Africa's telecommunications industry would shift from being mainly market-driven to being more policy driven, as certain regulatory steps could improve Internet and broadband access, an industry advisory firm said on Tuesday.

BMI TechKnowledge explained that, while Africa's mobile market had been growing, Internet and broadband penetration rates remained low, and that regulatory interventions could bring down prices, make services available and enable growth.

The firm cited local loop unbundling, access to international gateways, the legislation of Voice-over Internet Protocol (VoIP), as well as convergence, as regulatory trends that could improve the continent's access to Internet and broadband services.

BMI TechKnowledge telecommunications research director Brian Neilson said that fixed-mobile convergence was one of the trends that would start affecting competition within the sector, and would subsequently drive down prices.

"Fixed-mobile convergence is a key trend. A trend we have seen spreading across the continent," said Neilson at a media briefing in Johannesburg.

The liberalisation of the telecommunications sector, of which competition formed an important element, was also said to be making progress in Africa, although a number of the continent's countries had not yet introduced competition in their fixed-line markets.

Neilson noted, however, that many of these countries planned to allow for a second network operator.

South Africa introduced Neotel as its second network operator in 2006 as a rival to Telkom.

Neilson also added that operators in countries such as Botswana, Kenya, Nigeria, South Africa, Tanzania, Uganda were now allowed to enter fixed line, mobile and Internet service provider markets under one unified licence.

BROADBAND - THE NEW GROWTH AREA

Meanwhile, he said that broadband was an emerging sector, with plenty of growth potential. "Broadband is the new growth area which [operators] need to take note of."

He added that different countries would continue to make use of different technologies to deliver broadband to customers.

A recent report showed that more than $6-billion would be spent on submarine and terrestrial fibre-optics cable infrastructure projects in Africa, over the next two years.

Neilson said that Africa could experience a bandwidth oversupply if all the planned submarine fibre-optics cables were to come on stream.

He explained that these cables were designed with a combined capacity of ten terabits a second, while demand from Africa was only expected to reach two terabits a second by 2019.

Nevertheless, Africa did need some of these cables to come on stream so that demand did not outstrip supply. Neilson suggested that not all the cables would necessarily go ahead, and that those that did would come on stream progressively from 2009 onwards.

The implementation of these cables would bring down wholesale bandwidth prices and would facilitate widespread broadband uptake, said Neilson.

The Sea Cable System, the East African Marine System, the South African Infraco, and the Eastern Africa Submarine Cable System were likely to go ahead, while the Uhurunet project was expected to come on stream at a later stage.

Further, Neilson noted that Africa not only needed long-distance terrestrial cables, but also needed to roll out metro fibre infrastructure. African countries could also have to consider infrastructure sharing between operators, in future.

EMERGING DIGITAL MEDIA

Meanwhile, BMI TechKnowledge senior analyst Astrid Hamilton noted that media markets would have to follow the example of the music industry, and be innovative in creating alternative revenue streams and new marketing methods.

Hamilton explained that piracy was a big problem for the music industries with a decrease in CD sales not being offset by digital music sales.

The music industry, subsequently, had to come up with different strategies, for example, pay-to-own or subscription services, to increase its revenues.

BMI TechKnowledge expected digital music sales to form 40% of global music sales by 2012, while mobile advertising would also be bigger than web advertising by 2012.

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