Wednesday 12 September 2018

Lesotho: First 5G launch in Africa

Lesotho is a small kingdom of approx. 2 million people landlocked by South Africa. According to ITU's Measuring the Information Society Report 2017, this small landlocked country was one of the first African countries to implement sector reform that included establishing a regulator, privatizing the incumbent and introducing competition. This has resulted in some of the highest levels of mobile-broadband coverage in Africa.

There are two mobile providers: Vodacom Lesotho (VCL), a subsidiary of the South African mobile group, which launched in 1996; and Econet Telecom Lesotho (ETL), the country’s incumbent telecommunications operator, which launched in 2002. Penetration is relatively high for the region, with the State of ICT in Lesotho survey reporting that 79 per cent of individuals owned a mobile phone in 2016, including 87 per cent in urban areas and 72 per cent in rural areas. One factor is relatively high 2G coverage that reaches 98 per cent of the population, one of the highest levels in sub-Saharan Africa. The universal service fund has played a role in extending mobile coverage to underserved areas. Mobile-broadband was introduced relatively early in Lesotho, when Vodacom launched its 3G network in 2008. This early start has also resulted in one of the highest 3G coverage rates in Africa, at 100 per cent of the population. LTE was introduced in 2014 and population coverage is high by regional standards, at 69 per cent of the population.

The market share of  VCL and ETL is as shown in the table below:

In 2008, there were 599,500 mobile subscribers in Lesotho, but by 2016 this number had increased to almost 1.9 million – achieving a growth rate of around 216% in eight years. However, while the industry has experienced an exponential growth in subscriptions, there is substantial dominance in the market. As of 2008, Vodacom Lesotho (VCL) controlled around 82% of the market, while ETL controlled the remaining 18%. 

However, ETL seems to be regaining ground as it increased its market share to 23.6% in 2016 (LCA 2016). This has led to a reduction in VCL’s market share to 76.4%. Pricing data from RIA shows that VCL was the most expensive over the period 2013–2015. Then VCL reduced its prices in Q1 2016 to become the cheapest operator.

More recently Vodacom Group has launched Africa’s first commercial 5G fixed wireless access (FWA) network, in Lesotho, while announcing the technology was ready for deployment in South Africa when spectrum is assigned. This service will use 3.5GHz wireless spectrum, previously assigned by regulators to deliver “fibre-like speeds"— a radio frequency with greater ability to penetrate buildings, but lower expected speeds. This is a fixed 5G intended to replace slower, cable-tethered broadband modems, rather than mobile phones.

Initially, Vodacom’s service is delivering roughly 700Mbps download speeds with 10-millisecond latency, slower than the 1-5Gbps download speeds and sub-2-millisecond latency other 5G carriers have been promising. While Vodacom says that it is using standards-based 5G, it claims that its download speeds will improve to over 1Gbps after future software updates and devices.

In a statement, CEO Shameel Joosub talked-up the achievement, but warned Vodacom’s home market of South Africa could not afford to be left behind as 5G rolls out elsewhere.
“What we’ve accomplished in Lesotho is an example of what can be achieved in Africa, should the requisite spectrum also be made available,” Joosub said. “Vodacom will be able to make 5G services available to its customers in South Africa once requisite spectrum is assigned. Global technological advancements are evolving at a rapid pace and South Africa can’t afford to be left behind, particularly when we look at some of the potential use cases for 5G to support critical sectors of our society such as healthcare and education.”

The Independent Communications Authority of South Africa is yet to confirm a date for its 5G auction. South Africa has granted Vodacom a temporary license for 5G testing, but the carrier is not allowed to sell its services there yet, and 5G spectrum approvals elsewhere in Africa aren’t expected for some time.

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