2Africa subsea cable branches out
The 2Africa subsea cable consortium, announced last year, already intends to add more branches to its planned 37,000 km cable, amid strong mobile growth in the region. But the cable’s benefits promise to stretch beyond the telcos and tech companies investing in the project. A recent study claims 2Africa could have a 26.2 to 36.4 billion USD (at PPP) impact on Africa’s GDP within two or three years of becoming operational.
20 Aug 2021
2Africa subsea cable branches out
The 2Africa subsea cable consortium, announced last year, already intends to add more branches to its planned 37,000 km cable, amid strong mobile growth in the region. The cable’s benefits promise to stretch beyond the telcos and tech companies investing in the project. A recent study by RTI claims 2Africa could have a 26.2 to 36.4 billion USD (at PPP) impact on Africa’s GDP within two or three years of becoming operational.
Announced in 2020, 2Africa has the ambition to be one of the world’s largest subsea cable projects and deliver more than the total combined capacity of all subsea cables serving Africa today. Due to go live in either 2023 or early 2024, 2Africa initially set out to interconnect Europe and the Middle East and then provide 21 landings in 16 countries in Africa.
Now China Mobile International, Facebook, MTN GlobalConnect, Orange, stc, Telecom Egypt, Vodafone and WIOCC, which are behind 2Africa, have said they will add four new branches to the cable. These will extend connectivity to the Seychelles, the Comoros Islands, and Angola, while also bringing a new landing to south-east Nigeria.
MTN, Orange and Vodafone are all reporting revenue growth in the region. MTN, for example, announced 19.7% year-on-year service revenue growth for the first half of 2021. Orange reported a 10.7% year-on-year increase in revenue growth from its Middle East and Africa operations in its Q2 results. Vodafone meanwhile announced 7.9% revenue growth for Vodacom.
Strong demand
Financial services have been a particular boon for Vodafone and MTN. Vodafone, which operates M-Pesa, reported year-on-year financial services revenue growth of 34% for the quarter ending 30 June 2021. MTN’s fintech revenue, which includes its mobile money service MoMO, grew 39.7% over the same period.
Demand for mobile connectivity in the region remains strong. In the first quarter of 2021, more than 20 percent of the global net additions were recorded in Africa, according to Ericsson’s June 2021 Global Mobility report, with 4G accounting for around 15 percent of subscriptions at the end of 2020.
“Driving factors behind the growth of mobile broadband subscriptions include a young, growing population with increasing digital skills and more affordable smartphones,” according to Ericsson’s report.
Access and affordability
Yet sizeable obstacles remain to would-be internet users. Africa as a whole still lags behind other regions when it comes to internet availability, affordability, and – by extension -- take-up according to recent ITU figures.
Announced in 2020, 2Africa has the ambition to be one of the world’s largest subsea cable projects and deliver more than the total combined capacity of all subsea cables serving Africa today. Due to go live in either 2023 or early 2024, 2Africa initially set out to interconnect Europe and the Middle East and then provide 21 landings in 16 countries in Africa.
Now China Mobile International, Facebook, MTN GlobalConnect, Orange, stc, Telecom Egypt, Vodafone and WIOCC, which are behind 2Africa, have said they will add four new branches to the cable. These will extend connectivity to the Seychelles, the Comoros Islands, and Angola, while also bringing a new landing to south-east Nigeria.
MTN, Orange and Vodafone are all reporting revenue growth in the region. MTN, for example, announced 19.7% year-on-year service revenue growth for the first half of 2021. Orange reported a 10.7% year-on-year increase in revenue growth from its Middle East and Africa operations in its Q2 results. Vodafone meanwhile announced 7.9% revenue growth for Vodacom.
Strong demand
Financial services have been a particular boon for Vodafone and MTN. Vodafone, which operates M-Pesa, reported year-on-year financial services revenue growth of 34% for the quarter ending 30 June 2021. MTN’s fintech revenue, which includes its mobile money service MoMO, grew 39.7% over the same period.
Demand for mobile connectivity in the region remains strong. In the first quarter of 2021, more than 20 percent of the global net additions were recorded in Africa, according to Ericsson’s June 2021 Global Mobility report, with 4G accounting for around 15 percent of subscriptions at the end of 2020.
“Driving factors behind the growth of mobile broadband subscriptions include a young, growing population with increasing digital skills and more affordable smartphones,” according to Ericsson’s report.
Access and affordability
Yet sizeable obstacles remain to would-be internet users. Africa as a whole still lags behind other regions when it comes to internet availability, affordability, and – by extension -- take-up according to recent ITU figures.
A mere 28% of households in urban areas of Africa had access to the Internet at home in 2019 and the figure plummets to 6.3% in rural areas, according to the ITU. This compares to global averages of 72% of households in urban areas and nearly 38% of rural areas.
Affordability also holds back adoption, according to the ITU. “Average prices for the mobile-voice basket and the mobile-data basket are very similar, across levels of development and regions, but due to the vast disparities in purchasing power, mobile telephony and Internet access remains too expensive for many in the developing world.”
Recent studies by the US research institute, RTI, conducted in conjunction with Facebook, however, show that earlier landings of subsea cables in African countries have had a positive impact on local economies. Some of the highlights of the study’s claims include:
Affordability also holds back adoption, according to the ITU. “Average prices for the mobile-voice basket and the mobile-data basket are very similar, across levels of development and regions, but due to the vast disparities in purchasing power, mobile telephony and Internet access remains too expensive for many in the developing world.”
Recent studies by the US research institute, RTI, conducted in conjunction with Facebook, however, show that earlier landings of subsea cables in African countries have had a positive impact on local economies. Some of the highlights of the study’s claims include:
- Democratic Republic of Congo: 8.2 percent increase in employment in fiber-connected areas and a 19 percent increase in GDP per capita nationally.
- Kenya: TEAMS landing in 2009 contributed to a 8.4 percent increase in skilled employment
- Mozambique: 13.6% increase in employment for urban university-educated people, especially in Maputo
- Nigeria: improved connectivity resulted in a 7.8 percent increase in employment in connected areas
