Internet interruptions resulting from damaged undersea cables along the West African coast last week revealed the precarity of the continent’s digital infrastructure and the economic turmoil it may cause.
Undersea cables account for about 99% of the world’s internet needs.The Internet World Statistics reports that West Africa has a penetration rate of 43.2%, a growing figure that highlights the need for reliable and protected cable infrastructure. The Nigerian Communications Commission (NCC) has reported that connections have been partially restored as engineers off the Abidjan coast sought to repair the cables.
Major telecommunication companies operating in West Africa and South Africa announced network outages in various countries they operate in after the WACS, SAT3, and ACE cables were reportedly damaged. Currently, nobody has ascertained what caused the damages even as the inquiry rages on.
Data from the West Africa Telecommunications Regulators Assembly shows that the mobile industry contributes more than $70 billion to the region’s GDP by boosting startups and ICT solutions. The Global System for Mobile Communications Association (GSMA) predicts that telcos’ revenues in the region will soar to $18 billion by 2025. This goal may face hindrances if communication networks continue facing unexpected disruptions, pushing customers to seek alternatives.
“Recognizing the critical importance of network reliability, we work to continuously strengthen our infrastructure to mitigate future disruptions,” said MTN in a statement.
Impact on the Banking Sector
The International Cable Protection Committee (ICPC) in 2005 warned that undersea cable cuts could lead to $1.5 million worth of losses every hour in the banking industry. Globalization has delocalized the sector with the Internet streamlining transactions within the shortest time possible.
West Africa is home to some of the continent’s biggest Pan-African banks such as EcoBank and Access Bank. Customers only need mobile devices to make transfers wherever they are. With cellular networks facing interruptions, banks had to scale down operations on their digital platforms until restorations were made. Every minute matters in the world of digital banking and hours of an internet outage could affect the day’s stock performance.
Many banks apologized for the disruptions on their digital platforms and advised customers to seek alternative means like ATMs. However, the rise of digital banking across Africa suggests that the modern economic ecosystem cannot allow such luxury of time and effort in completing transactions. If the undersea cable interruptions become common in the future, the banking sector could be staring at impending losses and depreciating market share.
Commercial Sabotage
When Taiwan experienced an earthquake in 2006, undersea cable damages caused great economic turmoil in Southeast Asian countries. It took 49 days to repair the cables, causing regional trade to lag. Moreover, it is costly to repair magnanimous damages cratering revenues for service providers.
Internet outages in Africa last week affected social media networks and e-commerce platforms. Modern supply chains are influenced greatly by access to the internet. A shutdown could break the link between manufacturers and retailers across the continent. Many informal businesses have resorted to social media advertising, popularizing their goods and services online and attracting customers countrywide and even beyond their borders.
Startups like Fintech and logistics apps have made payments and deliveries easier across the continent. As internet reliance grows, enterprises are maximizing profits through the power of the internet. Outages can cripple connections and render these innovations unhelpful and predisposed to failure. This could drag the African continent back to the commercial dark age as nations and regions remain isolated.
The reliance on undersea cables has raised concerns about terrorism. To impair global trade and communication, terrorists can easily interfere with internet infrastructure under the sea. African maritime authorities are expected to share resources and efforts to combat possible cases of sabotage.
Many countries that were affected by the cable cuts rely entirely on unilateral cables. By diversifying internet sources, countries can evade the economic losses that abound when severe cable cuts occur. Debate has shifted to prioritizing Satellite internet with providers like Viasat and Starlink making inroads into the continent’s broadband network. However, affordability remains a problem. Installing Starlink in Kenya would require close to Ksh. 100,000 with monthly subscription rates peaking at Ksh. 6,500.
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