Local content will drive African bandwidth use

Earlier this year, African carrier's carrier WIOCC asked a panel of experts - among them Balancing Act CEO Russell Southwood  - how they would invest $100 million in African ICT. This week, in the run-up to AfricaCom, Developing Telecoms will republish their opinions.

There are two types of ICT investments that should be interesting over the next five years: things that help to deliver bandwidth at the lowest possible cost to consumers and the things that Africans will use that cheap bandwidth for.

The two are linked, for without locally relevant content and services the market will not grow as fast as it should.

Carriers’ carrier infrastructure: With the shift from voice to data, bandwidth will have to become a commodity so it will make less and less sense for mobile operators to run their own infrastructure. Therefore ‘carriers’ carrier’ companies who can act as third party providers will become financially attractive or consortia between mobile operators who raise money in the market.

Energy delivery: Mobile operators have probably wrung as many savings as they can out of hybrid battery-diesel generator power for base stations and the alternatives, like solar and wind, are still falling short of the required business case.

Therefore there is an opportunity for somebody to engineer a pathway through the rather stodgy energy regulatory environment to create transmission and supply companies for both urban and semi-rural bases stations.

Content: There has been a burgeoning of African online content platforms and investors are already starting to line up to put money into them: witness the Tiger Global investment in iROKO. The link below provides an overview of who’s in this part of the market:

http://smartmonkeytv.createsend1.com/t/ViewEmail/r/078AA9043ECA849C2540EF23F30FEDED

Transaction services: M-Money takes time to take off and despite the ‘naysayers’ bleating about it not working outside Kenya, its use is steadily growing. It will provide the platform on which a whole variety of transaction services are built and Africans will buy stuff online in increasing quantities.

The requirements are different but providing trust, quality and value will win the day. Beneath the public surface of these services are a whole series of financial underpinning services whose value will increase and are probably interesting bets as well.

So having made these selections, US$100 million seems quite a modest sum...

Russell Southwood is the Chief Executive Officer of Balancing Act

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