Omdia View: May 2024

In the Middle East and Africa, a key highlight in the month of May was growth in 5G adoption in Africa with subscriptions surpassing 5 million, according to Omdia, while a 5G shared network infrastructure deal was signed in Ghana

Meanwhile Starlink continued to strengthen its presence in sub-Saharan Africa with new licenses awarded in Botswana, Ghana, Madagascar and Zimbabwe in the second quarter of 2024.

In the Middle East and North Africa (MENA), the Fiber Connect Council MENA (FCC MENA) and the FTTH Council Europe announced a strategic partnership aimed at accelerating the deployment of fiber-to-the-home (FTTH) technology in the region.

Here are Omdia's top telecoms highlights for May 2024 across the Middle East and Africa.

5G subscriptions pass the 5 million mark in Africa

— by Thecla Mbongue, Omdia research manager for the Middle East and Africa.

According to Omdia research, the number of 5G subscriptions passed the 5 million mark in Africa in May 2024.

The market is split between 4 million mobile subscriptions and 1 million fixed wireless access (FWA) broadband subscriptions, with 5G representing less than 1% of mobile subscriptions and just over 2% of fixed broadband subscriptions.

In the mobile segment, South Africa is the largest market, with a 54% share of the subscriptions, followed by Kenya, which accounted for 20% of the subscriptions.

Omdia forecasts that the number of 5G users will exceed 300 million by 2028 – but that will still only represent 9% of fixed broadband usage and 20% of mobile subscriptions.

Despite recording strong growth rates annually, the uptake is hindered by slower device-migration rates.

In South Africa, the growth is faster due to a higher postpaid user base, which has access to device financing. However, this is not the case for South African prepaid users and other African subscribers, who must pay for their devices in full and upfront.

In the second quarter of 2024, entry-level devices are priced from around US$250, which is a considerable amount for most of the subscribers across Africa.

Telcos must also market relevant use cases. Faster speed is often not good enough to convince broadband and smartphone users to upgrade to 5G devices. For now, the most relevant use cases are faster speed for gamers and for enterprise services.

Starlink strengthens in sub-Saharan Africa

— by Thecla Mbongue, Omdia research manager for the Middle East and Africa.

In the second quarter of 2024, Starlink reinforced its presence in Africa, notably in sub-Saharan Africa where most countries have licensed the ISP and it got approval to operate in Botswana, Madagascar and Zimbabwe. The ISP also got licensed in Ghana, West Africa.

In early June 2024, the ISP Paratus extended its Starlink distribution reach to Mozambique. Prior to that agreement, Starlink was available through other distributors in Mozambique, notably StarSat, which got involved with supplying South African suppliers and eventually stopped operating in early June 2024.

South Africa is yet to approve Starlink services; as a result, the authorities ordered the disconnection of kits in use on South African territory in 2023 and in early 2024.

As of early June 2024, Starlink was officially live in eight African countries, including four in southern Africa. The new second quarter additions raised this number to 11 markets, including seven in southern Africa.

As the largest and most advanced market in sub-Saharan Africa, South Africa cannot be omitted. However, regulatory hurdles persist. Starlink's push into southern Africa could put the service in an advantageous position to negotiate its entry into South Africa.

According to Omdia, sub-Saharan Africa had 18 million fixed broadband subscriptions in 2023 and the penetration rate stood at 7%. Southern Africa represented 60% of the subscriptions and had a 20% penetration rate.

The growth is driven by fast-increasing usage of fiber and FWA broadband. Satellite usage represented less than 1% of fixed broadband subscriptions in Southern Africa and, despite the steady growth in fiber and FWA services, there are gaps that satellite technologies can fill, notably in covering underserved areas.

Ghana adopts a shared 5G network model to boost penetration

— by Danson Njue, Omdia senior research analyst, Middle East and Africa.

On May 27, 2024, the Ghanaian government signed a partnership agreement with several firms – including Ascend Digital, K-NET, Radisys, Nokia, and Tech Mahindra – as well as two mobile network operators (AT and Telecel Ghana) to launch the Next-Gen Infrastructure Company (NGIC), a consortium that will undertake the deployment of a shared 5G network infrastructure in the country within the next six months.

