Ethiopia in the Spotlight

Soon after assuming office in April 2018, the Ethiopian prime minister Abiy Ahmed’s government announced its intention to liberalize Ethiopia’s telecommunications sector, as part of a wider blueprint to gradually privatize several state-owned enterprises. Not surprisingly, this development was met with a great deal of interest by market observers. Potential entrants and investors have been busy ever since trying to ascertain the needs and opportunities encapsulated in this process to engage in the country’s ICT space.
 
As part of this wave of activity, HIP Consult recently supported the International Finance Corporation (IFC) in assessing Ethiopia’s digital infrastructure landscape. The analysis resulted in a snapshot of the current state of the market and the investments required to drive more ubiquitous broadband coverage and adoption.

Several studies have established the relationship between increased broadband penetration and a country’s GDP growth. The impact of widening internet use can be evidenced throughout many African markets, including neighboring Kenya and Uganda. Ethiopia, though, still ranks relatively low in terms of the penetration and quality of its broadband services. At the heart of this issue is an insufficiency of critical enabling digital infrastructure. 
 
HIP Consult estimates that the country’s Fiber Reach is 24%, meaning that less than a quarter of the population lives within 5 km of fiber.  By contrast, South Africa is at 75%. 

Data centers and towers are also critical to driving growth of the digital economy. There is currently a dearth of carrier neutral tier 3+ data centers in Ethiopia, although a recent press report indicated the Ministry of Innovation and Technology plans to build a big data center in 2020.  And the number of towers is surprisingly low for such a large, populous country. Among African countries of comparable size and economy, Ethiopia has the least number of towers per subscribers. Expanded tower infrastructure, accompanied with the right equipment, would bolster mobile coverage and improve quality of service.
 
Along these lines, the project revealed several digital infrastructure gaps which would benefit from investment, including a need to more than double the existing fiber and tower footprint, as well as establish several Tier 3+ data centers.
 
With the Ethiopian government’s efforts to reinvigorate the ICT sector, the time is ripe for investors to consider if and where to participate in the next phase of the market’s evolution and growth.

Regional Update: The Reality of 5G in Latin America

What’s the True Status of 5G in LatAm? 

The arrival of 5G promises to be an essential enabler for the digital ecosystem. It could optimize user experience, digitize sectors like transport, health and education, and promote innovation in IoT that could dramatically changes our daily lives. 5G has been positioned by vendors as a more reliable technology that will enable a more connected and intelligent world; vendors have promised higher speeds and lower latency capable of supporting increased demand for data. And though daily announcements of 5G trials and agreements fill our inboxes,, policy and technical frameworks must be adapted to determine and regulate how operators can build, launch and monetize this new technology before it can truly hit the market.

According to a GSA recent “State of the Industry” report there are 201 operators in 83 countries who  have reported 5G trials or launches. In some developed countries, 5G may be a reality this year, but for Latin America and the Caribbean, 5G is not expected to commercially launch until the middle of 2020.

A 5G trial does not necessarily translate into readiness to deploy, though it does demonstrate a keen interest to invest and experiment with the technology. However, it’s still too early to determine who will be the 5G leaders in Latin America. To better understand the status of 5G, HIP spoke with industry experts in the region to discuss 5G readiness, its implications, and the main barriers and challenges inherent in its adoption and deployment.

5G in the Market: Potential Applications & Benefits

Eric Rodriguez, Technical Solutions Architect at Cisco, believes that the main differentiator of 5G is that it requires participation from more ecosystem players compared to previous generations of tech. Both private and public sector organizations will need to participate in 5G investment and promotion. Kin Cabil Mendieta, Operations Director at Solucionika (a telecom solutions integrator based in Mexico) points out that 5G responds to the rising data demands which other technologies have not been able to adequately fulfill. From mobile banking and eCommerce to connected cars and homes, the digitization of economies in Latin America has created a need for more automated services, which 5G can support. 

