Government Technology

Untapped Internet Market in Africa Offers Exciting Growth Potential


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September 25, 2007 By

The growth rate of Internet usage in Africa is in the double digits. However, such growth has been predicated on a narrow base, with the overall number of Internet users remaining limited. Low penetration rates indicate a huge potential market available for Internet services.

In some cases, Internet service providers (ISPs), with the help of governments, are gradually designing coping strategies around restrictive licensing regimes, poor telecoms infrastructure and low affordability of services. Promisingly, both governments and private telecoms operators are making significant investments in infrastructure. Such initiatives are setting the stage to leverage the exciting growth potential of the African Internet market.

"The African Internet services market is growing," notes Frost & Sullivan research analyst Spiwe Chireka. "Most governments have embarked on ICT-led development strategies, aimed at developing e-governance and, subsequently, Internet penetration."

Markets such as Kenya, Tanzania, Uganda, Senegal, Angola and Mozambique are set to enjoy high growth levels, given their technology neutral licensing regimes, independent regulators, high levels of FDI and highly liberalised markets. Ghana and Nigeria have high growth potential but this is hindered by poor economic performance and poor licensing regimes, which have limited foreign investment into these markets.

Currently, the main factors dampening uptake are the widespread poverty that makes Internet services unaffordable, the low literacy levels that are limiting demand and the high operating costs that continue to keep Internet service prices high. Moreover, poor telecoms infrastructure is hindering penetration rates even as the restrictive regulatory frameworks contain market growth.


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