May 8, 2022
The Next Wave provides a futuristic analysis of BizTech and innovation in Africa. Subscribe here to get it directly in your inbox on Sundays at 3 PM (WAT).

Globally, sub-Saharan Africa remains the most underserved region in terms of internet infrastructure. Internet penetration on the continent is 40%, excluding more than half of the continent’s population. With approximately 700 million of the world’s 3.7 billion unconnected people living in Africa, the United Nations’ International Telecommunications Union (ITU) estimates that providing internet access for everyone on the continent will cost nearly $97 billion in investments. And it would be worth it. Increasing internet penetration to 75% has the potential to create 44 million jobs. Depending on how well developed connectivity is, Africa’s internet economy can grow from the $115 billion it was in 2020 to $180 billion in 2025, and, subsequently, $712 billion by 2050.

Africa’s booming young population is constantly trying to tap into the digital economy, but they are hindered by slow and expensive internet. With the continent’s tech industry gaining global attention, it has become imperative to solve this problem.

Source: Boluwatife Sanwo, TechCabal Insights.

Big Tech to the rescue

Google has developed multiple projects to solve Africa’s internet problem. Back in 2019, it conceptualised the Equiano cable, a subsea cable to boost internet access in Africa. The cable landed in both Togo and Nigeria this year and is expected to add $351 million in economic output, create 36, 870 jobs in Togo; add $10 billion of GDP, and create 1.8 million jobs in Nigeria.

But, beyond these promises, Africa’s connectivity issues are complex and will not all be solved by just the Equiano cable.

Solving Africa’s connectivity problem involves expanding mobile broadband to those in the coverage gap while connecting those in the usage gap to the internet. According to GSMA, as of 2020, sub-Saharan Africa has a 19% coverage gap, that is, the percentage of people living in areas not covered by a mobile broadband network. This figure is 3 times the global average of 6%. Africa is expected to make progress on this end with the steady rollout of 3G, 4G, and 5G networks.

Source: Boluwatife Sanwo, TechCabal Insights.

But there is a snag. Africa’s usage gap is 53%, meaning half a billion people living in areas with mobile broadband networks are not connected to mobile internet for various reasons including affordability. With the coverage gap reducing, while the usage gap is not improving, anyone interested in solving Africa’s connectivity problem should focus on closing the usage gap and increasing internet usage. Solving the coverage and usage gap requires investing in first, middle, and last-mile internet service, until the internet gets to individual Africans who need it.

After initiating the Equiano cable, Google has also invested in delivering last-mile internet services in Africa. In 2020, it launched the Loon Project in Kenya, which died because the rural population couldn’t afford 4G-compatible phones. That same year, it launched Project Taara, which provides high-speed internet over long distances using beams of light. Taara has since been rolled out in Kenya and across the Congo River.

The latest Big Tech solution to Africa’s internet problem is Elon Musk’s Starlink service, a satellite internet provider, but it has been met with multiple setbacks. Its launch in Nigeria was moved from 2021 to mid-2022, and from 2022 to 2023 in South Africa. Today, none of Starlink’s 500,000 terminals are in Africa, despite Starlink’s rapid expansion.

Partner Message

Europe’s biggest start-up and tech event is back! Viva Technology brings together start-ups, CEOs, investors, global tech actors, and well pronounced speakers. It will take place on June 15-18, in Paris. Find out more.

Benefits of getting Africans online

Despite Starlink using satellite technology that makes it able to reach the remotest of areas and landlocked African countries that can’t be accessed by subsea cables, it is still expensive for Africans. Subscribers have to pay an initial fee of $499 to get equipment—a satellite dish, tripod, power cable and router—and then a $99 subscription connection fee. It’s unlikely that a Nigerian subscriber, living in a rural area, whose minimum wage is $73 or ₦30,000, will be able to use Starlink’s services when it eventually reaches the continent. For more context, following Google Loon’s failure, Google partnered with Orange to launch Sanza, an ultra-low-cost 4G smartphone which costs $30 as an alternative to high-end smartphones that are above the economic reach of many African users.

If Elon Musk takes into consideration the economic realities of his home continent and is serious about solving African problems, it is likely that Starlink’s services will be subsidised for Africans.

Whether the interventions come from SpaceX (Starlink’s parent company), Facebook or Google, getting more Africans online should be a priority. With an expected population boom that will see a quarter of the world living in Africa by 2050, Africa is a market that offers long-term benefits to investors and millions of potential customers waiting to be served.

Partner Message

Intercom’s platform helps you engage and support your users through personalised chat-like experiences, with over 25,000 companies using it every single day. If you’re an early-stage, high-growth start-up, you can get access to its Early Stage Academy today at a 95% discount!

Join the program today.

From the Cabal 

Fintech solution, Kippa, which tracks inventory for small businesses has a new President, Duke Ekezie, who will responsible for expanding the fast-growing startup. Read more here.

Communication software company, Intercom has launched Intercom Early Stage, a programme where eligible startups can get a 95% discount on Intercom’s platform with premium access to Intercom tools. Read more here

Launched in 2017, health-tech startup, WellaHealth is expanding its services with the announcement of WellaHealth 2.0. Read more about its new array of health services here.

Have a great week.

Thank you for reading The Next Wave. Please share today’s edition with your network on WhatsApp, Telegram and other platforms, and reply to this email to let us know what we can be better at.

Subscribe to our TC Daily Newsletter to receive all the technology and business stories you need each weekday at 7 AM (WAT).

Follow TechCabal on TwitterInstagramFacebook, and LinkedIn to stay engaged in our real-time conversations on tech and innovation in Africa.

Sultan Quadri, Staff Writer, TechCabal.

Sultan Quadri Staff Writer

Get the best African tech newsletters in your inbox