Tech majors scramble for Africa's internet market
Tech giants are lining up billions of shillings to pump into Africa with eyes on the millions of people expected to join the over the coming years.
Africa’s internet market is up for a major scramble as global tech corporations rush to invest hundreds of billions of shillings, in the hunt for millions of Africans expected to join the online community over the next decade.
Last week, global internet giants Google and Facebook laid down their infrastructure investment strategies in plans that will see hundreds of billions poured into the continent in the coming years.
As Google said it will be investing about Sh110 billion ($1 billion) in Africa over the next five years, Facebook was revealing the different technologies it has created to ensure that it reaches all corners of the continent, through its Inside the Lab programme targeting to get a billion extra users on its platforms.
The pair has spent billions to create subsea cables connecting up to three continents, investments that are targeted to boost connectivity in Africa by at least three times internet quality compared to current levels, cut down prices and subsidise prices for devices used to access the web.
“We are building the longest subsea cable in the world using new technology that will help triple the amount of bandwith reaching the entire continent of Africa. We’ve even designed floating power stations that sit in the middle of the ocean, harnessing the power of the sun and the waves, delivering it to the cables in the ocean, allowing us to boost their capacity.
And we built a system that delivers internet speed for homes and businesses over the air, bypassing the need for cables altogether (Terragraph). It’s an amazing solution to the last mile connectivity problem, which is often the hardest to solve,” said Facebook’s Vice President in charge of Connectivity, Mr Dan Rabinovitsj.
Heavy expenses
Efforts by the pair are all in a bid to attract hundreds of millions of Africans that research has projected will be joining the internet over the next decade.
“Africa today is the most challenged continent globally from a connectivity perspective but I am very encouraged by the amount of investment and what is transpiring. We have always viewed that there is not a single solution for connectivity and these three areas will make considerable difference,” Facebook’s Vice President in charge of network, Mr Kevin Salvadori, told Smart Business last week.
Explaining the reason why the social media giant chose to invest in three different types of connectivity boosting modes, Mr Salvadori said the company expects that over the next decade, the total level of traffic people in Africa consume on the internet will probably increase 100 times.
Considering the heavy expenses to get connectivity such as fibre to homes in the continent, the company has spent about five years innovating on technology that would effectively spread the internet across Africa.
Facebook says there is a direct tie between connectivity investment and socio-economic success for the continent, projecting that the impact of investment in 2Africa subsea cable will be an increase of between Sh250 billion and Sh400 billion on Africa’s Gross Domestic Product besides increasing employment through support on businesses and boosting education and health.
“We understand that our platforms support billions of people and millions of businesses to make their businesses be productive and for individuals to connect to the things that matter to them,” Mr Salvadori said.
Facebook which Whatsapp and Instagram- is running a programme called Inside the Lab, whose target is to innovate in order to penetrate the untapped markets. It says its new technologies could lead to one of the single largest drops in the cost of fibre deployment and internet costs ever and has started discussions on piloting of the projects.
Small businesses
And as Facebook makes the inroads, Google was also announcing the different strategies it has laid down, most of which involve tapping into the potential of small businesses, with the $1 billion investment by 2026.
“Customers in our part of the world earn on a daily basis between a dollar and three dollars and only 20 per cent have access to 4G enabled devices. So we partnered with Google on a programme that reduced the devices to $35 (around Sh3,800) but that was still too expensive.
So we came up with Lipa Mdogo Mdogo which is paid little by little. Customers pay Sh500 and then 20US Cents (about Sh22) on a daily basis off their M-Pesa. It’s been very successful, the cost of data reduced by 22 per cent, the demand for 4G devices has increased by 40 per cent,” said Safaricom CEO Peter Ndegwa.
Google and Alphabet CEO Sundra Pichai noted that “These investments will support the continent’s digital transformation in enabling affordable access and building products for every African user, helping businesses with their digital transformation, investing in entrepreneurs to spur next generation technologies and supporting non-profits working to improve lives across Africa.”
