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- Who is keeping Africa connected?
Who is keeping Africa connected?
The big business of selling internet in Africa
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We’re already a week into December.
It’s the time of the year when friends and family spend time together and share stories from the year.
But for friends and family in Africa, it can be expensive to make long calls.
That’s why TSD Telecom lets you ‘gift’ airtime to your friends and family in Africa - so they can make calls wherever they are.
To ‘gift’ airtime to friends and family across Africa, click below.
Alright, let’s dive in.
Who is Keeping Africa Connected?
The internet turns exactly forty one next month.
But in Africa, it’s thirty-two.
So much has gone down since Africa first went online in 1991. Today, it’s almost everywhere
In 2020, 40% of Africa’s population (roughly 520 million people) were surfing the web.
And by 2028, internet access will likely reach over 800 million Africans.
With numbers like these, Africa is one of the most promising markets to sell internet right now.
Internet access is barely halfway here
We’ve got a booming crowd of young people who don’t know a life without it
And Africa is the hotspot for the most handy internet delivery gadgets ever: Mobile phones.
And in Africa, a phone isn't just a phone.
It’s a bank, a shop, a TV and a government portal.
And as Africa’s PC market has never really taken off, phones are the main way Africans go online.
Roughly 75% of internet traffic in Africa comes from phones: the highest percentage in the world.
With numbers on the board like these, Africa is one of the most promising markets to sell internet in right now.
People want it cheap.
They want it fast.
And they want it everywhere, all the time.
So if you’re in Africa selling internet access right now?
You’ve got big, big business on your hands - especially if you’re these guys:
Telcos: Africa’s Connectivity Kings
Africa is the world’s biggest mobile-first economy. And telcos are right smack in the middle of it.
These are the guys keeping Africa connected. And they make serious bank.
But they weren’t always this big.
Back in the 90s, telcos were selling a service not many Africans cared about: Landlines.
Remember these things?
Yeah - they never really took off in Africa.
Landlines only worked if your area had ‘fixed line penetration’ - or phone lines.
But in 2000, Sub-Saharan Africa’s fixed line penetration was at a measly 3%, less than Manhattan back then.
And finding them in rural areas (where most Africans lived)?
Pretty much a no-go.
But things changed in the late 90s.
African countries started opening up their telecom markets.
So even if you weren’t government, you could jump in and start one.
And then when mobile phones entered the scene, it was showtime.
Telcos got busy setting up cell towers everywhere: in towns, cities, and even those rural areas where fixed phone lines never bothered to show up.
A cell tower in rural Kenya
With these towers spread all around, you could make a call from anywhere.
And suddenly, owning a phone just made total sense.
This kicked up cell phone use to over 500 million connections in just a decade.
And telcos landed a cash cow by selling airtime so people could talk and text away.
Then in the mid to late 2000s, things flipped again: smartphones started popping up.
In 2001, African telcos and their global partners came together to put together an undersea fibre optic cable system that lets data move much faster.
Then they packaged internet into data plans for users to start surfing the web.
Though heavy, all this investment has paid off. Why’s that?
Internet is on the up in Africa
As Africa embraces smartphones, selling airtime (voice calls) isn't doing it for telcos.
The mobile phone market is getting packed. It’s harder to find new voice customers.
And for smartphone users, WhatsApp is the new text and call platform.
That means that besides mobile money, the internet is now the second biggest cash cow for telcos in Africa.
And the proof is in the pudding.
Take Nigeria for example, which has about 154.8 million internet users.
MTN is Nigeria's leading internet provider.
And it's Nigeria’s second biggest and most valuable company after Dangote Group.
It reaches 33% of Nigeria’s population - a customer base of over 70 million.
For internet, though, it holds the biggest market share of 43%.
And their internet business raked in over $965 million in revenue, zooming ahead as their fastest-growing venture.
But even with this scale, Telcos' data plans aren't as wallet-friendly as they could be.
With all the hefty costs they have to deal with, there's only so low they can go with their prices.
And where there's money to be made, we can expect a certain type of company to step into the arena and take on Africa’s telco: startups.
Like Kenya’s Poa Internet
Internet still costs a pretty penny in Africa.
In 2021, six out of the top ten countries with the most expensive internet were in Africa
But Poa Internet is on it, starting with Kenya.
They charge customers just about $13 per month, which is half the usual price.
And their customers enjoy unlimited browsing, unlike many other internet providers that sometimes put data limits in place.
It's a sweet deal for internet users in the country
All these players rushing to sell internet in Africa are proof that the opportunity is still huge.
Access is barely at the 50% mark, but demand is shooting up.
It’s a big, big space - and one that has produced Africa’s most exciting companies.
What do you think of Africa’s Internet opportunity? Let me know here.
And that's a wrap for this week!
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