The Internet of Things (IoT) promises a variety of exciting applications for the future, but the technology also has use cases which could make a difference in the near-term. Smart cities, for example, are already in stages of implementation, with 5G as their foundation. In highly populated urban areas, such as those prevalent across Latin America, smart city initiatives have the power to help address urban issues like garbage collection and flood management; they may also help communities better respond to natural disasters, according to Mr. Rodriguez.

In rural parts of Latin America where there is little or no connectivity, 5G could potentially leverage microwave networks to extend services with low traffic, helping to close the connectivity gap. Mr. Rodriguez believes that in this regard, 5G can potentially provide a cost-effective wireless extension to deliver basic connectivity; nevertheless, there is no doubt that fiber will be required to take full benefit of 5G. Therefore, deployments will likely be concentrated in urban areas where there is adequate fiber infrastructure.

  

Bottlenecks & Challenges, and Proposed Solutions

Given that operators are already in the process of trials in Latin America, there will more than likely be a transition from 4G to 5G before 2021. Many service providers are already in possession of the required infrastructure and equipment to deploy, as vendors have wasted no time pushing the new technology across the region.

But even if operators are ready to launch, a lack of technical and commercial clarity may still cause delays. Operators need more technical precision, as well as sufficient spectrum for 5G.  And last but certainly not least, a clear business model to monetize 5G services must be defined−one which takes into consideration new market players and enterprises. And from a regulatory standpoint, there is still a lag in the policy framework, which must evolve to respond to technological advancements.

Latin America must also find commercial models to justify additional investment in 5G. Because 5G differs from previous generations of mobile broadband, it could benefit from B2B solutions as potential sources of monetization,. Commercial packages for enterprises could invite more participants into the monetization pool, like software developers and cloud service providers. Major players looking to mitigate infrastructure costs like  leasing wholesale capacity and network deployment are already looking to determine how 5G might lower their costs and expand service offerings.

Back to Reality

Latin America is a region where mobile services are still predominant due to improved network coverage and more accessible prices. The market will need to face global technology changes and prepare to the possible premature jump to the 5G era, where other technologies like 2G and 3G still in use and 4G investments still on the way.

While IoT and other cutting-edge innovations have become strongly associated with 5G, this does not necessarily mean that countries not yet prepared for 5G must fall behind. The Latin American Telecommunications Studies Center encourages countries with less advanced infrastructure to grow their IoT ecosystem by developing solutions using 2G and 3G technologies. While the evolution of 5G is important, it is also fundamental that emerging economies continue efforts to digitize using existing infrastructure.

Operators will continue to invest in trials and rollouts of 5G in major Latin American cities, where there are strong fiber networks and higher ARPUs.  Still, there are many barriers to overcome before there will be a more regional transition to 5G. Operators and governments will require more comprehensive and transparent tools to manage and understand network availability to determine their readiness for 5G.

Data Visualization & Analytics Platform Reaches 100-Country Milestone

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Last month, HIP Consult celebrated its 100-country milestone for the data visualization and analytics platform, InfraNav.  The platform began as an initiative to collect data in order to respond to supply-side infrastructure gaps that impede strategic fiber network planning.  Initially, InfraNav was an internal effort to aggregate fiber network maps and create geospatial network data in South Africa, then Africa, and has since become the most comprehensive GIS database of digital infrastructure spanning across Latin America, Africa and Asia.

Over the past five years, InfraNav has been developed to build, deliver and scale the process of infrastructure mapping and analytics.  With an ongoing collection, curation and validation of fiber networks, as well as data centers, IXPs and other ICT infrastructure data, the platform’s intelligence continues to grow.  In pursuit of optimizing network planning and deployment, an aggregation capability was developed to layer infrastructure data with demand considerations using granular datasets that reflect socio-economic indicators like GDP, population density, as well as development-focused statistics like infant mortality and literacy. 

