Connected frontiers of SADC’s telecommunications industry as it builds the digital economy of tomorrow

Telecommunications has been the backbone of economic activity, driving Information and Communication Technology (ICT), which ranges from investment in fibre and cloud infrastructure, mobile networks, computer and software focused information technology (IT), digital platforms, E-commerce, fintech and mobile banking, to Artificial Intelligence. It is now the biggest driver of economic growth and innovation. It is as significant as the advent of the Industrial Revolution in the late 18th century that propelled Great Britain to a world power at the time. ICT is now one of the most important industries in the modern global economy.

Balancing investment with affordable data pricing

The Who Owns Whom report on the Telecommunications industry in Southern Africa leaves no doubt about the positive impact and progress being made across the countries covered in the report. While the state of development is not the same in each country, there is no country where the industry has not contributed to significant growth.

Although Southern Africa remains an emerging market, continued investment in fibre, cloud computing, AI and 5G will fast-track digital inclusion across future digital ecosystems as enterprise use cases mature. This requires the region to address high data costs which remain a critical barrier relative to income, especially in countries like Malawi, Mozambique and Madagascar, which still have serious limitations in fibre backbones and mobile broadband coverage.

The principle of appropriate rewards always ties back to the investment made. These rewards are within reach for investment in new ICT technologies if enabled by the industry and the supporting infrastructure. The most successful attribute of innovation within the ICT is the creation of demand, which also calls for ever-increasing infrastructural capacity. A prime example is the undersea cables that connect countries and continents and carry all the data from those countries. In 2009, Seacom launched Africa’s high-speed broadband submarine cable system along the eastern and southern coastlines, connecting East and South Africa to Europe and Asia, with a capacity of 1.4 Tbps. The 2023-2025 “2Africa” undersea cable connecting South Africa, Mozambique, Mauritius and Angola, has a capacity of 180 Tbps; that is a capacity increase of 129 times to meet the increase in demand.

The scramble for data storage as AI takes centre stage

The advent of AI and Cloud technologies has led to an explosion in big data, reshaping global investment priorities and creating massive demand for data centre capacity. While Southern Africa is still in the early stages of developing digital infrastructure, South Africa is leading the way towards becoming a strategic gateway for AI computing, cloud services and digital trade across the African continent in terms of data centre investment. It is followed by Botswana, Namibia and Zambia with a number of international tech companies. However, all must address electricity and water availability – data centres are big consumers of these – as well as regulatory certainty to fully capitalise on the tech-driven investment wave.

In Southern Africa, demand for broader telecommunications services exceeds supply. The proportionality, illustrated hereafter, arises from differences in purchasing power. Within the Southern Africa region, South Africa dominates demand and investment, because it is more economically developed than its peers, meaning its people have a higher standard of living and more money to spend on the “Internet of things”. (IoT)

What is encouraging about this sector is that the other countries in Southern Africa have an opportunity to catch up, provided they address issues associated with governance and political stability. These are essential to accelerated growth and to the capital inflows needed to meet growing demand for the wider telecommunications sector.

They can leverage the industry’s achievements, having moved from connecting communities through voice and mobile services to becoming the digital backbone of the Fourth Industrial Revolution, which is transforming Southern Africa’s economic landscape

Why is ICT important to economic growth?

Today, advances in artificial intelligence, cloud computing, the Internet of Things, fintech, e-learning, digital healthcare and smart agriculture are unlocking new opportunities for innovation, productivity and inclusive growth. While ICT appears at the bottom of the graph illustrated here, its influence is felt across all the other industries. These industries have long been and will continue to be heavily disrupted by the ICT industry.

By investing in resilient digital infrastructure, supportive regulation and digital skills, Southern Africa, with its vast resources, is very well positioned to become a competitive regional hub for technology, investment and sustainable economic development.