As digital technologies advance and become more ubiquitous in today’s connected world, data is an increasingly valuable commodity.
While the western world is seemingly taking the lead to fulfil the ever-growing needs of data consumers, other less developed areas of the world have, so far, not even been considered as being ‘in the race’. However, times are changing, and data connectivity is slowly becoming a key export and source of revenue for these emerging countries.
While it may seem that everyone is constantly connected these days, there are areas of the world where this is not the case…yet. For example, the southern hemisphere is currently known for having some of the lowest levels of connectivity in the world. But, all that’s about to change. So, how important is this region likely to be for the connected world of tomorrow?
The importance of expanding networks
Since the first submarine cable was placed between the coasts of England and France in 1850, underwater networks have been an essential part of communications. Subsea systems now stretch hundreds of thousands of kilometres across the globe, carrying 98% of international data traffic and enabling the everyday activities we take for granted, from music streaming, email sending and Netflix watching.
But, the use cases go way beyond the consumer. In fact, whole sectors have grown as a direct result of these technological advancements, meaning we can now quickly and easily transfer huge amounts of important or sensitive data to anywhere in the world. Excitingly, the growth of the data services industry has not even reached its peak. With the global population expanding constantly and 5G capabilities already in development, the worldwide demand for data can only grow further. This opens the door for new innovators to emerge and succeed.
For example, new routes in the South-Atlantic are a current focus: there has been $1.5 billion of new cable investment in Latin America (LATAM) in 2017 and 2018. These new routes will have increased capacity for data consumers and will also provide the opportunity for a massive economic development in unexpected places.
Creating new paths
The Broadband Commission for Sustainable Development has set targets to increase internet user penetration in developing countries by 2025. These objectives include increasing the world population using digital financial services to 40%, overcoming the disconnectedness of micro-small and medium sized enterprises by 50% and increasing broadband internet user penetration to 65 % in developing countries and 35% in the least developing countries.
In order to achieve these goals, emerging countries, such as those found within the southern hemisphere, must take the lead. To accelerate the speed of transformation and take a leading role in creating new paths, companies from these developing countries can become ‘ones to watch’ by pulling IP gravity south from the USA into South America and creating new traffic paths via Africa to Asia and beyond.
Africa: A gateway to the rest of the world
Africa is a prime target location for new data hubs, and is perfectly placed to become an active contributor to the global telecommunications highway. This is because, in connectivity terms, Africa is uniquely geographically positioned to connect with existing networks which already link to America and Europe. The companies willing to take advantage of this ‘missing link’ in connectivity will finally enable innovation in traffic management across the Atlantic.
From there, the door to the rest of the world is open. By developing an ecosystem that allows for local IP traffic to be exchanged locally and regionally, the efficiency of networks that are serving the southern hemisphere would be improved. Even regions beyond the Atlantic would benefit, with an alternative to the highly congested Suez channel giving a new route to American and European-bound traffic originating from Asia and even an alternative to East African countries. Other than the obvious potential for financial gains, companies and individuals in these regions would benefit from an increase in connectivity, capacity and data exchanges.
Such a system would allow interconnectivity amongst submarine systems and operators as well as OTT providers and CDN´s to quickly reach multiple networks. Further expansions in future would enable other major points across the Atlantic and emerging markets to be connected at a later stage. New investments will also offer route diversities and cut down latencies on major routes. As a consequence, it will facilitate greater and faster traffic flows between metropolitan areas across the globe.
This improved connectivity and capacity, pushed forwards by new, international wholesale carriers will not only stimulate digital commercial activity in the southern hemisphere, the rest of the world stands to profit too. However, while many global content providers in locations such as the US are renowned for leading these developments, African nations are not traditionally known for being thriving hubs for global IP transit and internet innovation. As data connectivity becomes an increasingly valuable commodity, however, developing nations will take a new role enabling global companies to shift their attentions to these new regions and markets.
Emerging countries hoping to play a more prominent role in international connectivity and data markets will need to overcome current stereotypes and prejudices. While not impossible, this transition is going to take time. The fast-paced nature of the technology landscape is something all telecom operators need to contend with in their home territories. However, those from emerging or developing countries have the additional challenge of conquering the issues caused by a lack of both local content allocations and reliable (IP) telecommunications capacity.
In order to meet targets for increased user penetration in developing countries in the next few years, these locations will need to lead by example and embrace the opportunities new technologies bring. Continued exponential demand for data means that with the right investments, these new providers have the potential to take the lead in the market for this precious, up-and-coming commodity. This, in turn, will accelerate digital transformation, create successful, profitable digital economies and change traffic management regimes globally.