InfraNav will continue to expand and mature to better respond to the challenges and pain points of digital infrastructure stakeholders.  Currently, the team is working to integrate additional points of interest like financial access, energy and power infrastructure. The platform now includes mapping of supplementary assets like microwave, VSAT along with school and hospital locations for the Data Laboratory Countries of Bolivia, Kenya and Bangladesh.

Examples of applications that InfraNav is currently addressing include:

  • Operator densified fiber and BTS planning;

  • Qualitative and quantitative assessments of infrastructure bottlenecks and investment potential; and,

  • Identifying infrastructure sharing and interconnection opportunities

As the platform continues to acquire relevant types of related data, its applicable use cases continue to multiply.  The roadmap for InfraNav includes the integration of major deployment dependencies like spectrum allocation and Rights of Way (RoW).

Reaching 100-countries is a major achievement, but this is only the beginning. As InfraNav expands its depth and reach, the focus will be on developing algorithms and methodologies to better standardize metrics for achieving ubiquitous connectivity. InfraNav hopes not only to determine how much infrastructure exists across all countries, but also be able to calculate how much investment is needed to most effectively and efficiently connect populations.

Additionally, algorithms are being developed to more adeptly quantify the effects of internet connectivity on other sectors, like health and education. These metrics can help to guide both public and private sector players in streamlining budgets while pushing forward SDGs and other development agendas.

We welcome any commentary or feedback on InfraNav’s current and future features.  Please feel free to visit www.infranav.com to learn more or schedule a demo.

 

Beyond Connectivity: Leveraging Data Visualization & Analytics for Financial Inclusion

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Last month HIP Consult’s CEO, Judah Levine, presented at Mondato Summit Asia, a digital finance and commerce thought leadership conference hosted by Mondato , in partnership with the Australian Embassy in Jakarta.  A key takeaway from the presentation was that despite significant improvements in the availability and quality of broadband connectivity infrastructure in Indonesia and other parts of emerging Asia, there remain persistent gaps, particularly in poorer regions, hampering the expansion of financial services.

While it may not seem intuitive, connectivity is a critical pre-requisite for pursuing digital transformation of various industries, including the financial sector, Levine noted. This transformation, in turn, can prove essential for improving access to financial services for those traditional un/underserved, otherwise known as financial inclusion. Fortunately, over the past several years a confluence of infrastructure and service investments, technological advancements and accommodating regulation has resulted in meaningful progress for both the ICT and financial services sectors, yet much remains to be done.

According to the World Bank’s Global Findex, between 2014 and 2017, 515 million adults gained access to financial services, a 7 percent increase. There was also an 11 percent increase in the global number of people making or receiving digital payments. On the connectivity side, during the same time frame (2014-2017), global 3G coverage increased to 87% of the population, an increase of 1.1 billion people, according to GSMA’s 2018 State of Mobile Internet Connectivity Report. However, 1.7 billion adults are still financially excluded, and more than half of which either have no mobile coverage or coverage with no connection.

Data visualization and analytics is one approach to respond to the challenge of missing information in unserved or underserved areas. Measurement of existing access and inclusion, as well as connectivity levels, guides a foundational understanding of the current state. Then, analysis of critical enabling infrastructure can identify areas where connectivity is the main bottleneck to digital services adoption.

Recent initiatives to measure financial inclusion have collected data that yield interesting insights, particularly when the data is measured over multiple years, yet most data is only at the national level, with some subnational or even GPS level surveys. Where it is available, the latter allows for detailed coverage analysis and population proximity estimates. Responding to data gaps on the connectivity side, HIP Consult has funded and led a massive ICT data aggregation project through InfraNav, the world’s most comprehensive ICT data visualization and analytics platform. HIP Consult is currently building out capabilities to leverage more financial data for a project called InfraNav for Financial Services (IFS).

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IFS helps to contextualize the role of connectivity in progressing financial inclusion. For example, the left-hand chart below, derived from InfraNav’s proprietary data, compares financial services access points by type and subnational region, for a snapshot of access point distribution in Bangladesh. The adjacent screenshot entitled “Access Point Reach” from the InfraNav platform visualizes this data, offering a variety of tools to summarize geolocalized access point distribution.