According to the Minister for Communications and Digitalisation, the decision for a shared network infrastructure was influenced by the government's desire to fast-track 5G network penetration.

Under the agreement, Nokia and Radisys will build the shared network infrastructure while Microsoft and Tech Mahindra will provide the IT architecture and integration.

The government believes that the NGIC's neutral hosting model and network-as-a-service (NaaS) offering will accelerate 5G penetration, reduce the digital divide, optimize capex, and ensure efficient operating costs while enhancing environmental, social and governance (ESG) fundamentals.

In addition, the model will enable affordable high-speed mobile broadband services and accelerate Ghana toward full digitization by 2030.

Omdia forecasts that the number of 5G users will exceed 300 million by 2028.(Source: Image by freepik)

While Ghana is the first country to embrace an open access 5G model in sub-Saharan Africa, Rwanda adopted an open LTE model through a joint venture with Korea Telecom (KT) in 2014 and achieved up to 95% 4G population coverage by 2018.

Omdia believes that a shared 5G network strategy should greatly accelerate 5G penetration in sub-Saharan Africa, which stood at 0.2% at the end of 2023.

FCC MENA and FTTH Council Europe partner to boost FTTH deployment in MENA

— by Walaa Ibrahim, Omdia senior research analyst, Middle East and North Africa.

Fibre Connect Council MENA (FCC MENA) and the FTTH Council Europe announced a strategic partnership aimed at accelerating the deployment of fiber-to-the-home (FTTH) technology across the MENA region.

The agreement, signed during the FTTH Conference 2024 in Berlin, seeks to leverage the strengths and resources of both organizations to enhance digital infrastructure and connectivity throughout MENA.

This collaboration is designed to foster the exchange of best practices, technological advancements, and strategic insights to overcome the unique challenges faced by MENA countries in deploying advanced fiber networks. The partnership will focus on joint initiatives, knowledge-exchange programs, and advocacy efforts to promote the widespread adoption and advancement of FTTH technology.

Omdia views the agreement as a step towards improving Internet speeds and reliability for consumers, which is crucial for MENA countries to remain competitive in the global digital economy.

However, the deployment of advanced fiber networks in the region presents several challenges, including geographical barriers like vast deserts that complicate installation, dense urban environments and varying regulatory frameworks that can slow down progress.

Additionally, economic disparities and political instability pose risks to projects, and there is a need for a skilled workforce trained in the latest fiber-optic technologies to ensure sustainable deployment and maintenance of FTTH networks.

According to Omdia, fiber will be the dominant fixed broadband technology in MENA by 2028 and will represent 47.3% of fixed broadband subscriptions.

Ericsson and Umniah partner to expand 3G and 4G networks in Jordan

— by Walaa Ibrahim, Omdia senior analyst for the Middle East and North Africa.

Ericsson announced the signing of a memorandum of understanding (MoU) with Jordanian telecommunications company Umniah to enhance the latter's 3G and 4G networks in major cities across Jordan.

The partnership aims to boost network capacity and extend coverage to improve connectivity for Umniah's customers.

The MoU outlines the deployment of Ericsson Radio System products and solutions to adapt to the changing multiband and multilayer needs of Umniah's network over time. This adaptability is essential for futureproofing the network against the evolving demands of mobile communications.

Umniah will utilize 5MHz of newly acquired spectrum along with an additional 5MHz repurposed from its existing 3G network to enhance the capacity of its 4G services. This approach will help to manage increased data traffic and meet the growing demand for mobile broadband services.

This initiative involves deploying advanced technologies designed to improve overall network performance, resulting in faster Internet speeds, better call quality and more reliable connections. The additional spectrum allocation and the infrastructure enhancement are expected to enable Umniah to handle higher volumes of data traffic and extend its 4G network to currently underserved areas.

This is not the first collaboration between Umniah and Ericsson in 2024. In February, Umniah announced plans to implement Ericsson's AI solutions to optimize network performance and address critical network challenges in key locations.

Additionally, Umniah announced Ericsson as its partner for the launch of its first phase of 5G technology deployment in Jordan earlier this year.

You can find Omdia's full Middle East & Africa News Digest here.

For more information about Omdia's consulting capabilities, contact them directly at [email protected] or reach out to the Omdia analysts by emailing [email protected].