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Challenges in the African Marketplace

Published
by
Steven V.
on February 23, 2010
in Emerging Markets
. 0 Comments

Telecom infrastructure and service providers in Africa are faced with unique, regional challenges. Unlike their more developed counterparts, East Africa and West Africa have numerous socioeconomic and geopolitical barriers that have undoubtedly affected the adoption of communication services.

Several months ago, East Africa had no cable capacity. While IP capacity and connectivity has since grown tremendously via the SEACOM build out, a 17,000 km cable system supporting 1.28 Tbps of capacity, the challenge of distributing the capacity, from the cable landing station to end-users, specifically those located outside of major cities, has emerged.

Along those lines, Africa is geographically distant from the rest of the world; therefore, making the cost to deploy capacity more expensive than North America or Europe for example.

Regulatory issues and government influence/control over the telecommunication market, also pose a challenge on the continent. In Kenya, for example, while the government is promoting connectivity and supporting the use of the Internet, efforts to make these services affordable and available to the masses have had little success.

Despite the global economic downturn, Africa remains one of the fastest growing telecommunications markets. As an emerging economy, Africa is increasingly becoming the focus of investors who see a huge potential in this market.

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