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FTTH/FTTBMarketDevelopmentUpdateSub-SaharanAfrica9October2018
JuanitaClarkChiefExecuIve+27(0)824181441www.Qthcouncilafrica.com
pg2 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
Sub-SaharanAfricahasseendramaIcgrowthininternaIonalbandwidthsince2009.
CableSystem Descrip1on
ACEextension • 2ndphaseoftheACEcabletoSouthAfrica.• FivemajoroperatorsmakeuptheconsorIum.• 12.5Tbpscablereadyforservicedateis2019?
Africa-1 • PlannedfordeploymentalongEastAfricacoast.• The40Tbpscablereadyforservicedateislate
2017.Smallchanceofmaterializing.
LiquidSea • BuiltbyLiquidTelecomat30-40Tbps,alongEastAfricacoast.
• Cableislateduetofinancialconstraints.
SouthAtlanIc(SACS)
• Firstsoutherntrans-AtlanIccablefromAngolatoBrazil;40Tbpsdesigncapacity.
• ExpectedreadyforservicedateisQ42018.
PEACE • SA,Kenya,DjibouI,SomaliaandPakistan.• ExpectedreadyforservicedateisQ42019.• Designcapacityis60Tbps,basedon200GDWDM
technology.
Mercury • Vodafone-lediniIaIve• CableonEastAfricacoasttoCapeTown(SA),with
alinktoMauriIus.
SAEx1&2 • SAtoUSAviaBrazil;SAtoSingaporeandIndia.• Readyforservicein2021.
Plannedaddi1onalcables(notexhaus1ve)
pg3 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
FTTxpenetraIoninAfricaremainslowbutisgrowing;soareotherbroadbandtechnologies.
0.4%5.9%
8.9%
40.0%
78.5%
0%
20%
40%
60%
80%
100%
FTTHHHPenetraIon FixedBBHHPenetraIon
PSTNHHPenetraIon MobileBBPop.PenetraIon
MobilePop.PenetraIon
Household&PopulaIonPenetraIonIndicators(mid-2018)
• PSTN(tradiIonalcoppervoice&DSL)connecIvityindeclineparIallyreplacedbyfixedwirelessaccess(FWA)andalsofibre.
• FibrepenetraIonissIllverylowanddrivenmainlybyafewcountries.
• MobilepopulaIonpenetraIonmostlybasedon3G,althoughthisisnotalwayshighqualitybroadband.4GpenetraIonneedstoexpand.
FTTHinfrastructure• 96commercialnetworksoperaIonal• 6networksplanned• SAhasthelargestnumberofFNOs
Mobilebroadband
• 145commercial4GnetworksoperaIonal• 334Gnetworksplanned• 5Gbeginningtobepiloted(SAonlyfornow)
Africainmid-2018
pg4 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
pg5 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
pg6 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
pg7 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
FixedbroadbandhouseholdpenetraIonremainsverylowinAfrica.Isthisthefutureopportunity?
7.89.2
10.813.7 14.4
16.1
0
5
10
15
20
2012 2013 2014 2015 2016 Q22018
MillionsFixedBroadbandGrowthinAfrica
5.9%
37.2% 41.4% 44.2% 49.7%
81.2%88.9%
0%
20%
40%
60%
80%
100%
Africa Mid.East LatAm AsiaPac E.Europe W.EuropeN.America
FixedBroadbandHouseholdPenetraIon
107146
212295
375
515
0
100
200
300
400
500
600
2012 2013 2014 2015 2016 Q22018
MillionsMobileBroadbandGrowthinAfrica
40.0% 31.9%
85.0%
27.8%37.7%
130.5%
0%
20%
40%
60%
80%
100%
120%
140%
Africa SSA N.Africa Nigeria Kenya SouthAfrica
MobileBroadbandPopulaIonPenetraIon
pg8 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
FTTHissIllasmallercomponentoffixedbroadbandbutisgainingmomentuminsomemarkets.
20.0 28.0 34.5 42.0 46.1 70.0102.3
258.0
340.0
0
100
200
300
400Thousands
TopFTTHMarketsinAfrica
0.2% 0.5% 0.6% 0.8% 0.9% 1.1% 2.1%15.7%
72.5%
0%
20%
40%
60%
80%
FTTHHouseholdPenetraIon
3.0% 4.2%15.2% 16.5% 21.0%
25.3% 26.3%42.3%
83.2%
0%
20%
40%
60%
80%
100%
%FTTHofTotalFixedBroadband
Observa1ons
• SouthAfrica has the largest connected FTTH base butMauriIus is closesecondduetoitsFTTHdeploymentstrategy.
• HouseholdpenetraIonofFTTHremainslowontheAfricanmainland.
• 33 markets (countries and territories) in Africa have commercial FTTHnetworks(FNOs).
• NewFTTHnetworkdeploymentisplannedinfourmarkets.
pg9 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
FTTHconnecIvityratewillconInuetoimproveasfocusturnstoconnecInghomes(frombuild).
38151
350
773
1,006
0
200
400
600
800
1,000
1,200
2014 2015 2016 2017 Q22018
SouthAfrica–HomesPassed(‘000)
6.8 15.963.8
214.0
318.6
0
50
100
150
200
250
300
350
2014 2015 2016 2017 Q22018
SA–FTTHHomesConnected(‘000)
9.523.5
65.2
94.9
138.5
0
50
100
150
2014 2015 2016 2017 Q22018
SA–BusinessUnitsConnected(‘000)
Consistsof:• Besteffortbroadband(FTTB)• MetroEthernetlinkswithQoS
17.9%
10.5%
18.2%
27.7%31.7%
0%
10%
20%
30%
40%
2014 2015 2016 2017 Q22018
SA–FTTH(Home)ConnecIvityRate
Infrastructurebuildgainedmomentum
pg10 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
Sub-SaharanAfricahasseendramaIcgrowthininternaIonalbandwidthsince2009.
Mauri1us• Ranked8thintheworld• 75%householdpenetraIonrateasatAugust2018
• DroveFTTxasabroadbandstrategy
SouthAfrica• LargestmarketinAfricaintermsofhomespassedandconnected
• Butonly2.1%householdpenetraIonrate.
• ConnecIvityrateonFTTHat32%
Asianmarketsdominate
pg11 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal
Challenges&opportuni1es
• Cost of FTTH/B deployment – still around USD 1 500 to
connect a house (depending on technology /
infrastructure used)
• Aerial can be one-third of the cost of trenched fibre
• Socio-economic development level in many markets in
Africa (incl. disposable income levels)
• Bureaucratic red tape – wayleaves (also fibre cuts)
• Quick reduction in retail connectivity prices in some
markets – question of sustainability
• Fractured fibre access infrastructure provider
environment
• Need for ongoing investment
• Demand for data continues to grow at incredible speeds
• Lack of legacy fixed infrastructure in many markets
• This can also be a challenge, e.g., lack of ducts which
can be reused or lack of fixed line product
• Growing middle class migration to gated communities /
complexes
• Ability to deliver product to lower middle class once the
first wave of FTTH is past its peak – likely lower prices of
deployment (construction)
• Fractured fibre infrastructure provider environment –
M&A opportunity
• Need for ongoing investment to push fibre deeper into
networks
• New models: B & T
Opportuni1esChallenges
End