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What will drive Africa’s digital economy

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What will drive Africa's digital economy
What will drive Africa’s digital economy.

Access to technology changes people’s lives, improves business and drives economic growth – that much is a fact of life. Universal access to internet connectivity is even being punted as a basic human right.

Huawei’s recently released GIV (Global Industry Vision) predicts that by 2025, the number of personal smart devices globally, will reach 40 billion and the total number of connections will reach 100 billion; creating a digital economy worth US$23 trillion.

Mobile broadband creates a better life for people, better business for organisations and better economy’s for countries. It allows us as a company to bring digital to everyone every home and every organisation for a fully connected intelligent world.

But even as advances in ICT propels the world into a new digital era, the vast majority of people across Africa are either not connected, or only have access to slow internet connections. Currently, less than five percent of households across the continent have access to a broadband connection, while eighty percent of those who are connected have to make do with bandwidth of less than 2Mbp/s. Only half of the population is covered by a mobile network.

Research shows a 90% correlation between ICT investment and socio-economic development in a country, and connectivity and digital services will play a major role in driving sustainable inclusive growth. Connectivity is not just about a voice service or faster internet but gaining access to a variety of cloud services that enables participation in the digital economy.

As with other developing markets, the African continent provides opportunities for business to take part in this economy through providing a variety of digital products and services to end-users, with estimated growth of around 40% over the next five years.

Growing demand for digital

This is especially apparent in an industry like banking, where infrastructure has been lacking. Shifting systems away from physical branches and onto people’s mobile devices has seen a huge improvement in access to banking, especially in East Africa. Expansion of these services to include insurance and other digital financial products show that Africa continues to play a leading role in this area.

Another example of what is doing well in the African market is music; with operators, vendors and ecosystem partners working together to drive new business value and taking advantage of the growing demand for local content, which is often not available through international music streaming or download services. Apart from satisfying the tastes of local fans and playing a part in cutting down piracy, homegrown services also help local artist’s monitise their music more easily.

Increasing digital literacy rates across the continent means that even more people will be looking to their mobile devices for access to affordable digital products and services, and there is already a gap between demand and supply.

Wireless Technology offers an opportunity for operators

Network operators face numerous challenges in their efforts to make connectivity more accessible. These include having to balance the high cost of deploying and maintaining fixed infrastructure with a lower average revenue per user, due to local geographic and economic conditions.

Wireless technology offers operators a cost-effective way to expand coverage and provide bandwidth of over 1Gbps, giving users the fibre-like experience needed for quality enterprise networks, video broadcasts, voice over IP (VoIP), gaming, and even 4K IPTV and virtual reality movies.

ITU statistics show that 148 countries around the globe have proposed national broadband strategies to enhance the broadband penetration rate and internet experience, and innovative wireless solutions are expected to be a key contributor to increasing broadband penetration and connecting ‘the next billion’.

Build on LTE to future-proof networks

Within developed markets, the race to launch 5G, the next generation network is on. Early 5G standards and technologies are now established and it’s expected we will see commercial 5G networks deployed widely by 2020. This adds to the impetus for African telcos to invest in their networks and create new business models today in preparation for a 5G Era.

While it will take some time to develop 5G networks, operators in Africa can act now, incubating new services and building new capabilities based on 4G networks. Expanding and evolving LTE and its derivatives, 4G+4.5G will pave the way to 5G. Operators can now deploy 5G commercial networks with LTE continuous evolution.

LTE is now defined as the fundamental network for all connected businesses. It is often referred to as LTE4ALL, with the capability to enable all types of services, including voice, data, video, Fixed-Wireless Access (FWA) as well as new IoT applications. This paves the way for operators to explore new business opportunities beyond consumer mobility, for example fuelling digitisation in homes and enterprises.

Innovation maximizes network value

Huawei, developed and deployed a series of business solutions to maximise our customers’ network value. Huawei’s CloudAIR 2.0 features new technology to dynamically increase spectrum sharing and support LTE and 5G New Radio (NR) on the same spectrum, enabling operators to monetise their spectrum assets and improve network ROI.

Huawei’s Three-Star innovative site solutions (PoleStar, RuralStar, TubeStar) facilitates the use of sites, enabling coverage and improving the return on investment. For radio equipment, technologies like Massive Multi-Input Multi-Output (Massive MIMO) are now being deployed globally on LTE network providing extraordinary experience and capacity layer necessary to open new business streams. These innovations are the bridging steps for 5G Era.

We are committed to working together with government and telecom operators in this market to drive digital transformation and move towards a 5G future. We aim to create an open, collaborative, win-win industry ecosystem to have in-depth conversations, discuss the latest trends and share opinions together.

By Dr Mohamed Madkour, Vice President of Huawei Global Wireless Network Marketing.

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