Africa is the world’s final frontier for the internet. It has 1 billion people across some 50 countries. The average internet penetration rate is so low, 14 percent, that it has nowhere to go but up. According to the ITU, fixed broadband subscriptions in Africa have not grown much and stand at just 0.3 percent today, but mobile broadband subscriptions have increased more than 50 fold in 6 years. When it comes to broadband, Africa’s future is mobile. Looking at how Africa has innovated with mobile provides a valuable lesson for many in the developed world who think that fiber to the home (FTTH) is the only choice for the future.
Mobile will be the choice for Africa going forward because of its low cost relative to other networks, the geo-demographic features of the continent, and users’ comfort with the technology. Informa, a leading telecom research firm, estimates mobile broadband connections in Africa to grow to 250 million by the end of 2015. These projections also include a doubling of smartphone ownership. However, the majority of Africans still connect to the internet with ordinary phones and 2G and 3G networks.
Africa illustrates the ingenuity of mobile services where necessity is the mother of invention. One example is the use of the SSSD application Fonetwish to update Facebook without an internet subscription. Text messages double as contracts in the village marketplace. Mobile provides a series of health and education applications from reminders for vaccinations to preloaded tablets with university curricula. Because there was no banking system in many African countries, money transfers evolved from prepaid mobile subscriptions. People simply transferred airtime to one another as a form of cash. Today the M-Pesa drives transactions that equal a third of the GDP of Kenya, where it was founded, and it is now used in Tanzania, Afghanistan, South Africa and India.
In the U.S., broadband will continue to be a key technology policy issue in 2014. The debate will pit the emotional, religious supporters of fiber against the rational, pragmatic perspective that a variety of technologies are needed to meet a variety of uses. In 2014 we can expect to hear more paeans that FTTH is the panacea to the world’s problems.
To be sure, FTTH is an important technology, but it is should not be the one and only choice when considering a range of solutions to meet the broadband future. Its key disadvantage is that it is not mobile. Mobility and access to the Internet on mobile devices is ever more important. Consider that a record 25 percent of all of Black Friday purchases were made by mobile devices, up 80% from the prior year. This means that America’s mobile networks are up to task. Indeed many are foregoing fixed connections to make mobile their primary broadband connection. This is happening in the US, and in other countries. In Denmark, where I live, 7 percent of the population has already chosen mobile as their primary internet connection.
Fiber has an important property of attenuation, meaning that it can maintain the intensity of the waves and signals it transmits. It is ideally suited for long distances, and that’s why it is used in undersea cables. In fact fiber is extant in all broadband technologies in some way. The point for policy makers is whether it is warranted to invest taxpayers money to bring fiber to the home, given the cost of deployment and the advances of other broadband technologies that continue to improve speed and price. America’s wired networks – whether copper, cable, or fiber – will be viable until they disintegrate into the ground.
Today’s wired networks are largely composed of fiber, with copper or cable being used for the last leg. It’s a cost effective way to deliver broadband. Furthermore, bandwidth on copper and cable can be calibrated both up and down based on customer need. The point however is that rather than build entirely new fiber networks, it makes sense to use engineering and innovation to improve utilization on existing networks. The speed and capacity of coax cable broadband will keep developing to meet the needs of customers – and is more economical than deploying new fiber. With node splitting, spectrum utilization, better modulation, and DOCSIS upgrades, cable coax networks can meet consumers demand for the next 15 years. In fact most developed countries have probably overbuilt their networks. This is why in Denmark today 65 percent of the population has access to ultrafast fixed networks, but less than 1 percent subscribe. The existing copper and cable networks provides the speeds to to meet current needs at a more attractive price.
Some argue that the deployment of FTTH is needed in order to meet demand for bandwidth arising from consumption of real time entertainment, taking some 60 percent of network capacity in the U.S. today with traffic largely for services such as Netflix and YouTube. But deploying FTTH bears a high cost that content providers and consumers are reluctant to pay, and using taxpayer money to fund FTTH is a subsidy to profitable video providers.
The reality is that an industry has evolved to improve video delivery with a variety of innovative solutions from software platforms, content delivery networks (CDNs), engineering enhancements, and other innovations. Providing caches of CDNs around the world is one solution which already speeds a third of the world’s internet traffic. Netflix has even built its own network to do this. Another possibility is to take advantage of high efficiency video coding (HEVC) to compress data so that more can be delivered across less bandwidth. Such technologies typically halve the amount of bandwidth needed to data deliver every 5 years. Yet another possibility is deliver over the top (OTT) video via multicasting, the technology that delivers cable programming on managed network facilities today. This could allow Netflix to be delivered to theoretically an infinite number of people with minimal bandwidth. Flemish scientists have created a solution that turns a unicast stream into a multicast stream, and creates and interesting solution in which OTT providers such as Netflix can cooperate with IPTV providers to make a more efficient use of bandwidth.
A smart vision of the future embraces a variety of network solutions and innovations. There is no one network that can do it all. Consumers don’t know or care whether they‘re on cable, LTE, Wi-Fi, DSL, VPN or FTTH. What they want is a fast and secure connection that is seamless from home to car to office.
It’s important to bear these facts in mind as many will urge that the government should get involved in fiber deployment, especially when consumers aren’t doing enough on their own to demand the technology. The point is that there is no reason to get bogged down in thinking that without FTTH the future is being held back. The reality is that 85 percent of Americans have access to a high speed access technology that provides 100 Mbps or more. Plus 95 percent of Americans have access to world class 4G/LTE networks, in many cases by multiple providers.
The broadband future demands not one, but many technologies. The U.S. should take a lesson from Africa – keeping an open mind in regards to future needs and technologies is a far better strategy than religiously subscribing to one technology as the only way forward.