The recent connection linking Senegal to the ACE (Africa Coast to Europe) submarine fibre-optic cable should significantly increase bandwidth for high-speed internet and mobile telephony and respond to rapid growth in demand for these services. The project's first phase was completed in December 2012, with Senegal connecting in January. The cable now stretches 12,000 km, linking France, Portugal and 11 West African countries.
The ACE cable is the third major submarine cable with a landing in Senegal, complementing the South Atlantic 3-West Africa Submarine Cable (SAT3/WASC) and the Atlantis 2 cable. Before this year, Senegal relied primarily on the SAT3/WASC, which has a capacity of 340 gigabits per second (GBps); the Atlantis 2 is even more limited, with a total potential capacity of 160 GBps. The ACE submarine cable, however, will considerably expand access to high-speed internet and data services, with a minimum capacity of 5.12 terabits per second (TBps).
The increased capacity should help to improve both the connection quality and accessibility of data services in Senegal. At the January launch of the new cable, Cheikh Bamba Dièye, the minister of communications, telecoms and the digital economy, said Senegal has high expectations for the new bandwidth, stating that the ACE cable should help respond to a growing market of mobile internet users and develop the digital economy.
Expanded internet access bodes well for growth in the telecoms sector, as demand for mobile internet services is increasing rapidly. Senegalese operators added a total of 179,573 mobile subscribers in the third quarter of 2012, pushing the market size to 10.89m subscribers as of September. The mobile penetration rate rose from 88.01% at the end of June to 89.49% at the end of September, up from 79.13% in September 2011.
Mobile subscribers currently represent a growing majority of overall internet users in Senegal. While 3G subscribers accounted for just 28.5% of total internet users in June 2011, this increased to 71.1% of the total market as of June 2012. The volume of 3G subscribers grew by 8.4% over the third quarter of 2012 to reach 406,982 by the end of September.
Internet prices are expected to decrease as competition heats up. The leading telecoms provider in terms of subscriber numbers, Orange Senegal (Sonatel), will not have unique access to the new cable, as it did in the past with the SAT3/WASC. The $700m ACE cable was funded by an international consortium of operators, including buy-ins from both Sonatel and Expresso, the smallest of Senegal's three mobile providers by market share. As of the end of September, Sonatel held a 62.9% market share of mobile subscribers and Expresso held 12.8%. The telecoms market is rounded out by second-place Tigo Senegal, which held 24.3% of subscriptions, according to Telecompaper, an industry research and publishing company.
The buy-in from both Sonatel and Expresso will allow the two firms direct connection to the cable. Previously, Sonatel oversaw access to international connectivity, which limited price movement both on the wholesale and retail side. Direct access will allow operators to bundle voice, message and data services at a lower cost, potentially increasing market competition.
The ACE cable should also help to ensure the reliability of internet connections by diversifying the country's internet link-ups. Both voice and data connections were severely impacted by a 24-hour service interruption in December due to an unspecified "temporary dysfunction" of the SAT3/WASC cable, according to statements by the sector regulator, the Regulatory Agency for Telecommunications and Posts (Agence de Regulation des Télécommunications et des Postes, ARTP). Sonatel, the primary internet provider, lost an estimated 77% of internet connectivity and 23% of international voice connectivity between December 18 and 19, which had a significant impact on the domestic market, given Senegal's reliance on the SAT3/WASC.
Finally, the addition of ACE's capacity should help to boost the availability and use of online services, in line with the government's plan to develop the digital economy. Officials at the Ministry of Communications, Telecoms and the Digital Economy (MCT) have indicated that cloud computing, e-government, and online health and education programmes are included in the long-term strategy. In late January, the MCT and the Ministry of Health announced a partnership to introduce tele-medicine services in an effort to improve connectivity among medical centres nationwide and disseminate health information to the public.
Senegal's digital economy is still in its nascent phase, but the recent increase in bandwidth should help to expand both the mobile and fixed internet usage in the medium term.
© Oxford Business Group 2013
