According to recent statistics, over 4 billion people still lack internet access, or at best, a sufficiently reliable connection.
Of those who do, a large proportion still experience limited capacity, which means they suffer restricted usage. Unsurprisingly, in most cases these individuals are concentrated in developing areas of the world.
Having recognised this potential, the Broadband Commission for Sustainable Developmenthas set targets to increase broadband internet user penetration to 65% in developing countries (from 39% in 2016) and to 35% in the least developing countries (from 15.6% in 2016) by the year 2025. For the companies willing to seize this opportunity and make the most of this gap in the market, the provision of connectivity to these areas could bring huge benefits in the form of economic advancement of new, emerging markets. So, how do we turn these proposed set of goals into a reality? And who should be taking the lead?
Making the digital opportunity a reality
The world’s telecommunication and internet giants would typically be expected to have a central role in delivering these ambitious targets. However, there is also a huge chance for emerging countries to take the lead on this challenging opportunity. For those countries willing to do so, the economic benefits would arguably be more meaningful and, ultimately, more rewarding.
The digital revolution has already had an incredible impact in countries like China, resulting in the development of two of the world’s newest internet giants: Alibaba and Tencent. Many other emerging countries have witnessed this growth and wish to follow this example and emulate it in their own regions.
In order to do this, emerging areas of the world face certain challenges. For new regions to scale operations and achieve the economic benefits offered by reliable internet access, significant investment is required. However, alongside this, it is important that extending internet access to the developing world is thought of in broader terms than just being a connectivity issue.
Finding funding for connectivity
Despite calls for improved connectivity in the global south, the developing countries within this region often lack the legacy infrastructure, such as the global submarine cable, to support the demand. Developed countries have a 150-year head-start on infrastructure.
Due to their pivotal role in connectivity, there is an increased demand for submarine cables to provide adequate speed, capacity and low latency that developing economies currently lack. However, in order to meet this growing demand, significant funding is undoubtedly required.
That said, access to investment is not the hurdle one might expect, with funding and expertise to build these cables coming from a wide variety of sources. In 2017 and to date in 2018, $1.5 billion of investment has been made in Latin American (LATAM) submarine cable routes. For the most part, these new routes are being developed in an area which is currently known for having some of the lowest levels of connectivity in the world: the South Atlantic.
Examples of submarine cables with investors include the PEACE cable from Pakistan to East Africa, which was built by Huawei Marine Networks. China’s State Owned Enterprises has partnered to invest in this cable and it is part of a comprehensive Belt and Road initiative, which is seeing Chinese companies building multiple infrastructures throughout Africa, Asia and the Middle East. Other investors in submarine cables are OTT companies. For example, the Monet subsea cable, which connects Florida in the USA, to Brazil in Santos, São Paulo and Fortaleza.
There are also various developing countries and companies from within the global south which are investing in such connectivity. These new players see an opportunity to gain more control over the cable networks and potential for increased economic development efforts in the region. One example of this is Angola Cables’ own South Atlantic Cable System; the first subsea cable directly connecting South America and Africa with 40Tbp/s.
As connectivity grows in developing markets, new connectivity routes will emerge across the globe. However, these connections must be used to their full potential to have an impact on economic growth in the developing world
Submarine cables as a springboard
While better connectivity in developing regions is a real achievement, the potential to stimulate untapped economic growth needs to be seen as an additional goal. The key to realizing this kind of goal is to see data as a commodity.
As internet usage becomes more prolific in the global south, content usage will similarly increase. Countries in this region need to take a more central role in this progression in order to stay more in control of their role within international data markets.
This, however, is easier said than done. Technology is a fast-paced industry and the rate of change can be difficult for telecoms operators to keep up with. Countries within developing regions also have additional hurdles to overcome, including a lack of reliable IP telecommunications capacity and a lack of content allocations locally.
Due to these challenges, emerging regions should consider cabling infrastructure as only part of the puzzle. One way to approach the remaining conundrum is to consider building data centre infrastructure in local markets as a complementary measure to subsea cables. In order to improve the efficiency of networks serving the southern hemisphere, an ecosystem that allows for IP traffic to be exchanged locally and regionally needs to be developed.
There is also potential for motivated providers to seek out international opportunities. Developing infrastructure for data centres, colocation and data exchange points, telecoms leaders in developing regions will be better placed to provide for the growing demand for data, not just in their own regions but much further afield too.
Such an approach will enable future interconnectivity with other submarine cable systems and as such, Content Delivery Networks (CDNs) and Over-The-Top (OTT) providers will be able to reach multiple networks more quickly. In terms of evening up the unequal nature of the current connectivity divide between the northern and southern hemisphere, this method will go a long way.
Taking on this new role will allow developing nations to take a prominent role in digitally transforming the global south and help global companies overcome prejudices they may have previously had. By shifting the attention of companies in the northern hemisphere to the developing world, there are possibilities for new market expansions which go beyond the immediate benefits of connecting the global south.
From basic pipes to big data
For telecoms providers in developing countries to go from a basic pipes model to a big data business model, the first step is creating products that meet international expectations.
Meeting such high standards means having an evolved product portfolio including a cable capable of transmitting 100 wavelengths and a bandwidth of 100Gbps (gigabits per second). However, it also means incorporating additional IP services alongside these more traditional ones. For example, IP peering, IP transit, PNIs, SDN services, MPLS services and international multi-homed IXP reselling.
Combining features such as low latency with network, IP, IaaS and security services can cut data traffic time and costs considerably. In this way, subsea networks and complementary international data centre infrastructure open up new commercial opportunities for providers in emerging countries.
Markets with potential for high growth in both the northern and the southern hemispheres will enable growth of cost-benefit-based business models in urban regions as well as development of CDN and OTT ecosystems. This will also make targeted distribution of applications and content much easier in their own regions.
Adopting a more international perspective also influences how organisations should function. Providers must to be able to serve international OTTs and Internet Service Providers (ISPs), meaning support for customers must be provided by staff who are both committed to delivering network monitoring in real-time and who can provide support in numerous languages.
Start with local acceleration for international growth
Developing profitable and successful digital transformation in economies which have such an international outlook requires local acceleration in the first instance. If targets for increased user penetration in emerging countries are to be reached within the next few years, these countries will need to take the lead and welcome the new opportunities which new technologies enable.
In order to amplify this potential, however, these countries also need to take on a more international outlook. There is an ever-increasing volume of global data traffic, and with this comes requirements for the infrastructure which facilitates this and a need for supporting management of the exchange. In order to have a chance of catching up with the northern hemisphere, developing countries in the global south will need to actively play more of a significant role in supporting the demand for data.
Currently, there are numerous well-known, US-based content providers with a global reach, but up-and-coming international wholesale carriers in developing countries are becoming the “ones to watch” by creating new ‘data hubs’ in unexpected places. Demand for data is continuing to grow exponentially, meaning that with the right investments, these new providers have the potential to both drastically change their local economy and shift the balance of power within traffic management at a global level.