… 5G to receive $975bn of total sum
… 6.8% of monthly income spent on data in SSA
Omobayo Azeez
Operators of mobile telecommunication services will invest an equivalent of $1.3 trillion in mobile on capital expenditure (Capex) within a seven year period spanning 2019 to 2025.
This is according to the State of Broadband 2019’ Report released on Monday by the International telecommunication Union (ITU) at the Broadband Commission Annual Fall Meeting in New York held over the weekend.
According to the 2019 report, more than 75 percent of the total sum would be pumped into building infrastructure for the much anticipated fifth generation long term evolution network (5G LTE).
Also, it is indicated that online service providers are fast becoming major investors in digital infrastructure, with over $75 billion spent each year on data centres, submarine cables and other facilities from 2014-17 – double the 2011-13 average.
The report states that generally, investment is rising in the global telecommunications industry and is larger than many countries’ annual gross domestic product (GDP) with players and governments committed to deepening broadband penetration in the countries.
In 2016, global telecommunications capital investment, excluding operating expenditure (Opex), stood at $354 billion, an increase of 4 per cent from 2014’s $340 billion.
Citing the International Monetary Fund (IMF), the report states that only 31 countries in the world had a larger GDP in 2016 but the growth in capital investment of the global telecommunication industry is driven by increases in emerging countries which have rapidly increasing internet user bases and demand for data consumption.
The report further reads that some $23.5 billion of investment occurred in low and middle-income economies, while Capex actually dropped by $10 billion in high income countries.
Slowdown in overall adoption of broadband
ITU data also show a slowdown in overall adoption of high speed internet as growth in households with internet access at home was flat between 2017 and 2018, growing at 8.9 percent over the previous year. Growth slowed in least developed countries, at 17.5 per growth in 2018 versus 19.1 percent growth in 2017.
The 2019 Inclusive Internet Index (Facebook/EIU) notes that global growth in the percentage of households connected to the internet slowed, rising only slightly to 54.8 per cent from a level of 53.1 per cent for the previous year.
“For low-income countries, household internet adoption improved by a mere 0.8 per cent on average and for individuals using the internet, global growth slowed in 2018, as well as slowing across developing countries.”
The report also shows that international internet bandwidth prices for IP transit have dropped an average of 27 percent (CAGR) from 2015 to 2018, indicating also that the price of mobile broadband plans has been progressively falling, particularly in developing countries, such as Nigeria.
Average affordability of data, based on a 1GB plan, is best in South Asia at 1.2 per cent of monthly income, and worst in Sub-Saharan Africa at 6.8 percent of monthly income.
Although, report indicates that on a positive note, the amount spent by internet user in Sub-Saharan Africa has falling from 13.2 percent of monthly income in 2016.
“While data has become cheaper, affordability of internet-enabled handsets remains a challenge, and the cost of devices has not significantly fallen; it remains a key barrier to mobile ownership and mobile internet adoption in low- and middle-income countries,” the report adds.
