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Harbir Singh Nat

International Finance Corporation, World Bank Group

November 12, 2013

LTE – Is Africa Ready for It?

1. Overview of 4G LTE Deployment in Africa

• 4G LTE take up in Africa has been slow:

As of September 2013, 85% of the 806mn connections

in Africa were 2G, 15% were 3G and only 0.7% were

4G

There are 15 live networks on the continent and

approximately 25 planned networks or in deployment

• Reasons for slow adoption of 4G LTE:

MNOs are still focused on expanding and improving

voice networks

• Most MNOs are still primarily running 2G or 2.5G

networks

• 3G penetration is only at 11%

• Many of the MNOs are struggling to make money

hence not focused on 4G expansion

Income levels do not justify cost of 4G development

Operators (MNOs, broadband companies) may not

want to pay potentially high 4G fees so they continue

with 3G or WiMAX deployment

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In green – Live networks

Data source: GSMA Intelligence

2. Current status and growth perspectives in Africa

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• Connections: By 2017 2G connections will have a

negative growth rate, while 3G and 4G connections

will grow at quarterly rates of 7.6% and 21%

respectively.

• LTE connections are expected to increase

exponentially from 558,000 at the end of Q32013 to

14.5mn in the next 3 years. Despite the high

growth rate, LTE connections will represent only

1.3% of total connections, up from 0.7% at the end

of Q32013.

• Penetration: 2G penetration will decrease by

approximately 7% in the next three years to 54%

by 2017, while 3G penetration is expected to

increase from 11% to 34%. 4G penetration will

evolve from 0.05% to 1.2%.

Data source: GSMA Intelligence

3. LTE network delivery models

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•A mix of broadband (BB) companies and MNOs

•Although MNOs are still focused on voice services, some are purchasing LTE licenses

•Existing and new BB companies are leading the way in network roll-outs

Providers

•Primarily higher frequencies - FD LTE

•Expensive compared to TD LTE

•Lower frequencies for the most part are not readily available due to lack of digital switchover

Spectrum

•Retail networks: Nigeria, Uganda, Tanzania, Angola, South Africa, Namibia, Zimbabwe

•Wholesale networks: Rwanda, Kenya Networks

4. Investors’ view: LTE projects attractiveness

Enough spectrum for the project

Credible management team

MNO interest in space

Stable regulatory environment

Sizeable corporates and (urban) population with sufficient disposable income

Conservative capital structure

Clear exit path for investors

Availability of spectrum for competition

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4. LTE deployment in other Emerging Markets: LAC

• 3G and 4G networks are more developed, together accounting for 45% of all

connections (estimated to be over 1bn connections as of September 2013).

• 4G networks are more widespread, currently 7% of all connections, and are

expected to grow faster, at 9% per quarter, building up to 25% of all connections

by 2017.

• 4G penetration is approximately 8% and is projected to increase at a fast pace,

reaching 30% in the next three years. 3G penetration is also expected to expand

by 15% during the same period, as 2G penetration decreases to as low as 38%

(today at 60%).

• There are 20 live networks on the continent and approximately 37 planned

networks or in deployment.

• Providers: Primarily MNOs, but broadband companies as well

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Worldwide 4G-LTE Network Launches, August 2013

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Data source: GSMA Intelligence

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Thank you.