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Southern African Broadband Market Analysis

  • October 2013
  • -
  • Frost & Sullivan
  • -
  • 92 pages

Competition will Diversify the Broadband Market

This study provides an overview of the broadband market in Southern Africa, with a specific focus on the Mozambican and Namibian markets. The research service analyses the current market dynamics in terms of broadband subscribers and the respective revenues. Total market metrics, forecast trends, competition, and supply chain analyses are provides for both Namibia and Mozambique. The key trend highlighted in each country is intense competition, along with rapid changes in the market as a result of new entrants in Mozambique and the high level of infrastructure investments in Namibia. Strategic recommendations and conclusions have also been highlighted.

Executive Summary

• In 2012, the market for broadband was relatively small in Mozambique, with X subscribers, and in Namibia with X subscribers.
• In Mozambique, an estimated X% of broadband connections were through mobile services, while in Namibia this figure was X%.
• The competition in both countries is intense, with approximately X to X market participants in both countries.
• In Mozambique, the entrance of a third mobile operator has increased communication reach to regions where connectivity was previously unavailable.
• In Namibia, the saturation of both fixed- and mobile-voice business is shifting market participants’ focus toward data services which is becoming a high stream of revenue.
• Higher revenue growth rates are expected in Mozambique with an estimated compound annual growth rate (CAGR) of X% compared to X% for Namibia.
• Both Mozambique and Namibia are experiencing an increase in demand for data services, which is driven by customers demand for converged services between voice and data. In addition, the trend for mobility is escalating, which will involve access to mobile, data, and voice services at high speeds anytime, anywhere.
• Major broadband users in both countries are consumers, businesses—such as small and medium enterprises (SME), large companies, and multinationals—as well as government.

CEO’s Perspective

1. Namibia and Mozambique present opportunities for broadband market growth, given broadband’s low penetration rates.
2. In Namibia, the broadband market is becoming the new stream of revenue due to the market saturation of voice business.
3. Smartphones and other handsets are driving demand for broadband in both countries.
4. Limited fixed-line infrastructure development is driving demand for mobile voice which will lead to an increase in mobile broadband.
5. Namibia and Mozambique are experiencing fierce competition within the broadband market.

Market Overview—Research Scope

Geographic Scope
This research service focuses on the Namibian and Mozambican broadband communications markets.

Service Scope
The focus of this research service will be on broadband service providers (SPs), which are segmented into the following:
• Fixed-line Operators
• Mobile Operators
• Cable TV Operators
• Other Internet Service Providers (ISPs)

Technology Scope
This research service outlines the range of broadband technologies currently deployed and planned in these markets. Technologies include fibre, satellite, WiMax, Wi-Fi, 3G, ADSL, and CDMA.

Market Overview—Definitions

Broadband: For the purposes of this research, broadband is defined as follows:
• Telecommunication in which high-speed Internet connection is available, enabling data transmission with a wide band of frequencies capable of achieving data download transfer rates of up to X kilobytes per second (kbps).
• Mozambique’s bandwidth is megabytes per second (Mbps) and Namibian broadband can range from Xkbps to X kbps.
• There are different kinds of broadband services available: fixed-line broadband, wireless broadband, and mobile Internet.

Fixed-line Broadband
• Fixed-line Internet services are offered through fixed-line infrastructure, which is mainly characterised by copper or fibre optic cables. These may be installed underground or on telephone poles.
• In Mozambique, Internet provided via cable TV is also included in the analysis.

Wireless Broadband
• Wireless Internet is supplied through the use of wireless technology, such as WiMAX and Wi-Fi. Satellite technology is also included in this type of service.

Mobile Internet
• Mobile Internet refers to accessing the Internet using a lightweight, handheld device, such as a mobile IP, a personal digital assistant (PDA), a smartphone, or a mobile TV, which require neither a desktop computer nor a fixed landline connection. Services on mobile Internet can include capabilities that do not exist on the traditional Internet, such as SMS text messaging.

Broadband Service Providers
• For the purpose of this research service, broadband SPs are defined as all the providers currently present in the market. These include the fixed- and mobile-telephone operators, as well as pure Internet service providers (ISPs).

Internet Services
• Internet services refer to Internet access through various technologies, such as dial-up, digital subscriber line (DSL), asymmetric DSL, satellite or very small aperture terminals (VSATs), wireless, leased lines, integrated services for digital networks (ISDN), and mobile Internet access technologies such as general packet radio service (GPRS), EDGE, and 3G/HSDPA.
• Internet services incorporate any Internet-related services including Web hosting, Website design, and domain name registration and hosting.
• Internet services also include applications, such as browsers, email accounts, and personal Websites that allow customers to perform their Internet-based activities.

Internet Service Provider (ISP)
• These are also referred to as Internet access providers (IAPs).
• ISP/IAP refers to any company or business that offers access to the Internet and any other related services at a fee.

General ISPs
• These are companies specialising in being the intermediary between the Internet and an end user. The companies can make use of wireless and fixed-line services to offer Internet connectivity to an end user.

Fixed-line ISPs
• The companies that use their infrastructure for data transmission and thus, Internet access, are known as fixed-line ISPs.

Mobile ISPs
• These are ISPs that offer mobile access solutions that allow users to make use of the Internet.

Power Utility Companies
• They have extra capacity in their cabling and can utilise this to transmit data.

Internet Penetration Rate
• The Internet penetration rate can be used as an indicator of the following:
oLevel of access to Internet services in the country
oLevel of Internet awareness of the country
oPotential for the Internet market in the country

Peering
• Peering is the voluntary interconnection of administratively distinct Internet networks for the purpose of exchanging traffic between the customers of each network.

Internet Exchange Point
• This is the infrastructure that allows multiple carriers (ISP networks) to interconnect across a single port. Traffic is exchanged at no cost through the mutual peering agreements signed between the ISPs.

ISP Infrastructure Equipment
• This is the physical hardware, transmission media, and software that are used to connect users and computers to the Internet. This includes Internet servers, Web servers, Internet storage, networking equipment, and the software required to operate the infrastructure as well as other devices that control the transmission of information.
• Transmission media includes telephone, satellites, and cellular networks.

Subscriber
• The subscriber is the data services user. It is the person or the enterprise that adheres to the various types of services provided by the ISP.
• A subscriber can be pre-paid or post-paid.

Key Questions This Study Will Answer

Is the market growing, how long will it continue to grow, and at what rate?
Are the existing competitors structured correctly to meet customer needs?
Is this an industry or a market? Will these companies/products/services continue to exist or will they get acquired by other companies? Will the products/services become features in other markets?
How will the structure of the market change with time? Is it ripe for acquisitions?
Are the products/services offered today meeting customer needs or is there additional development needed?
Are the vendors in the space ready to go it alone, or do they need partnerships to take their business to the next level?

Table Of Contents

Southern African Broadband Market Analysis
Table Of Contents

1. Executive Summary
2. Market Overview
3. Total Broadband Market
o External Challenges: Drivers and Restraints
o Forecast and Trends
o Market Share and Competitive Analysis
4. CEO's 360 Degree Perspective
5. Mozambique Breakdown
6. Namibia Breakdown
7. The Last Word
8. Appendix

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