The African Telecom Challenge

Global companies extending their networks into Africa will find it a challenge to establish easy telecom links in comparison to the better established systems in the U.S., Europe or Asia. While mobile phone use is growing rapidly across the continent, fixed-line density is low and Internet access is limited.

Standards of communication technologies vary widely by country. Prosperous tourism destinations such as Mauritius and Madagascar are able to easily cater to visitors' communications needs. In contrast, some countries in the continent's interior are unable to communicate effectively between capital cities and remote towns.

State of the Continent

While the Internet has grown at an exponential pace around the world becoming an essential part of many businesses' operations, Africa's development has lagged.

Nearly 16 percent of the world's estimated 6.5 billion people use the Internet, according to Internet World Stats. A comparison with other continents offers striking differences.

Asia has not only the world's highest population but also the highest amount of Internet users, 56 percent from a total of 3.4 billion people. At the other end of the scale is Africa, which contributes only 2.3 percent of the world's Internet users.

In addition, while nearly 70 percent of North Americans use the Internet, about 2.66 percent surf the web in Africa.

Development

At a recent high-profile conference aimed at finding ways to accelerate Africa's global competitiveness, several African heads of state, joined prominent figures such as former U.S. President Bill Clinton and Microsoft Chairman Bill Gates.

The conference concluded with various initiatives for improving health, education, social and business development.

One initiative resulting from the meetings was the collaboration between Microsoft and South Africa's telecommunications group Mobile Telephone Networks (MTN), to provide affordable Internet connection services in Africa.

The program is meant to provide consumers with flexible payment options, including monthly Internet contracts and pay-as-you-go PC purchases.

Mobile phone subscribers in Africa, while only 3 percent of the world's total, have quickly surpassed the number of fixed-line telephone users. In five years, from 1997 to 2002, the number of cell phone users in Africa grew by 1,600 percent.

Recognizing the need for infrastructure development, the European Commission this week announced it will contribute US$1.25 billion annually over the next six years to various initiatives.

In addition to transport, energy and water projects, funds will also be allocated for IT networks with the goal of improving trade and communication.

The funds will only be a small portion of the continent's needs, however. Africa currently needs to invest $11 billion per year to reach its tele-density targets, according to Research and Markets. It is expected that private industry will need to fund the majority of those requirements.