InfraNav also helps measure infrastructure reach. The second chart, to the right, displays the percentage of the population in a given region that is within 1km of a particular financial services access point. By combining both sets of data, determining the effectiveness of an access point in a given region becomes easier. For example, the chart above shows that Rangpur has more Mobile Money Agents (MMAs) than Barisal or Sylhet, yet the second shows that MMAs in Barisal and Sylhet are more easily accessible to their respective populations. Visualizing this information enables exploration of more detailed patterns and deep-dives into specific areas of interest.

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Beyond measurement, further analysis may yield insights on supply-demand equilibriums and service optimization opportunities. Over time, improvements in data collection and sharing could allow for ever more comprehensive, granular, and timely analysis. This, in turn, will enable ICT and financial services players to apply smarter segmentation and distribution models to expand their services to areas heretofore seen as economically unviable.   

For more information, contact us at info@hipconsult.com.

Trends in the African ICT Sector

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Last month, HIP Consult traveled to Cape Town, South Africa, for the region’s biggest annual telecom event, AfricaCom.  More than 14,000 industry stakeholders from across the continent and the world gathered to network and discuss prevailing challenges and opportunities of Africa’s ICT sector.

The headline keynote session of the first morning of the conference featured MTN Group’s CEO, Rob Shuter, who spoke about the evolving road of the African telco in a new age of data and digital services.  He cited digital inclusion as essential to unleashing additional growth and revenue opportunities for mobile network operators throughout the region. “The first big problem,” according to Shuter, “is that the data coverage is not there.”  Following the geographic coverage of telecom services, he cited affordability of handsets and data services as another major inhibitor to the realization of more ubiquitous mobile internet usage.

Following Shuter’s remarks, Chairman of the Nigerian Communications Commission (NCC), Olabiyi Durojaiye, offered a regulator’s perspective, talking about the role of the public sector in addressing the challenge of digital inclusion.  He stressed that though there has been growth in the ICT sector over the course of the last 20 years, broadband connectivity remains too low, and the majority of youth who should be at the forefront of internet adoption lack the requisite access and skills to participate in the digital economy.  According to Durojaiye, governments and other public sector actors must treat internet connectivity as a human right.  In order to promote digital access and the continent’s development agenda, he noted, regulators must work with the private sector to expedite broadband deployment. 

The topics touched upon by Shuter and Durojaiye point to a wider theme of mobile market maturation and evolution playing out across much of Africa.  Due to a number of factors, ranging from rising costs and tightening margins, to regulatory and structural pressures, mobile operators and other telcos have seen their business models come under strain.  Against the backdrop of shifting market dynamics, an increasing number of players have started or intend to adoptalternative network strategies in an effort to reduce costs and support a spoking appetite for high bandwidth applications, which entails deploying significantly more infrastructure, fiber optics in particular, as well as deepening their relationships with third-party infrastructure services providers.  As infrastructure operators look to minimize average total cost, there is growing consent for the consolidation and avoidance of duplicative infrastructure and thus, thepromotion of open access networks.

HIP Consult’s CEO, Judah Levine, moderated a panel at AfricaCom on how these open access networks can support greater broadband penetration in the region.  Alexander Kiel, the CFO of CSquared, and a panelist in the session, commented that “with the additional site and bandwidth requirements, particularly related to the roll-outs of 4G and 5G across the continent, the amount of capital required will be immense, so shared infrastructure and open access will be key to connecting rural areas in particular.

Though the market dynamics for the African ICT sector have become more complex, it is clear that pockets of opportunity remain.  Unlocking these potential revenue streams will increasingly depend on having the right strategic partnerships and alliances in place.

For more information on how HIP Consult supports telcos to make course adjustments and thrive in challenging times, contact us at info@hipconsult.com.

