Sub-Saharan Africa Digital Infrastructure Outlook for 2023

Digital transformation is crucial for Africa, particularly its potential impact on sectors such as health care, education, and government. To measure the status of, and readiness for, digital transformation, one must consider the prerequisites for its realization starting with digital infrastructure and connectivity services. The COVID-19 pandemic has highlighted the importance of adequate digital infrastructure and services.

Unfortunately, many are still without access to vital infrastructure due to coverage or affordability gaps. As we have seen during the pandemic, those without connectivity are excluded from the digital economy and its benefits such as tele-health and remote learning and work. Digital infrastructure expansion and investment can help to increase internet usage and drive the digital economy.

Both globally and across Africa, internet usage and demand for services continue to rise despite economic downturns. Telecommunication services providers are facing pressure to expand, maintain, and upgrade vital infrastructure required to support vital connectivity services.  The goal of greater digital transformation, and thus, infrastructure investment, will continue to shape the digital infrastructure landscape throughout 2023 and into the future.

Supply-Side Themes: Digital Infrastructure Investment Trends

Recent trends in Sub-Saharan Africa infrastructure investments include the materialization of next-generation subsea cables, as older cables approaching 20 years reach their end of life.  Over the last several years, we are seeing that these submarine cables are increasingly funded by OTT players rather than traditional telcos.

 Investment in long-haul terrestrial fiber networks continues, but as traditionally viable areas become increasingly connected, it can become more costly to connect small and medium sized cities. Many operators, especially in more developed markets, are more focused on densification of metro and access networks. This is vital to support 4G expansion, prepare for 5G, facilitate rollout of access fiber to drive Fiber-to-the-Home and Business plays.

This trend can be observed in Figure 2 which illustrates how Fiber Reach (% population within 5 km of a fiber cable) has evolved in select African markets since 2019.

Plateaus in certain markets do not necessarily represent slowed network coverage, but rather an increased redundancy and densification in urban centers, with more players competing for similar customers.  In certain cities, FTTx is reaching a stage of maturity where battle lines are drawn in contended cities, and internet service providers (ISPs) are starting to consolidate.

While 5G is yet to live up to its global hype, and really just getting started in Africa, the technology’s dense infrastructure requirements are driving further driving urban infrastructure densification. Commercial 5G pilots will continue to emerge, though 5G coverage and adoption may not be realized for quite some time, especially beyond the use cases such as FWA. We also expect to see the towerco industry evolve, as many MNOs sell off their assets, resulting in more funds for network expansion and cost reduction through shared Opex.

Lastly, international and local data center capacity will continue to grow quickly as longstanding capacity gaps begin to close with some high-scale investments, with “hyperscalers” begin to make a presence. While adoption of cloud services is a near-term driver, meaningful advancements in artificial intelligence and machine learning may further drive demand for cloud services in the medium to longer term.

As digital infrastructure expansion and investment becomes more nuanced, firms will require more granular insights, as well as predictive analytics, to adequately uncover potential opportunities and invest in an optimal fashion.

Questions or comments?  Interested in discussing further?  Contact us to arrange for a meeting with a member of the HIP Consult team.

Electrifying a Greener ICT Industry: Data Centers

This is the first of a series of HIP Consult blogs on the climate crisis and the ICT industry. As climate change moves into the foreground of international politics and increasingly influences corporate decision-making, players within the ICT industry have begun to grapple with potential ways to “greenify” an industry that is reliant on electricity to keep populations connected and integrated with the digital economy.

The largest culprit in the ICT industry are data centers – carrier hotels, cloud farms, etc. – which house the world’s digitally stored data.  As of 2018, the ICT ecosystem contributed over 2% of overall global carbon emissions, while data centers alone contributed around .3%. As the digital economy grows, these contributions will only continue to skyrocket, with some projections associating 8% of projected global electricity demand by 2030 with the energy demand of data centers.

Data centers require electric power to consistently run computers servers and cooling systems to avoid overheating. Traditionally, data centers have been connected to the local electrical grid which may not be run off clean or renewable sources.

