Connectivity targets for 2030

The ITU released the Global Connectivity Report in early June 2022. The report lays out the connectivity targets for 2030. The report includes the usual internet penetration targets, but it also lays speed targets for fixed broadband and for schools. For schools, the minimum download speed per student is 50 kbit/s. The minimum speed for fixed broadband is 10 Mbit/s.  These are ambitious targets because the majority of people and schools that are not connected will be in difficult to reach places. Two notable business opportunities are from Starlink and Intelsat. Starlink is planning on launching in Mozambique and Nigeria […]

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Digital services tax in Tanzania

After months of rumours, Tanzania has announced a digital services tax (DST). The Minister of Finance, in the 2022/23 budget speech, announced a 2% tax on the revenues of non-resident digital platforms. No cost-benefit analysis has been publicly released. Nor are there any details on when the DST would be imposed, how it would be collected and what penalties would be incurred if digital platforms did not comply. In addition to the DST, the Minister also announced the removal of the VAT exemption for smartphones because it “didn’t lead to reduction of prices to final consumers rather benefited traders”. Unfortunately, […]

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NGII: Select case studies

Balancing Act has a great feature this week looking at the role of monopolies in the wholesale market and the impact this has on retail prices for several countries in Africa. We are going to build on that feature by providing some data from our Next Generation Internet Index (NGII). The principle behind the NGII is to measure a country’s progress towards the next generation Internet, or what is now commonly referred to as the metaverse. Augmented Reality, Artificial Intelligence and Virtual Reality will mean a more interactive and immersive experience. This requires high bandwidth and low latencies, but at […]

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Getting ready for the future: South Sudan

Building new fibre routes is an obvious way to speed up access to the Internet. But the gains always seem incremental – nearly all countries have at least one international fibre cable and sometimes many more. South Sudan is a great illustration of the impact of fibre compared to other forms of connectivity like satellite and microwave. In 2020, Liquid and Muya built two fibre cables from Juba to Uganda. The table shows that the impact was dramatic: between Q1 of 2019 and Q1 of 2022, latencies were reduced by 70% and download speeds increased by 238%. Of course, connectivity […]

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Metaverse Readiness Index

RIS has just launched the Metaverse Readiness Index (MRI)! Artificial Intelligence (AI) and Augmented Reality (AR) will require massive increases in computational efficiency and is collectively known as the metaverse. The metaverse requires fast, symmetrical broadband, low latency in a secure way and at an affordable price. We’re excited about the MRI because it measures the gap between the current state of Internet access and a metaverse-ready future. The MRI will be an average of the 4 sub-indices. However, countries are excluded if there is missing data in one of the 4 sub-indices. The MRI is designed to be aspirational, […]

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Australia’s readiness for the metaverse

 RIS has been investigating what future networks are going to look like. Artificial Intelligence (AI) and Augmented Reality (AR) will require massive increases in computational efficiency and is collectively known as the metaverse. An immersive, metaverse experience requires low latency. While download speeds are one component, latency is probably the most important. Generally, fixed fibre networks have far lower latencies than wireless. Except in Australia. Why?  The biggest complaint from Australian telco’s is the role of the National Broadband Network (NBN). The wholesale market is dominated by the NBN. The process to build the NBN was initiated in 2009 and […]

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Ghana looks to tax OTTs

Ghana is looking to join the growing club of countries in Africa that have imposed taxes on OTTs. But there is a strange cognitive dissonance that government’s have on this issue and Ghana is a perfect illustration. The Minister for Communications and Digitalisation, Ursula Owusu-Ekuful has said:  “We are determined to accelerate the use of digital technology, applications and service at all levels, build and protect our digital infrastructure, and enhance capacity and digital skills acquisition of our youth. As you may be aware, it is only through tax revenue mobilization that such investments and more can be funded”.  It’s […]

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Doubling down and making it worse

In South Korea, telco’s have managed to persuade the state to intervene and impose an entirely new regulatory regime for Internet peering. Called Sending Party Network Pays (SPNP), the government requires  ISPs (and Content Providers) to pay to send traffic to another ISP. For example, if a large ISP hosts a CDN, then the large ISP would pay to send traffic to a smaller ISP, even though it is the customers of the smaller ISP that are requesting the data (Scenario 1 in the graphic below). If that CDN is then moved outside of the country, then all ISPs have […]

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The tension between data caps and revenue maximization

Data usage is growing fast. But some telco revenues are not keeping pace with data usage. Why? In Africa, data usage is generally linked to increasing revenues. Why don’t we see the same trend in Europe? Figure 1 shows data usage compared to ICT sector revenues in Germany. We can see the same trends in the UK and other European countries.  One major factor that differentiates Europe – and other mature markets like South Korea – from Africa is that the growth of the ICT sector is bound to slow down with increasing market penetration. Once most households have fixed […]

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OTTs vs. Telco’s: competition and investment

The past few months have seen several telco CEO’s make the claim that OTTs are making their investments unviable. But is this the case? Are OTTs the cause of telco’s returns below their cost of capital? In the table below is a short summary of some of the CEO statements that have been in the media over the past year. If we look at the data, telco’s have healthy EBITDA margins, ranging from 29.3% to 30.6%, way above the average across 94 sectors of 12%. Return on Equity (ROE) is reasonable. The cost of capital is the lowest compared to […]

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