Best Cost Efficiency Initiative for Africa” award category.

To learn more about PeerApp and the UltraBand transparent caching platform, visit us at AfricaCom Stand A2.

Register for a free exhibition pass here

Clickatell Offers Greater Mobility to Nigeria’s Unbanked

 

Guaranty Trust (GT) Bank, one of Nigeria’s foremost financial institutions has partnered with Clickatell to offer virtual airtime top up (VTU) – a value-added service that taps into the country’s drive for a cash-less society.

Africa is Largely Unbanked

The unbanked population in Nigeria is high, with an estimated 79% of people without access to financial services.  Reducing these numbers is a huge challenge for the Central Bank of Nigeria (CBN).

According to Kofi Annan, former United Nations Secretary-General,

“The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector.”

The unavailability of banking services is believed to be one of the major factors preventing the poor from exiting the cycle of poverty, as it forces them to manage their finances on a cash-only basis and restricts their access to equitable sources of credit. This makes them particularly vulnerable to loan sharks, increasing their descent into financial despair.

Nigeria is Embracing a Cash-Less Society

High on Nigeria’s financial inclusion agenda is the move towards a cash-less society, because according to the CBN, the cost of cash and associated risk of a cash-driven economy to Nigeria’s financial system is high and increasing. This cash-less policy is designed to promote:

·         Financial intermediation, financial inclusion

·         Minimise revenue leakages

·         Create internally generated revenue and reduce incidences of robbery

Despite the high unbanked population, the popularity of mobile feature phones is increasing at a considerable rate, with pre-paid services the order of the day.

Nigerian Mobile Phone Users Latest Stats:

·         Nigeria's active mobile subscriptions are over 100million

·         Up to six in every 10 Nigerians are unaware that they have the ability to manage their mobile telecommunications account via their bank account

GT Bank and Clickatell are Revolutionising Banking with VTU

Leading the way is GT Bank, who through Clickatell, now offers VTU via their Mobile Money, Mobile Banking and Internet Banking services. Pre-paid Airtime is a cornerstone of any mobile solution and is seen as a critical success factor to mobile banking and mobile money’s success in Nigeria.  VTU is a convenient service for clients wishing to purchase airtime anytime, day or night, for themselves or others.  VTU also attracts all promotional discounts offered by the Mobile Networks to the consumers. In the next exciting phase of the partnership, GT Bank, in collaboration with Clickatell, will offer an even broader array of VTU prepaid products including Pre-paid data, Pre-paid fixed lines and Pre-paid BlackBerry bundles. To see GT Banks’s current offering click here

By offering GT Bank customers access to VTU, Clickatell operates as the bridge between the bank and the consumer  enabling  them to access banking services in a virtual space that is secure and easily accessible anywhere, anytime. This is particularly vital in a country where the threat of robbery is incredibly high near ATMs and bank branches.

Samson Isa – Director of Clickatell West Africa says, “I think VTU will be a great mobile prepaid product distribution technology that will revolutionise the telecoms distribution space because of its ease of usage, security and availability.”

Isa continues, “GT Bank’s approach is revolutionary in the Nigerian market, as they utilise user-friendly apps to drive mobile banking. I think they should be commended for driving this forward-looking technology, and making a success of it.”

 Clickatell are proud sponsors of AfricaCom 2013. Come and meet them by registering for your free ticket to AfricaCom Here

RAD Data Communications: Partnering with African Carriers to Roll Out High Speed Ethernet Services and Transition Their Legacy Networks to NGNs

Two related, if not complementary trends characterize African telecoms today.

The first is the rapid deployment of fiber infrastructure. With the linking of Africa’s coastal, urban and commercial hubs to the undersea fiber cables, carriers are taking advantage of all that new fiber to roll out advanced Metro Ethernet networks, over which they can offer their enterprise customers the latest SLA-assured Ethernet services. Furthermore, fiber connectivity is now reaching much further into the interior, encouraged by government sponsored initiatives to bring modern communications solutions to larger segments of the population.

The second trend is legacy service migration. In most cases this means moving up from slower speeds to high-speed DSL copper circuits as well as fiber, and supporting both TDM and newer Ethernet services. However, in this use case, the transport layer is still based on SDH and solutions must be found to hand the traffic off to Ethernet and SDH backbones.