Trends Towards a Digital Ecosystem in Latin America

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Last month, HIP Consult visited Bogotá, Colombia and Mexico City, Mexico, where the team met local ICT stakeholders and explored some of the challenges to achieving ubiquitous connectivity within these major Latin American markets.

Bogotá represents the wealthiest region in Colombia, but its mountainous landscape, like much of the rest of the country, creates geographical difficulties for the deployment of fiber optic networks and other digital-critical infrastructure.  Mexico City, one of the world’s most, sprawling, populous cities, represents a challenging case for efficient infrastructure planning.  While the Colombian and Mexican governments are keen to close the digital gap in their capital cities and other urban metropolises, they are also cognizant and concerned about the widening digital divide in more rural, underserved parts of their countries.

Columbia’s telecommunications regulatory body, la Comisión de Regulación de Comunicaciones (“CRC”), has been working to strengthen the sector by creating an agenda to identify and address challenges related to the promulgation of new technologies, while seeking to simplify regulatory frameworks to promote the digitization of the economy. On the infrastructure side, Colombia’s nationally-funded fiber backbone, operated by Azteca, has delivered connectivity to substantial numbers of municipalities previously unconnected, with commercial sustainability next in focus.

In Mexico, five years after the constitutional telecommunications reform, there has been a significant increase in access to both fixed and mobile broadband.  Projects like Red Compartida and Red Troncal will continue to improve the country’s connectivity, particularly in rural areas.  Mexico is perhaps the first country in the world to release 600 MHz spectrum for 5G use, with distribution of the freed up frequencies to take place as early as 1Q19. The creation of an autonomous regulatory body, the Federal Institute of Telecommunications (IFT), that also acts as the competition authority, has improved coordination between the public and private sector helping boost service availability and affordability in the process.

While Colombia and Mexico have made impressive strides in broadband access and penetration, the digital divide persists. During the "Capacity Media Central America & Andean" conference in Bogota October 3-4, telecoms executives debated the roles of private vs. public players in the deployment of network infrastructure, as well as perceived bottlenecks and potential incentives to catalyzing further sector investment. In Mexico City, regulators and other stakeholders attending the IIC’s Communications Policy and Regulation Week could be heard contending with how to motivate additional private sector participation in extending their broadband footprint to less commercially viable areas.

In a sense, the ICT infrastructure developments of these two countries can be seen as a microcosm of wider trends at work across the Latin America region.  Just as Colombia and Mexico are focused on the promotion of universal access and alignment public policies to facilitating an increasingly digital economy, other countries in the region have begun to prioritize digital inclusion and broadband connectivity in their national development plans.

With the digital ecosystem across Latin America in continuous evolution, public and private sector players should endeavor to coordinate efforts in order to facilitate a more expansive, higher quality, and more affordable ICT service footprint.  Greater transparency among operators and other broadband players, along with regulatory bodies, will help to bridge the digital divide for both urban and rural populations. Interactive visualization and analytical tools can assist governments, service providers and investors alike to identify coverage gaps, harmonize investment and monitor progress.

It is essential to take advantage of the power of modern digital tools; not only to complement efforts for universal access and higher quality infrastructure, but also to remain relevant in an industry that is rapidly evolving,” noted Judah J. Levine, Chief Executive Officer of HIP Consult.  HIP Consult will continue to collaborate and support stakeholders in the region to more effectively plan, manage, build and commercialize broadband networks in pursuit of greater connectivity and economic growth.

Interested in learning more about our work in Latin America? Contact us at info@hipconsult.com.

InfraNav Takes on Emerging Asia

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During the past several years, HIP Consult has developed a data visualization and analytics platform called InfraNav, which maps, contextualizes and analyzes broadband and other ICT infrastructure across emerging markets. At its core, InfraNav is the largest global database of broadband infrastructure, which includes hundreds of fiber networks totaling over 4 million terrestrial kilometers across 100 countries, and more than 500 ICT facilities.

