In Africa, wireline infrastructure gets a closer look

Africa ICTWhile it may never reach the levels of penetration that mobile communications has achieved on the continent of Africa, fixed line infrastructure is starting to play a larger role in communications services among countries like Nigeria that previously had few or no wireline networks in place. It's how wireline will play a role in telecom growth in sub-Saharan Africa that is unique--and may serve as a model for other developing regions.

Paul Bloom, CTO of IBM's telecommunications business, has a lot to be optimistic about with network development in Africa. The technology behemoth, which focuses on IT service and support internationally and already has a few branch offices established on the African continent, recently announced a partnership with Bharti Airtel to build out IT networks that will support the wireless carrier's operations in 16 African countries.

So, what does an IT provider have to do with fixed line access in a region that has little of either?

Africa wireless backbone"While there will be a need for mobile and wireless access, there still will be a need for a backbone infrastructure which will take some amount of investment," Bloom says.

The IBM-Bharti Airtel partnership is an illustrative example of the way fixed line communications--expensive to build, expensive to maintain--are being fit around the market realities of a nearly virgin communications territory. Wireless is the way to go in Africa: fewer regulations and a competitive environment mean mobile phones are more affordable and reliable for consumers than their countries' tightly regulated POTS. But as the market for wireless continues to expand, so does demand for better service, more applications, and access to next generation technologies.

"If you look at their infrastructure today from a wireline perspective, it's virtually nonexistent. You're looking where you have under two lines per 100 in the continent of Africa... From a wireless perspective, depending on how one counts, it's between 35 and 40 lines per 100 inhabitants," Bloom says.

IBM's role as Bharti Airtel establishes itself in the sub-Saharan market--the carrier purchased most of Zain's assets in the area earlier this year--is to establish IT operations centers in each of the 16 countries Bharti Airtel will serve, and connect them through a fixed-line network.

But closed-ring topologies are not the only fixed-line investment Africa will see. The establishment of the Main One submarine cable in July has connected Africa directly to Europe at 1.92 Tbps, and the pending extension of the cable system to South Africa opens many possibilities for expanding broadband access on the continent. Previously, providers needing to purchase bandwidth had only one option, the SAT-3 (South Atlantic Terminal) cable. Main One provides a wholesale alternative, and that will likely bring down the cost of bandwidth.

The improvement in wholesale capacity alongside the level of consumer demand has wireless carriers champing at the bit to either get into or expand their presence in the region. Bharti Airtel's move into Africa is perhaps the most high-profile, but other carriers--notably South Africa's Vodacom, majority-owned by Vodafone--are looking to acquire assets in sub-Saharan Africa as well. In fact, Vodacom reorganized specifically to compete directly with Bharti Airtel and MTN, according to a Bloomberg article.

Africa Innovation Centre"There is no legacy," Bloom explains. "The opportunity to create next generation systems is a real Greenfield environment. IBM and Bharti are going to be able to put new technology within this infrastructure that will add to American, European implementations around the mobile infrastructure."

Building the next generation from scratch

Africa's unique consumer needs and telecommunications environment has created an area ripe for developing applications that can't be adequately tested in more developed regions.

"We see what's going on in Africa in microfinance," says Bloom. "I think finance and telecommunications are the two industries that will be setting up the overall infrastructure for Africa."

As an example, Bloom points to Safaricom, which has introduced a product called M-PESA that enables users to conduct financial transactions via their mobile phones. "They're providing banking for the unbanked," he explains.

The popularity of the application could mean investment in more secure networks-both for the mobile provider and the financial institution involved.

Mobile transactions as they're conducted in Africa won't fly in more developed nations where there are generally tight regulations that won't enable carriers to conduct banking activities. But the application may still be reworked to meet requirements in places like the U.S. and Europe.

And infrastructure, no matter how much wireless dominates the landscape, still plays a key role in next generation buildouts.

"Over the past several years there have been some levels of instability and probably have not had as much investment in building that infrastructure. Looking around Africa you're seeing that there is more stability occurring, and I think you'll see outside investment coming in to help these countries build their infrastructure."

In Africa, wireline infrastructure gets a closer look