Africa: Seasons Greetings From Balancing Act - 2020? It's Almost Over... Let It Go

18 December 2020

London — Dear readers, viewers, contributors and advertisers

Everything seemed to start so well... The year began with planned Spring trips to events in Dublin and Cape Town to look at data centres and cloud sevices. As Covid-19 slowly revealed itself around the world, I started by thinking it would all still happen. My Wife and I had a short break in Paris and left on the day the virus spiked for the first time. Of course, both events I'd booked were cancelled and we all segued into one of life's stranger years.

It has ended on a slightly more optimistic note with the roll-out of vaccines but it's unclear when these will reach Africa and in what volume. But this allows us all to think about what a recovery might look like.

The Impact of Covid-19 speeds up tech adoption

The most obvious impact was the speed that everyone - both inside the ICT business and outside - started using online communications platforms. Whether it was the most obvious one - Zoom - or any of the others, people who would have said in the past "it's company policy not to use Skype' were now talking online like there was no tomorrow. There's something oddly different about seeing everyone in their 'casuals' hiding in one of their children's bedrooms to get some peace.

As I wrote in April, never let a good crisis go to waste. And as Tayo Oviosu, CEO, Paga tweeted at the time:" Mom just called me. Her @DStvNg is out of credit. @mypaga to the rescue...easy peasy. Two clicks and she is back on..." But this home use of mobile money is also coming about from changes imposed by the lockdowns in different countries. I asked Oviosu by tweet whether use was growing and he responded:" Use of our self-use channels, yes. Agent Network is affected."

A number of the new start-up delivery providers (like Uber and Twiga Foods) started offering fresh and cooked food and medicines delivered to the door. How much of changed behavior actually happened and whether it will stick after the recovery deserves a detailed study.

While stuck at home, people have been using music streaming and VoD services like never before. As the crisis started, Vodacom reported in its March 2020 results that its VideoPlay service - which is now being rolled out across a wider set of its opcos - has 883,000 subscribers, who had made 3.5 million purchases. That's an average of 4 purchases per subscriber. Also moderating an IIC webinar on the crisis in West Africa in November, panel members reported that Nigerian MNOs were reporting excellent results.

Data Centre and Cloud Landscape

2020 was definitely the year that "the cloud" seemed to go from being the same old conference hype I've been hearing over the last 5 years to something slightly more real. The year has seen major investments being made in data centres. Also some of the data centre pioneers have been in business for nearly a decade and have demonstrated that it's possible to provide a level of service that compares with anything globally.

Covid-19 has turned that vague future Bring-Your-Own-Device strategy on companies' roadmaps into something more immediate: how do connect all your employees as quickly as possible? I spoke to a slice of African broadcasters and a large number of them are working out how to use cloud for their production teams. That would not even have been a conversation twelve months ago. To download the report we did for PCCW Global for free:

So when will IoT turn from conference hype to reality? In October we reported on a Kenyan start-up that Liquid Telecom is working to help fish farmers become more productive with IoT to test water temperature. I look forward to more things like this being successful...

Major infrastructure improvements

International cables are still being built to Africa. Who can believe that after SAT3 there were people who were saying that Africa would only need one more international cable down the east coast of the continent? In May, the cable that Facebook has a share in - 2Africa - announced its plans, providing connections in 16 African countries.

Where it can, it will interconnect those using it via carrier neutral data centres or open landing stations at a pre-determined cost. The combination of this cable and Google's Equiano can only really continue to contribute to the lowering of wholesale prices. Also specifically, maybe it will lead to a lowering of wholesale prices in some of the remaining higher price countries.

Three other cables are also adding to overall capacity: Dare 1, Ella Link and the cable Etisalat is building between its opcos on the west and central seaboards of the continent.

Satellite is finally beginning to get out from under fibre's shadow. This week AST SpaceMobile, in partnership with Vodafone Group, unveiled plans to launch the first phase of its space-based commercial mobile communications service in 2023. The company has secured the necessary funding to take the venture to this next stage, which will cover the 49 largest countries in the equatorial regions.

