International Internet Bandwidth and Pricing Trends in Africa Patrick Christian August 22, 2017

Inter-Regional Internet Bandwidth, 2017 The Global Picture Inter-Regional Internet Bandwidth, 2017 2013 Latam-US became highest capacity regional route over Europe-US (Latam transit to US/content) and private networks dampening trans-atl growth. Top routes in terms of capacity – US-Europe, (number one still london-ny but now Latam-US next 2 Miami-Rio & Sao Paolo Latam-US big bcs only inter regional route Latam similar to Africa – 80% of international capacity is connected to US Intra in Latam grew 70% to 18% of capacity

Global Growth Stable International Internet Bandwidth Global Growth Annual growth used to be low 40s (doubling every 2 years) last 4 years in low 30s. Due to: Private networks – CDNs and cloud service providers, changing traffic patterns, localizing traffic. Trans-atlantic & trans-pacific used capacity now majority private network, dampening intl internet growth

Content Provider Capacity Growing Used International Capacity by Source 2002-2016 Internet capacity has 5 year CAGR at 31% Content provider capacity 76% Total international capacity at 45%

Content Provider Traffic Share of Used Bandwidth by Category for Major Routes, YE 2016 Main East-West routes 50-75% content provider traffic (US-Europe-Asia) North-South routes 5-20% content provider traffic (US-Latam, Eur-Africa) Trans-Atlantic majority content 70% Trans-Pacific over 50% Euro-Africa almost 10%

10G Wave Prices Dropping Fast Median 10 Gbps Wavelength Price Trends on Major Intl Routes Each line represents the median monthly lease price for an unprotected 10 Gbps wavelength on the listed route. Prices are in USD and exclude local access and installation fees.

IP Transit Prices Continue to Drop Median 10 GigE IP Transit Prices in Major Global Cities Each column represents the weighted median monthly price per Mbps in the listed city. The line represents the decline of the median price calculated as a three year compound annual growth rate. Prices are in USD and exclude local access and installation fees. 10 Gigabit Ethernet (10 GigE) = 10,000 Mbps. While 10 GigE is the predominant unit of wholesale IP transit transactions in many regions, high capacity sales have just started to emerge in Africa. Sales are limited to major markets such as South Africa and Kenya, where median 10 GigE port prices were $24 per Mbps in Q2 2016. now $9 with market price as low as $5

Global IP Transit &Wave Prices Weighted Median 10 Gbps IP Transit & Wavelength Q2 2017 Notes: Each line represents the weighted median monthly lease price for an unprotected 10 Gbps wavelength on an individual route. Each circle represents the weighted median monthly price per Mbps for a 10 GigE IP transit port in the listed city. Routes and cities are shaded corresponding to price, from least expensive in blue to most expensive in red. Prices are in USD and exclude local access and installation fees. 10 Gbps & 10 GigE = 10,000 Mbps.

Submarine Capacity

2017 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.telegeography.com | info@telegeography.com

Proposed Before 2009 only 16 countries with sub cable landings YE 2016 33 countries Guinea Bissau, Eritrea, Western Sahara only countries w/o landings, plans for GB for next year Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.telegeography.com | info@telegeography.com

Africa is the Fastest Growing Region International Internet Bandwidth Growth by Region, 2012-2016

Capacity Growth in Africa International Internet Bandwidth Growth - Africa Annual Growth 53% almost 6Tbps

Growth in Sub-Saharan Africa Int’l Internet Bandwidth Growth – Sub-Saharan Africa Annual Growth 69%

Connected to Europe Major International Internet Routes in Africa, 2017 Only intra-African above 50Gbps SA – Zimbabwe 2016 2017 – COUNTRY-TO-COUNTRY routes (aggregate the city-to-city routes)

Europe Hub Not Just for Africa Regional Capacity Connected to the U.S. & Canada, 2006-2015 North Africa continues to climb, 98% to Europe

Intra-Africa Connectivity Growth Share of Africa Int’l Internet Bandwidth by Region, 2013-2017 Intra-Africa – 9% to 15% Africa 2013-2017 CAGR 106%?? Europe 46%

Intra-African Routes Major International Internet Routes within Africa, 2017 >1Gbps New growing hub CdI, Djibouti Algeria & Tunisia all to Europe

Transit and Transport Pricing

Transport Prices STM-4 Median STM-4 Monthly Lease Prices in Africa, Q2 2017

Median Prices 10 Gbps Waves Johannesburg-London Q2 2014 – Q2 2017

Regional Transit Prices Median STM-1 IP Transit Prices in Africa, Q2 2017

Data Centers

Carriers Exchanging Traffic Colocation Floor Space Colo floor space proxy for location of exchanged traffic (check legend) Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.telegeography.com | info@telegeography.com

Linking Content and Applications Major Content Provider Data Center Locations, 2017 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.telegeography.com | info@telegeography.com

Cloud Data Centers & Direct Connects Will update to reflect 2018 with Azure in S Africa

Outlook - Some Numbers 44% vs 30% - Africa vs Global - Int’l Internet bw 417m to 541m - 3G subs – 2016 - 2021 37m to 201m LTE subs – 2016 - 2021 51% vs 25% - peering vs transit growth Africa vs Global intl internet bw growth year? CAGR 2017-2023 3G – 34% to 40% pop penetration 2017 vs 2021 LTE – 3% to 16% pop pen 2017 vs 2021 Peering vs Transit cagr 2017-2023 Africa CAGR

Merci! Patrick Christian pchristian@telegeography.com