The current electricity situation for the data center industry is not sustainable, and it is beginning to crack. The high electricity demand of data centers can overload legacy transmission networks, overtaking supply during peak times and causing load shedding or rolling blackouts. This has been well-reported in Ireland recently, as EirGrid’s forecast that data centers could account for 25% of all electricity demand in Ireland by 2030 influenced a new policy that will have data centers provide their own power at times of high demand. However, this move has been met with trepidation from climate change activists, as on-site facilities would likely utilize petroleum or diesel sources which can be easily turned on and off as needed.

In some parts of the globe, data center providers have leveraged the natural cooling power of their surrounding climate to reduce their electricity demand. There has been a trend for new builds to occur in cooler climates, such as in Sweden and Norway, where outside air can be blown in to prevent overheating. (These Scandinavian markets have the added benefit of sourcing much of their national electricity supply from non-fossil fuel sources, including hydro and nuclear power.) Since it is not possible to reduce the overall electricity demand of data centers this way in all markets, remaining demand must be met by renewable energy wherever possible.  

In emerging markets, there has been a surge in plans to build climate friendly data centers, mostly by leveraging ample sunshine where possible.  In late 2021, Moro Hub and the Dubai Electricity and Water Authority (DEWA) began construction of the world’s largest solar-powered data center at the Mohammed bin Rashid Al Maktoum Solar Park, United Arab Emirates. In early 2022, French telecom giant Orange teamed up with Engie in Cote d’Ivoire to retrofit their data center in Grand Bassam with photovoltaic solar panels on its roof and carports. While these data centers still require lots of electric power, the use of on-site renewable sources will reduce stress on the grid and ensure renewable energy to meet demand.

Retrofitting data centers with solar panels could also be an effective solution in more mature markets, where there are already sprawling data centers located in areas which have high global horizontal irradiance. This measure of how much of the sun’s radiation reaches the Earth’s surface indicates where solar panels would be the most effective at generating electricity. While they may not generate enough solar power to meet the data center’s total electricity needs, they could reduce strain on the grid by replacing some of that demand with site-specific, climate friendly renewable energy. Data centers in the United States’ West and Southwest (such as the hubs in Phoenix and Silicon Valley), as well as those in Mexico and other parts of Central America, could be prime candidates to add rooftop solar panels.

As the climate crisis becomes more omnipotent, major tech firms have announced plans for carbon neutrality. In 2020, Microsoft announced a plan to become carbon-negative by 2030. Apple, which achieved carbon neutrality in its global corporate operations in 2020, extended its commitment to become carbon neutral across its “entire business, manufacturing supply chain, and product life cycle by 2030” and Meta (formerly Facebook) announced a similar goal in 2021. (Amazon lags behind the curve for U.S. companies, announcing a plan to use 100% renewable electricity by 2030 and achieve net-zero carbon emissions by 2040.) Alibaba’s 2021 announcement of a goal to achieve carbon-neutrality by 2030 in both direct and indirect operations continues the movement towards corporate responsibility and marks the firm’s intention to reduce their reliance on China’s coal-dominated electrical grid to power their data centers and other operations.

The data center industry must devote future investments to even marginally reduce their electricity needs and greenify their energy sources, which in addition to pursuing climate targets may also improve affordability and consistency of service.

The Taliban’s Internet

In August 2021, the United States-backed Afghan government collapsed, and the Taliban re-took control of the country as U.S. military forces withdrew from Afghanistan. As of 31 August 2021, the military withdrawal is complete, and the nearly twenty-year American occupation of the country has ended. While touted as an “extraordinary success” by President Biden himself, the not-so-peaceful transfer of power has many around the world fearful of the Taliban’s imminent crackdown on civil liberties and human rights.