AST SpaceMobile will be the first service of its kind to connect standard mobile phones at 4G and 5G speeds using AST SpaceMobile's patented space-based network. Today, more than five billion mobile subscribers constantly move in and out of wireless coverage, and AST SpaceMobile's solution will fill these coverage gaps to enable people to stay connected whilst on the move.

Wider digital transformation

However, whilst those of us in the industry find infrastructure fascinating, there's a world out there of companies that are wanting to do things with what it delivers. The industry used to talk about corporates who were the high-end customers prepared to pay 'top dollar' for capacity and reliability. Increasingly the discussion is about 'industry verticals' and delivering services to them that are something more than just bandwidth.

Nigerian start-up Kobo360 provides an online platform through which companies can manage their logistics and drivers can become more professional, obtaining insurance, etc. At the beginning of the month, it launched an innovation programme with the IFC to pilot sustainable cooling solutions to cut food losses in the supply chain. Digital transformation creates the equivalent of an online nervous system that allows these kinds of changes to happen.

In a set of survey results I published at the beginning of the year covering students at teacher training colleges in Senegal, the majority had smartphones and were daily internet users. As the person who carried the survey said:" "With the help of the telecoms ecosystem and e-publishers, teachers' digital life can propel a country forward through impacting education in positive ways. Collectively teachers may have more capacity to do this than the Ministries of Education they work for." Also as potential telco customers, "teachers represent the largest stable group of wage earners and their numbers will grow as the population continues to increase."

If all that's too serious for you, Muska, an online music streaming service launched its service in June this year in DRC.

In a long overdue move, Vodacom reduced its 30 day data bundles by 40% and data volumes went up by 20%, creating enough new revenues to see continuing growth. It talks about (price) elasticity shaping recovery. It would be great to hear more MNOs singing from this particular song-sheet. And voice revenues are static or declining, particularly in DRC and Lesotho. Also 30% of its revenues now come from m-Pesa

Mobile money coming of age

There has been a bewildering range of organizations offering mobile money services. VC funds have loved Fintech and have encouraged a flowering of different organization in many of the main markets. But this year felt like the start of these organizations coming together to become a financial infrastructure that will have a long-term impact on the continent.

To take a couple of examples, MFS Africa bought Beyonic and merged their international and local capabilities. In mid October Stripe bought Nigeria's Paystack for over US$200 million so that it can expand across the continent.

Low cost connectivity providers get a boost

In September I spoke to AMN who have the funding to up their portfolio of remote location base stations to 5,000 that it sells to MNOs on a revenue share basis. In March Jim Forster and Ben Matranga announced the revolving loan fund Connectivity Capital, investing in the "poor sisters" of the communications world, ISPs. Three things attracted them to do this: falling hardware costs, falling CAPEX costs and the falling costs of backhaul. They have been looking at a mixture of companies, some building terrestrial networks and others fixed wireless networks. Others like South Africa's TooMuchWifi (one of Connectivity Capital's investments) have thrived during the pandemic and continues to grow.

More open networks with OpenRAN

Another big development has been the shift from proprietary network hardware bought from the 'usual suspects' to another way of provisioning using OpenRAN. Africa needs lower CAPEX to happen because cheaper data prices and wider rural roll-out relies on cutting costs. Early results from OpenRAN roll-outs look encouraging we look forward to seeing more in 2021.

People - Comings and Goings

As I was writing this e-letter I was really sad to hear of the deaths of two people who have contributed a great deal to the development of the industry. Kai Wulff died in a plane crash in Texas and Manny Texeira died of cancer: both will be missed. Rob Shuter left MTN in March 2021 and it was announced this month that Strive Masiywa has joined the Board of Netflix.

And while on people, my assistant Alice Saywood has completed her training and has now gone off to be a psychotherapist.

This year we have carried out many different research and consultancy projects - both large and small - for a range of clients including operators, equipment vendors, investors and policy bodies. Because we operate discreetly, you may not be aware that we offer these services. If you think you have needs or requirements of this kind, talk to us about them. In what will be a year of great change, we will have both data and ideas to help you change your circumstances. Just email me on:

News Update will return in the New Year with issue 1044 on 22 January 2020.

All the best

Russell Southwood


Balancing Act

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