Innovative Broadband Solutions Reduce CapEx and OpEx
The African market has one of the world’s highest operator-to-subscriber ratios. Fierce competition forces carriers to meet intense cost pressures and adjust their business models to fit the profile of their potential customers. As they shift their focus from building their market presence to improving profitability, the carriers’ need for innovative broadband access solutions that enable significant CapEx and OpEx savings is greater than ever.

 “RAD is uniquely positioned to partner with African carriers because its Service Assured Access solutions, which we will premier at Africa Com, uniquely address this need,” states Noam Dor, RAD Sales Director for Africa.

Designed for providers of business services, as well as for wholesale providers, mobile operators and cloud access providers, Service Assured Access features a comprehensive service lifecycle toolkit that can be implemented in a variety of deployment mode scenarios over various bearer circuits: fiber, DSL and PDH. Service Assured Access significantly increases carrier revenue while lowering all aspects of operational costs in the access network.

Multiple Deployment Scenarios to Maximize Flexibility

Service Assured Access can do this because it is easily adapted to different deployment scenarios. “Network build outs typically take place at a varied pace,” Dor explains.” Carriers can implement RAD’s Service Assured Access solution to fit their specific rollout plans, existing infrastructure, migration plans, and CapEx/OpEx objectives,” he adds. “In this way, they can build a complete Carrier Ethernet access network, including smart demarcation and Ethernet service pre-aggregation, or just a part of the network to facilitate, for example, inter-carrier ENNI handoff, even when the edge or aggregation layer is provided by another vendor,” he adds. “In addition, they can use RAD’s MiNID Carrier Ethernet NID on an SFP sleeve to easily upgrade their existing Ethernet switches and normalize their network to Carrier Ethernet.”

Choose a Migration Path that Best Suits Your Needs
“RAD lowers total cost of ownership by streamlining implementation and better utilizing existing infrastructure,” Dor concludes. “Service Assured Access extends the operator’s planning horizons and lets them choose the migration path that best suits their needs by upgrading network elements as needed, avoiding forced investments in complete overhauls.”

African Carriers that have already implemented RAD’s Service Assured Access solution include Camtel, which uses RAD’s Carrier Ethernet Demarcation Devices to facilitate the delivery of business services in Cameroon’s major cities, and Main One in Nigeria, which has implemented nationwide Carrier Ethernet services.

RAD’s Global Presence

RAD’s installed base exceeds 12,000,000 units and encompasses more than 150 carriers and operators in 165 around the world, including 50 in Africa.

With a presence in Africa that dates back over two decades, RAD’s products have been deployed by virtually all of the continent’s major carriers, service providers and mobile operators, as well as the private sector, banks, oil exploration and petroleum companies, public power and water utilities, transportation systems, universities, and governmental and military networks.

RAD Data Communications is a member of the $1.2 billion RAD Group of companies, a world leader in networking and internetworking product solutions.

RAD Contact:

Ilan Seidner, Director of Marketing Communications

Tel: +972-3-6458107

Fax: +972-3-6498250

E-mail: ilan_s@rad.com

 Visit RAD Data Communications at AfricaCom 2013. Come and meet them at stand F07 by registering for your free ticket to AfricaCom Here

Leigh Smith, MD of World Telecoms Lab talks VoIP to the Africa Com team…

Leigh Smith
MD of WTL

We caught up with Leigh Smith ahead of the AfricaCom Conference and Exhibition, taking place at the CTICC in Cape Town, South Africa 12-14 November to find out a bit more 2^nd generation VoIP, his experiences and focus at the event.

AfricaCom:  What is WTL up to in Africa?

As fibre continues to creep inland, many African start-ups are starting to use VoIP over leased fibre lines to offer voice connectivity.

We are not discussing VoIP as in the consumer technology of Skype, Viber etc whereby an app is downloaded.   Rather the use of a VoIP by carriers and service providers for their customers’ long-distance voice calls made in the traditional fashion with customers having their own dedicated traditional phone number.

Carriers in Africa have been slow to adopt VoIP technology in this way because they have had concerns about reliability, QoS and costs.

It’s true that the technology to interconnect a VoIP link onto a terrestrial network has been expensive. (Also many of the incumbent voice operators have a justifiable fear of the effects of VoIP on their voice revenues.  A distrust and negative attitude which has unfortunately affected VoIP adoption in parts of Africa which have most to gain from its adoption.)