Over the course of 2018, HIP Consult has focused on expanding InfraNav’s digital infrastructure dataset footprint to 13 countries across South & Southeast Asia. The firm has selected Bangladesh as a “focus” country in the region. In practice, this means that InfraNav now includes extensive fiber optic coverage, data centers, IXPs, towers, schools and hospitals as well as financial services and power infrastructure, which can be layered with up-to-date, granular socio-economic indicators and advanced analytics for Bangladesh.

More broadly, InfraNav expanded its datasets and enhanced its analytical capabilities across many Asian markets to measure “Fiber Reach”, the percentage of a population living within a specific distance to fiber, as well as how far schools or hospitals are to fiber. Another tool that has been launched for the region is “Investment Optimizer”, which enables the comparison of broadband and fiber investment potential across the region.

Clients utilize InfraNav’s one-of-a-kind datasets and cutting-edge analytics to visualize, plan and monetize networks, as well as to determine where investments or solutions may be best targeted, considering existing connectivity infrastructure and localized socio-economics.

For more information about InfraNav or its coverage of other countries in the region, please visit www.infranav.com or contact info@infranav.com for a custom demo.

Paraguay Geo-Analytics Connectivity Study

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HIP Consult recently completed a consulting and data analytics engagement with the Inter-American Development Bank (IDB) exploring cross-border and national fiber connectivity options to bolster the availability, quality and cost of broadband Internet access in Paraguay.  

Expanding broadband Internet access in developing countries has been linked through various studies to boosting national GDP, stimulating job creation, reducing poverty, and abating climate change. With this in mind, Paraguayan policymakers have been exploring mechanisms to stimulate the deployment of broadband networks across the country, with a particular focus on rural areas, while maintaining and strengthening the involvement of the private sector and the level of competition.

HIP Consult’s remit was to develop practical, data-driven insights to help optimize between economic and development objectives and inform national investment decisions.

 Through visualizing and contextualizing connectivity and socio-economic data, geographic zones for potential fiber backbone expansion were identified and prioritized. The project employed spatial clustering, route planning, and optimization algorithms to prioritize infrastructure investment, and deployment for hospitals, schools and government buildings, in particular.

We have been impressed by HIP Consult’s steadfast commitment to delivering meaningful results, particularly its novel approach to applying sophisticated data visualization and analytics to qualifying and addressing real-world problems
— Antonio Garcia Zaballos, the IDB’s Lead Telecommunications Specialist

For more information on the project or the firm’s capabilities, please contact us at info@hipconsult.com.

Digital Infrastructure Initiative

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Recently HIP Consult had the opportunity to visit Togo and Gambia to meet with public and private sector ICT stakeholders as part of the World Bank – International Finance Corporation (IFC) Digital Infrastructure Initiative (DII). DII is a global undertaking spanning more than 50 countries across Africa, Asia and Latin America, which aims to increase access to, and uptake of, broadband Internet and other digital services in underserved markets. 

Leveraging extensive broadband and other ICT-related research across emerging markets, DII considers how the wider ecosystem of infrastructure, connectivity and value-add service providers impact each country’s market structure and competitive environment. This also takes into account regulatory and demand-side considerations in an analysis of broadband assets for insights into potential market gaps and bottlenecks to identify opportunities for greater broadband connectivity.

“By supporting broadband business models that promote shared infrastructure, DII will reduce entry barriers and deployment costs in the telecommunications sector, increase affordability, and enable the development of digital economies.”
— Aniko Szigetvari, the IFC’s Global Head of Telecom, Media and Technology Investments

“Each market faces unique challenges based on its legacy structural, investment and competitive dynamics,” noted Judah J. Levine, Chief Executive Officer of HIP Consult. “This initiative seeks not only to reveal gaps and opportunities across the digital ecosystem, but also to identify practical steps to engage and help expand the reach and affordability of services.”

HIP Consult has supported DII efforts in Africa and the Middle East. For more information, please contact us at info@hipconsult.com.