LAGOS – The expansion of Africa’s fibre optic infrastructure may be at risk, as concerns over return on investment are dampening investor enthusiasm, telecom operators warned at the Hyperscalers Convergence Africa conference in Lagos.
Despite the continent's increasing demand for high-speed internet, investors have been hesitant to commit to fibre projects, particularly in rural areas, due to uncertainty about profitability. Reuben Oshomah, Regional Director of West Africa for Avanti Satellite Communications Ltd, highlighted these concerns during a panel session, noting that fibre deployment requires significant capital investment, making it challenging for investors to justify the expense.
“The limitations of fibre deployments and terrestrial infrastructure are clear,” Oshomah said. “It’s expensive, challenging, and requires sufficient demand to justify investment. If I were an investor, I would question the return on investment, potential revenue streams, and overall profitability.”
Oshomah further explained that this reluctance is particularly pronounced in regions with low income, where investors do not see a clear path to profitability. Africa currently accounts for just 0.02% of global fibre infrastructure, with Nigeria having around 35,000 km of fibre, according to the Ministry of Communications and Digital Economy.
While fibre deployment remains a challenge, satellite technology is emerging as a more viable option for expanding internet access across the continent. A report from Space in Africa noted that as of June 2023, African nations had invested over $4.7 billion in 58 satellite projects. Oshomah emphasized that integrating satellite technology with fibre optics could dramatically improve connectivity in remote areas, offering a solution where fibre alone falls short.
“There has been considerable effort to expand fibre connectivity across the continent, yet a large portion of the population remains without access. Satellite technology, which has long been overlooked, is vital in bridging this gap,” Oshomah added.
Over the past five years, advancements in satellite technology have shown promising results in Nigeria. Oshomah highlighted that, through satellite connectivity and partnerships, Avanti Satellite Communications has reached nearly four million people across 26 to 27 Nigerian states in just three years.
The conference convener, Temitope Osunrinde, noted that despite Africa housing a significant portion of the global population, the continent’s digital infrastructure remains inadequate. Africa's fibre connectivity accounts for only a small fraction of global infrastructure, despite nearly one-fifth of the world’s population residing on the continent.
Josephine Sarouk, Managing Director of Bayobab, also stressed the critical role of submarine cables in improving Africa's digital infrastructure. She pointed out that the rising demand for high-speed internet, driven by content creation, streaming services like Netflix, and the need for reliable connectivity, makes investment in submarine cables essential for meeting the continent’s growing online population.
Investments in both fibre and satellite technologies, along with submarine cables, will be critical to ensuring Africa's digital infrastructure can support its expanding population and increasing demand for high-speed connectivity.
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