Home EMEAEMEA 2005 Bringing the future to Africa

Bringing the future to Africa

by david.nunes
Peter GbedemahIssue:EMEA 2005
Article no.:2
Topic:Bringing the future to Africa
Author:Peter Gbedemah
Title:co-Founder and CEO
Organisation:Gateway Communications
PDF size:48KB

About author

Peter Gbedemah is a co-Founder of Gateway Communications and its CEO. He is responsible for driving the company’s growth by developing a highly efficient pan-African network and delivering high quality communications services to GSM service providers, PTTs and enterprises throughout the continent. Mr Gbedemah has more than 20 years of experience within the communications and technology markets and a wide-ranging background in management, systems engineering and business development. He has worked extensively in Africa and has a broad knowledge of the regulatory, economic and business environment within the continent. Mr Gbedemah has held a number of senior executive positions with Citigroup, British Telecommunications, BT North America and NetSource Communications Inc. Peter Gbedemah holds a BSc (Hons) degree in Software Engineering from the University of Birmingham.

Article abstract

Traditionally, high charges, long implementation delays and poor service limited the growth of African communications services. New technologies, such as wireless and VoIP, are changing this, with ominous implications for Africa’s expensive, often unreliable, fixed line operators. Africa’s social and economic development has spurred demand for reliable, cost effective telecommunications. Pre-paid GSM phone packages, costing as little as US$5, make wireless telecommunications available to low-income Africans who now spend as much as two-thirds of their household earnings on communications.

