The East African broadband market earned $109.5 million in revenue during 2012 and is expected to reach $159.2 million in 2017.
More available and affordable customer premise equipment (CPE) and smartphones in the region are responsible for driving growth to the market, according to the new analysis "East African Broadband Market," from Frost & Sullivan.
User demand for access to social media platforms, particularly on mobile devices, is sustaining growth. Network coverage in Ethiopia, Sudan and Rwanda only makes up an average of 20% of the area, leaving the under-serviced market with much potential. Undersea cabling is being used to help the reliability of the networks, but developments still remain.
"The deployment of worldwide interoperability for microwave access (WiMAX) and third-generation wireless networks will contribute to the increase in broadband subscriptions in East Africa," said Lehlohonolo Mokenela, information and communication technologies research analyst for Frost & Sullivan. "Network operators are also offering code division multiple access (CDMA) technology to widen market scope."
The development of the broadband market remains slow to grow due to challenges such as insufficient broadband capacity, low customer income and a lack of local content from service providers.
More affordable handsets and tariffs for both consumers and business can help increase adoption of broadband services.
"Internet service providers are already deploying infrastructure in rural and under-served areas, fuelling a gradual rise in the use of broadband services," Mokenela said. "In fact, regional deployments to service areas where other broadband companies do not operate may present service providers with a first mover advantage in the East African broadband market."