Is 5G the Next Leapfrog for Africa?
By Laolu Akindele
Associate Director - Risk Assurance Services at PwC Kenya
Introduction
Mobile telecommunication continues to grow rapidly with over 477M unique subscribers across Sub–Saharan Africa and 272M using mobile internet. This number is estimated to grow to 614M unique subscribers and 475M mobile internet subscribers by 2025 (GSMA Roadmaps for 5G spectrum report). Mobile capabilities continue to evolve constantly from 2G networks (which provided voice and SMS services) to 3G networks (which introduced mobile data) to 4G networks (which led to the dawn of the smartphone and apps era) to the arrival of the 5G network.
What is 5G?
5G is the abbreviation for fifth generation. It's the next generation of mobile internet technology and comes on the heels of the 4G LTE standard. 5G will be critical because it will enable unprecedented levels of connectivity, upgrading 4G networks with five key functional drivers: superfast broadband, ultra-reliable low latency communication, massive machine-type communications, high reliability/availability, and efficient energy usage. Together, these defining features will transform many sectors, such as technology, manufacturing, healthcare and transportation.
Government regulators must properly define their 5G roadmap; telecommunications operators must assess appropriate business models; and users must find ways to realise the benefits of this new technology. All parties must work together to maximise the opportunities that 5G will create in Africa.
Recent developments in Africa
Some countries have progressed with 5G network trials and deployments, even though spectrum awards have not taken place. Recent developments in some African countries are shown below: Kenya: Safaricom started 5G trials in March 2021 and Airtel has upgraded more than 500 sites to 5G. The 5G spectrum will be auctioned by the regulator in mid-2022.
- Mauritius: 5G spectrum licenses issued to three mobile operators in June 2021. My T-Mobile launched 5G services in the country.
- South Africa: First commercial 5G networks in Africa deployed in 2020. Operators are using temporary allocated spectrum.
- Uganda: MTN Uganda has conducted 5G trials. Regulator is currently reviewing spectrum bands in readiness for 5G.
- Nigeria: No commercial 5G deployment, however, the regulator has developed a document detailing their plans for 5G deployment.
- A report on 5G in Africa by GSMA, a global trade organisation for mobile operators, estimates that only seven African countries, including South Africa, Nigeria and Kenya, will have 5G by 2025. And this will account for only 3% of mobile data compared to 16% globally.
Potential benefits
5G can help Africa leapfrog to ‘industry 4.0’, automation of traditional manufacturing and industrial practices using smart technologies. The high speed and low latency 5G provide will lead to relevant use cases in Africa such as:
- Healthcare advancements and Telehealth using Augmented Reality (AR) and Virtual Reality (VR)
- Efficient agriculture production through use of agri-sensors
- Factory and warehouse automation
- High speed broadband to homes and offices
- Smart cities and buildings
- Smart metering (water/electricity)
- Smart retail services
- Distance learning
- Immersive video conferencing
- Customised advertising
- Business process efficiencies using AR, VR and Internet of Things (IOT).
Challenges
One of the main challenges to building 5G infrastructure in Africa is the size of the territory. 5G operates on higher bandwidths and requires multiple radio sites to support it. Considering the vast scale of the region and low population densities in remote regions, this can adversely affect the 5G use case.
The second challenge is that 5G is a fully new architecture and requires a complete change in the core network. This can be costly and challenging for operators in complex and competitive markets.
Lastly, the current rate of adoption of 4G tells its own story; over half a billion people who are living in areas with a mobile broadband network in Sub–Saharan Africa are not using mobile internet despite substantial increases in mobile broadband coverage since 2014, (GSMA Mobile Internet Connectivity report 2021). Affordability has improved substantially but remains a key barrier, especially handset affordability. If African consumers can't afford 4G, they may be unable to afford 5G or the new devices needed to use 5G. The cost of rolling out 5G versus the potential return on investment for investors will be a key consideration for 5G implementation.
What's next?
While 5G is inevitable, the adoption is not imminent in most African markets as the current technologies deployed can serve customers’ current use cases and mobile connectivity demand. The 5G adoption journey in Africa will take some time, due to the challenges highlighted above. The following are some of the steps to take to drive 5G implementation and adoption:
Regulation
African regulators are at the preliminary stages of developing regulations that will allow for a 5G rollout. There is need for certainty over spectrum roadmaps and regulatory rules on issues such as license renewal, taxation, and coverage obligations. Deploying a 5G network involves large costs and long payback periods. Prospective investors understandably seek certainty and clarity about the legal and regulatory landscape.
Spectrum availability and management
Spectrum planning is key to the successful rollout of mobile services. Spectrum relates to the radio frequencies allocated to the mobile industry and other sectors for communication over the airwaves.
Governments should agree on the general objectives for future digital developments before defining the 5G roadmap. This should guide spectrum availability and methodology of assignment to achieve coverage, affordability, and extensive digital inclusion. Once that is done, a roadmap should be put in place covering: identification of spectrum, spectrum clearance, technology definition and restrictions, spectrum valuation, award design and award implementation. This should be done with input from stakeholders.
Operators can minimise deployment costs by having access to sufficient spectrum, thereby enabling countries to benefit from the potential growth in GDP afforded by mobile services. Limited spectrum will require operators to deploy additional base stations to meet traffic demand and this can have an impact on further investment in geographic roll-out, quality of services and prices
Infrastructure
Operators and network equipment vendors in the region need to make plans to prepare existing network infrastructure for 5G, adopt cost-effective infrastructure deployment solutions (such as network sharing, energy efficiency solutions and innovative network financing models), and develop a framework to manage the complexity of operating multiple networks simultaneously
Innovation and digitisation
Government should review and update policies and procedures to enable digital transformation. The government can be market shapers of innovations, by ensuring regulations are implemented to drive innovation and by creating demand for certain innovations. They should also encourage investments into digitisation by the public and private sector. 5G will enable tech innovation by creating opportunities for tech startups to develop innovative and relevant solutions for society.
End users
Policy makers should engage cross-industry players to co-create a value generating ecosystem and align ecosystem stakeholders to realise the value potential of 5G. They should collaborate with the people who will create, use, and benefit from the technology throughout the process.
Conclusion
The integration of 5G into lives and work has the potential to positively impact African communities and economies. Even though there are challenges that might adversely affect the 5G use case, we expect that 5G will inevitably scale due to advances in mobile technology.
Government regulators must properly define their 5G roadmap; telecommunications operators must assess appropriate business models; and users must find ways to realise the benefits of this new technology. All parties must work together to maximise the opportunities that 5G will create in Africa.
Laolu Akindele
Associate Director - Risk Assurance Services at PwC Kenya
T: +254 20 285 5612 E: laolu.x.akindele@pwc.com