Full Article

Because of the G8 summit, the eyes of the world are looking to Africa, seeking new ways of keeping dollars generated in Africa within Africa. One area in which this is already happening is the result of profound changes to the way people in Africa communicate by telephone, and this affects everything from the economic structure of the continent to the services provided by carriers and operators. Traditional African telecommunications are changing as next generation networks bridge the continent, leaving hardly a caller untouched. Calls within Africa that once looped through Europe now stay in Africa and the revenues go to the African carriers that deliver the calls locally instead of to carriers in London or Paris. This has had a real impact on the quality and affordability of calling within Africa. Connecting people with mobile and satellite is a basic prerequisite for Africa’s digital future, and direct interconnectivity, mobile-to-mobile, between networks is what ties it all together. Few individual companies have enough experts on the ground to observe all the changes that are taking place in Africa. It is the mobile-to-mobile carriers, those that carry most of the continent’s international traffic by interconnecting the more than 40 mobile networks in 30 countries, that have been best able to recognise and react to new trends in advance. New age in Africa With the introduction of next generation network (NGN) and voice over Internet protocol (VoIP) technology, the age of switching mobile telephone calls in the skies over Africa has arrived. Multi-million dollar investments were needed to build the infrastructure that controls the more than 350 satellite links to approximately 80 earth stations and drives the digital revolution forward by creating the largest mobile-to-mobile network in Africa. The experience gained from this vast interconnection of African mobile operators enables the carriers to predict the needs and demands of Africa’s future mobile phone users. Africa is leading the mobile revolution in many places, but quality is the most important aspect the whole telecom evolution that we are seeing. As voice quality increases, so too does the length of the calls and the number of value-added services, such as multi-media messaging, the caller uses. When the line does not work well, when the call quality is poor, consumers will not even consider using additional services. The network is the backbone of the next generation services offered by African operators. The planning of the last decade has pretty much been consigned to the dustbin as carriers and operators alike revise business models to accommodate the fast pace of change and new technologies. At the centre of the planning is the network infrastructure and equipment to carry the new services. Industry leaders know that when the network is not up to speed, revenue is lost. As technologies forge ahead, there is a very real danger that, without resilient networks with huge capacity at their disposal, the ability to offer new services remains at the planning stage. Given the advanced technologies available, the future is here and now. Phone users in Africa now demand more from their operators. They want to be able to access the same services and the same quality, as in Europe or North America. VoIP industry The booming VoIP industry sees the need for quality. Africa has embraced VoIP as a cost-effective and reliable means to communicate not just internationally, or on a pan-African basis, but locally within each country as well. Traditionally, pan-African landline services have been the preserve of a relatively affluent, chosen minority because of high usage charges, long service implementation delays and poor service. Consumers, and specialists alike, now see VoIP as the way to bring communications services to most of Africa. For fixed line operators in Africa, whose expensive and unreliable services struggle to compete against VoIP networks, the implications of the shift to VoIP are ominous. VoIP has brought telecommunications to thousands of people who have never had access to telecommunications. Africa is alive with fast moving people and businesses. It is undergoing significant economic development and social change brought about by greater freedom of movement. As a result, there is growing demand for wireless telephone services, for reliable and cost effective telecommunications. Landline penetration is currently under 1.5 per cent and incumbent telecom monopolies across the continent have been slow to react to changes in the African business climate. VoIP service providers can react more rapidly to market conditions because of their efficient telecommunications infrastructure. These service providers are playing a key role in building Africa’s ability to take part in the global information society, the digital age. Fixed line The development of fixed line communications is still constrained by a number of factors including the speed of deregulation within the African continent. Although governments are liberalising the telecom sector, market demand for more efficient, cost effective VoIP services often overtakes government plans. The use of mobile phones in Africa reflects this: mobile usage dramatically exceeds that of fixed line devices. The perceived value of mobile phones, even by the low-income population, is such that Africans spend a significantly higher portion of their household earnings on communications than in the developed world. Studies indicate that low-income Africans spend as much as two-thirds of household income on communications. Recent statistics show there are some 36 million African mobile phone users, a figure that is growing at a rate of 135 per cent a year. VoIP and GSM have gained market share as fixed line operators have lost control of their relationships with their users. VoIP is successful because it has the right blend of technology, relationships and expertise to deliver. We best see this in developing regions where telecommunications services have never been able to penetrate before. As the growth of GSM wireless networks and other new technologies continue in these developing regions, people are beginning to act, to participate, globally, while working and thinking in an African context. International carriers are now actively seeking to use local skills and empower communities rather than taking a superficial approach to the needs of the market. The success and meteoric rise in the year-on-year growth in African mobile communications is largely due to the local approach to their business, with an intrinsically African strategy, that operators have taken. Cost of calls The falling cost of calls, driven by VoIP, is fundamental for African business users. Until now, the high cost of calling throughout Africa (fixed-line operators do not maintain direct bilateral relationships) has kept trade within each country’s boundaries. Deregulation and private partnership agreements have sparked a massive fall in the cost of African country-to-country calls and spurred investment in technology including VoIP. Consequently, micro-enterprises and large corporations can both trade effectively without substantial investment in communications equipment. In the last year, there has been an upsurge in wireless usage both for business and for residential users who just want to talk with friends and relatives. Today, low cost phone packages make it possible for entire low-income households, perhaps with neighbours, to pool their resources and share a phone. With pre-paid GSM phone packages costing as little as US$5, telecommunications are now available in low-income regions of Africa where previously phones were a luxury. WAP enabled handsets in the early ‘90s provided the first value-added service breakthrough. Today, interactive games, music messaging and video streaming are coming online. Downloadable or streamed updates of cricket, rugby, soccer, motor racing or golf are available as premium services, allowing phone users to catch the latest scores, game highlights, team profiles and replays of key moments. Streaming services send music videos, movie clips or broadcasting of live concerts, while audio options gives phone users access to songs or live radio through their phones. Mobiles are richer and more involved then ever before, so platforms have to be more flexible and powerful to support new services as they come online. Africa is like the rest of the world: people there love to talk. Phones are emotionally charged, very personal possessions. They make a statement about who the owner is. They let people make statements about themselves by personalising their ring tones and the displays they put on their screens.

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