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FTTH / FTTB Market Development Update Sub-Saharan Africa 9 October 2018 Juanita Clark Chief ExecuIve +27 (0) 82 418 1441 www.Qthcouncilafrica.com

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Page 1: FTTH / FTTB Market Development Update Sub-Saharan Africa 9 ... · FTTH / FTTB Market Development Update Sub-Saharan Africa 9 October 2018 Juanita Clark Chief Execuve +27 (0) 82 418

FTTH/FTTBMarketDevelopmentUpdateSub-SaharanAfrica9October2018

JuanitaClarkChiefExecuIve+27(0)824181441www.Qthcouncilafrica.com

Page 2: FTTH / FTTB Market Development Update Sub-Saharan Africa 9 ... · FTTH / FTTB Market Development Update Sub-Saharan Africa 9 October 2018 Juanita Clark Chief Execuve +27 (0) 82 418

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)

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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

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pg4 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal

Page 5: FTTH / FTTB Market Development Update Sub-Saharan Africa 9 ... · FTTH / FTTB Market Development Update Sub-Saharan Africa 9 October 2018 Juanita Clark Chief Execuve +27 (0) 82 418

pg5 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal

Page 6: FTTH / FTTB Market Development Update Sub-Saharan Africa 9 ... · FTTH / FTTB Market Development Update Sub-Saharan Africa 9 October 2018 Juanita Clark Chief Execuve +27 (0) 82 418

pg6 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal

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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

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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.

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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

Page 10: FTTH / FTTB Market Development Update Sub-Saharan Africa 9 ... · FTTH / FTTB Market Development Update Sub-Saharan Africa 9 October 2018 Juanita Clark Chief Execuve +27 (0) 82 418

pg10 SSAFTTH/FTTBMarketDevelopmentUpdate,September2018,©AfricaAnalysis,ConfidenIal

Sub-SaharanAfricahasseendramaIcgrowthininternaIonalbandwidthsince2009.

Mauri1us•  Ranked8thintheworld•  75%householdpenetraIonrateasatAugust2018

•  DroveFTTxasabroadbandstrategy

SouthAfrica•  LargestmarketinAfricaintermsofhomespassedandconnected

•  Butonly2.1%householdpenetraIonrate.

•  ConnecIvityrateonFTTHat32%

Asianmarketsdominate

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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

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End