The switches used for transferring VoIP traffic onto a terrestrial network were adapted from traditional voice switches by the large vendors – Ericsson, ZTE, Huawei etc - and consequently are huge, expensive and require a lot of maintenance which of course affects the bottom line.  Moreover they do not use the optimum compression techniques for VoIP.

WTL (World Telecom Labs) specializes in VoIP.  We recognized that there was a huge market in Africa for a smaller more cost-effective switch…

AfricaCom:  Tell me more about the WTL VoIP offering and its benefits to operators in Africa

Our suite of 2^nd generation VoIP switch -  HyperPVx - have been designed from the ground up to enable operators in Africa to cost-effectively set-up and manage a VoIP network. 

The research to develop them was part funded by the European Space Agency and the product is now patented by the US Patent Office.

In a nutshell, our 2^nd generation VoIP switches - HyperPVx - save operators significant amounts of money in terms of CAPEX - which of course is initial purchase and set-up  - as well as OPEX by increasing capacity, freeing up capacity in congested networks and enabling operators to cost-effectively add new capacity.

Since launching eight months ago WTL’s 2^nd generation switches are now being used by 20 operators in 14 countries across Africa.  Unfortunately most of them don’t want to be publicly named because of an (understandable but frustrating for us!) unwillingness to tell competitors about how great our switches are!

Also many also prefer to hide the fact that they are using cost-efficient compressed VoIP as this can still carry an unjustified stigma of low quality from inferior non-WTL solutions.

Our customers at the moment are the early adopters; the most innovative players who have already seen the benefits of VoIP and rolled out services using it.

AfricaCom: Do you have any specific customers you can tell us about?

Xplorium Inc. is a carriers’ carrier specializing in long distance, backhaul of international traffic for mobile operators in Africa & Middle East.

It has deployed the HyperPVx on its link from the Ivory Coast to Paris. The result was an immediate reduction in the long distance bandwidth required between the two locations. The new WTL-based solution needed only 30% of the capacity used by standard VoIP and this translated straight into big monthly Opex savings. The network quickly ran at the planned capacity of 480 simultaneous calls with high audio quality even though each call used less than 7K bps (standard VoIP calls of similar quality will often use more than 30K bps).

Karim Charif, Technical Director, Xplorium Inc. says  "WTL is an innovative company which has really considered the needs of operators using VoIP. Its switches have been specifically designed to reduce the costs of deploying and maintaining a VoIP network, whilst maintaining the quality of the voice calls.

We have been able to significantly reduce our costs both in terms of CAPEX, OPEX and indeed by being able to increase capacity through WTL's specialist compression techniques".

AfricaCom: How is VoIP changing the market and why is it important for WTL to be a leader in the field? 

VoIP is a classic disruptive technology for service providers because it enables new entrants to enter with lower cost, innovative services. The new players are able to deploy smaller more efficient, more flexible 2^nd generation VoIP switching. So, existing operators need to review their networks and installed equipment to avoid being caught flat footed by these rivals

AfricaCom: What strategies are you putting in place to help operators maximise revenues from VoIP services?

We are pushing a number of strategies for OpEx reduction.

a)    our patented NOP which reduces the amount of long-distance IP bandwidth required to run a VoIP service.

b)    Our 2^nd generation VoIP switches are a more integrated product than others on the market meaning we reduce the amount of different equipment needed therefore decreasing support bills, rack space, power and so on. For example, with WTL, the SoftSwitch, SBC, Signalling Gateway and Media Gateway Controller (MGC) can all be delivered as a single small device.

AfricaCom: What are your expectations from taking part in AfricaCom this year?

This is the 5th time that WTL has attended the show.  We have been around for 15 years specializing in VoIP systems since the earliest days of this technology but have maintained a low profile with sales coming through customer recommendations.

We are a niche vendor – at the moment – and are successful because our products are innovative and solve cost and efficiency problems for our customers.

We would be happy to meet with any operators who have already rolled out VoIP networks and are looking for additional efficiencies – and those who are considering what role VoIP could and should play within their businesses.

Please visit www.wtl.be for more information, email sales@wtl.be to book an appointment at the show or come to our stand, P74a. 

 Visit World Telecoms Lab at AfricaCom 2013. Come and meet them at stand P74a by registering for your free ticket to AfricaCom Here