A central feature enabling the Taliban’s ability to control and curb the freedom of Afghans lies in the country’s telecommunications infrastructure, which was largely financed by the U.S. and its NATO allies. For the twenty years under U.S. occupation, Afghans were permitted free access to the world wide web. Afghanistan rebuilt its physical telecom infrastructure after years of war, such that the network became largely reliant on mobile broadband and mobile phone penetration reached 80%.  According to InfraNav analysis, approximately 45% of Afghans now live within 5km of a fiber optic cable, offering the possibility for high-speed broadband connection. Afghanistan also has international terrestrial fiber connections to all the country’s neighbors, except China.

Unlike the previous Taliban regime (which ruled Afghanistan from 1996 to the U.S. occupation in 2001), today’s Taliban is tech savvy— embracing, rather than rejecting, modern technology and all its power. As insurgents in occupied Afghanistan, they leveraged their U.S.-enabled internet access to spread propaganda and keep tabs on those under their control. These tactics helped to ease their recent take-over of the country when a power vacuum was imminent, and it is likely they will now scale them to the national level to secure their control over the territory. That the “new” Taliban has knowledge of social media and messaging applications has stoked fear that Afghans will be targeted for their internet presence as the Taliban leverages the power of the internet to hunt and target political dissidents.

In August 2021, Taliban forces met with the Afghanistan Telecom Regulatory Authority (ATRA), seemingly to assert their power over the country’s telecommunications assets. The Afghan Ministry of Communications, through its subsidiaries Afghan Telecom and Afghan Wireless, owns and operates over 2,500 kilometers of live fiber throughout the country. In October, the new ATRA announced that all telecom sites in the country which had been damaged after the U.S.-backed government collapsed have been restored and coverage expanded to underserved areas. These reports have not been independently verified. It remains to be seen whether planned fiber routes, such as Asia Consultancy Group (ACG)’s high-capacity National Optical Transport Network, will be allowed to go ahead under the new government. The mobile giant MTN, which holds a leading 40% market share over Afghan wireless broadband, has already accelerated its plans to sell its assets and exit the market due to the transfer of power; however, the ATRA has also prohibited telcos from removing or relocating their infrastructure on security grounds.

Taliban control over existing fiber optic routes could allow for internet blackouts— similar to the one they already implemented in Panjshir, the last hold-out province to fall. However, the Taliban still does not have the sophistication necessary to censor their new subjects without utilizing the blunt blackout approach which remains counter to their interest. Similar to cutting off one’s nose to spite one’s face, terminating or blocking internet connection to resistant regions would also preclude the Taliban from using the Internet to spread propaganda or target dissidents in those regions.

The internet is powerful. It can be a great source of good, enabling digital transformations which better entire societies and the people living in them; but it can also be nefariously powerful. The Taliban, with repressive ideas about human rights and civil liberty, has leveraged the power of the internet to re-take control of a country of over 35 million people. The world will watch with bated breath as they take their technological prowess and begin to govern.

Chilean Ministry of Education Pilots InfraNav School Connectivity Platform

The COVID-19 pandemic presents stifling challenges to education: school shutdowns have expedited the need for digitization of economies and reliable, accessible Internet access. In response, HIP Consult and its data visualization and analytics platform, InfraNav, developed a portal for baselining, extending, and improving school ecosystem connectivity.

HIP Consult recently launched a pilot of the portal, School Locator, with the Chilean Ministry of Education (MINEDUC) and Fundacíon Chile to promote and optimize connectivity and adoption of digital services for schools and their students across Chile.

Designed to support national connectivity objectives during the time of the COVID-19 pandemic, School Locator is an interactive web application that provides localized insights for school connectivity through data visualization and analysis. Its dynamic maps and dashboards help users assess school connectivity status, technology type, download speed, and contextual characteristics. These insights enable users to identity outliers and establish opportunities to improve quality of service and/or coverage.

In 2021, the team will focus on developing additional capabilities in order to extend and improve connectivity to schools as well as the surrounding communities. New features on the horizon include a Quality of Service (QoS) dashboard and reporting and feedback system mechanisms, among others.

InfraNav School Locator Pilot Overview