Venture capital and private equity investors believe increased innovation in the delivery of internet connectivity in Africa will help drive dramatic expansion in connecting the continent, new research from blockchain-based mobile network operator World Mobile shows. Independent research company PureProfile interviewed 100 senior private equity and venture capital executives based in the US, UK, Saudi Arabia, the United Arab Emirates, France, Germany, Hong Kong, and Singapore in June 2022.
Its global study found that 78% of venture capital (VC) and private equity executives say innovative approaches by new firms is the biggest factor in improving connectivity in Sub-Saharan Africa, where only around 28% of the population (GSMA | The state of mobile internet connectivity in Sub-Saharan Africa: why addressing the barriers to mobile internet use matters now more than ever | Mobile for Development) is connected to the internet. But failure to support innovation risks improvements to connectivity stalling.
The need for innovation is demonstrated by the research – around 70% of VC and private equity executives questioned said a lack of infrastructure for traditional telecoms is holding back connectivity, while three quarters (75%) pinpointed a lack of innovation among traditional suppliers.
But the study with senior VC and private equity executives across the UK, US, the Middle East, Singapore, Hong Kong, France, and Germany shows they are optimistic - 86% expect improvements over the next five years with 59% predicting dramatic improvements.
That will translate into increased investment by venture capital and private equity firms over the next five years – 83% say improved connectivity will increase investment with more than half (53%) predicting dramatic increases as more people become connected.
World Mobile is one of the major innovators revolutionising internet connectivity in Africa and working with the government in Zanzibar. Its innovative solution includes launching a unique hybrid mobile network delivering connectivity supported by aerostats backed up with a range of technologies including mesh networking, hybrid spectrum, renewable energy, and blockchain. It plans to expand the network throughout the continent and is in discussions with government officials in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.
VC and private equity executives believe that the factors below are holding back connectivity in sub-Saharan Africa:
Lack of innovation 75%
Poor infrastructure 70%
Lack of investment 64%
Bureaucracy/red tape 63%
Lack of political stability 28%
Micky Watkins, CEO of World Mobile says: “Improvements in internet connectivity and increased investment go hand in hand as the research demonstrates, with venture capital and private equity firms more willing to invest the more that connectivity improves.
“That said, there are hurdles to cross to achieve improvements in connectivity and a lack of infrastructure and innovation from traditional providers is a major issue identified in the research. But increased innovation backed by investment will help drive connectivity and more investment in the economy as a whole.
“The importance of internet connectivity will only grow in the future particularly for areas where delivering affordable and reliable connectivity remains an issue. World Mobile’s network based on the sharing economy sells affordable network nodes to local business owners, so they have the power to connect themselves and others while sharing the rewards. This will enable more people to access the opportunities that internet connectivity creates.”
World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide a digital connection to people and is the first step in its mission to help bring nearly 3 billion people online before 2030 in line with the UN and World Bank’s SDGs.
World Mobile’s hybrid network takes a more sustainable approach than that of legacy mobile operators, offering innovative solutions to environmental, social and governance concerns. By using solar-powered nodes, second-life batteries and energy-efficient technology, the network mitigates its environmental impact. World Mobile also facilitates positive and sustainable societal growth through the application of its “sharing economy”, where locals share in the ownership and rewards of the network.
By Phil Anderson, Perception A.