By Christoph Fitih
Africa is taking a giant leap of ‘faith’ when it comes to mobile telecom. The region, where over 50% of the population still has no access to mobile phones, has suddenly seen a flurry of activities among telecom players to launch 5G services.
The service providers have started to conduct trials for the 5G technology, which enables many futuristic use cases, including remote surgery, autonomous driving, Artificial Intelligence, Augmented Reality and Virtual Reality.
Recently, Vodacom -- the African arm of Vodafone – announced the launch of Africa’s first commercial 5G network in Lesotho, a tiny landlocked country in southern Africa. The 5G rollout, though, is limited with the services being provided initially to only two corporate entities.
Vodacom has a temporary license for 5G testing in Africa, while MTN has tied up with Ericsson and ZTE for the launch of services in Africa. Though they have not made much headway beyond public demonstration, 5G seems to be the new area of competition among telecom operators in the continent.
Gaping Digital Divide
One piece of fact, though, should not get lost in the entire buzz around the launch of a commercial 5G services in Africa. And the point is that Africa continues to remain an under-penetrated telecom market, and the majority of its ‘connected’ population still uses the basic services.
This is true for Nigeria as well. The Nigerian telecom industry contributed 9.8% to the country’s Gross Domestic Product in 2016. At the end of 2017, the country boasted of 136.49 million mobile subscribers. It is also one of the fastest growing telecom markets in Africa. Even so, nearly 30% of the population is still to experience connectivity. The telecom industry has contributed immensely to Nigeria’s economy and has had huge impact on the lives of the country’s citizens. A case in point is the growing usage of mobile banks, which has made it easier for people to access banking services anytime and from anywhere. This is not different from the rest of Africa.
Look at the figures for yourself. Africa continues to be the region with the largest number of unconnected in the world. Globally 3.4 billion people are without internet access, and 830 million out of these live in Africa. Similarly, 660 million people in Africa out of 870 million globally, are without a mobile connection. Nearly 70% of the African population does not have access to mobile broadband.
Nigeria, like Africa, still remains largely a 2G market with over 50% mobile subscribers using 2G network. At the same time, the gradual shift towards better network technology is happening fast. According to GSMA’s recent report on Mobile Economy 2017: Sub-Saharan Africa, 3G will remain the dominant mobile broadband technology for the foreseeable future, but the 4G adoption is rising rapidly following increasing network rollout.
However, 5G making a meaningful contribution still remains a pie in the sky. The latest Ericsson Mobility Report shows that the Middle East and Africa would be one of the regions with the least -- less than 5% of the continents entire population -- subscriptions for 5G by 2023.
It is, therefore, not hard to see that the telecom companies are unsure whether they should invest in connecting the unconnected or start preparing the networks for 5G. This is not an easy decision considering the low ARPU and low adoption of the smartphone in the region. The market is not yet mature for 4G or 5G, but the service providers would want to secure their investments for future technologies as well.
The Virtualization Push
Virtualization can help the telecom sector tide over the dilemma – whether to concentrate on strengthening the basic infrastructure to address the digital divide or to focus on the roll-out of 5G.
Traditional telecom networks require several high-cost and often bulky equipment to deploy and operate. These types of equipment need large spaces to store, have a short life cycle and consume energy. Besides, hardware-based networks are difficult to upgrade. By shifting networks to virtual systems, telecom operators can overcome all these problems.
Telecom companies in Africa can, therefore, achieve multiple goals by shifting their 2G networks to virtualized networks.
Unlike the legacy 2G, the virtualized 2G is easy to deploy, maintain and upgrade to newer technologies. This means that the telcos will be able to address the current demands of their subscribers and can easily and quickly move to any new technology, be it 3G, 4G or 5G. Essentially it leads of network simplification by virtualizing different technology network functionalities on one platform. Since the platform is software-based, the upgradation itself is easy and doesn’t even require a visit from site engineer.
The installation and maintenance of Virtualized 2G is automated, which makes it easy to deploy and also brings down the capital and operational expenditure for the service providers. It makes the network agile, flexible and easy to scale. The service providers will be able to expand quickly and also launch newer services faster. Virtualized 2G reduced the expenditure at every stage, from deployment, maintenance, and upgradation. With Virtualized 2G the network is future ready even as you cost effectively meet the current requirements of your subscribers.
Lower cost, easy deployment, and easy upgradation allow operators to keep building 2G low-cost capacities in areas untouched by telecom network, while at the same time continuing to allocate resources and time in expanding their 4G LTE and 5G networks.
Reliable and affordable broadband is crucial for the growth of the region’s economy. It leads to a more inclusive society, enhanced collaboration and opens up a plethora of global opportunities for the local businesses. Besides it encourages entrepreneurship and leads to generation of more and newer jobs. Nigerian economy stands to gain enormously if the service providers leverage virtualized 2G to push for expansion of connectivity in all regions and segment of the country.
Christoph Fitih is Director Sales – Africa, Parallel Wireless
