U.K.-based broadband service provider Augere has entered the east African broadband market in Tanzania, Rwanda and Uganda, with the largely untapped rural market in Africa becoming more attractive and economically viable to service providers.
The East African region is being used by the company as a stepping stone for further investment in other regions of Africa in a bid to meet the demand for broadband services.
Augere, operating under the brand name QUBEE, has commercially launched in Rwanda to offer fast broadband Internet services, while in Tanzania, the company has been granted a spectrum license. In Uganda, the testing of the company's network is already in place and it may soon start offering services.
African telecom analysts believe that the arrival of Augere will stimulate competition that is expected to bring down the cost of broadband services.
"We are more likely to see much more of aggressive investment in the broadband market as companies compete for customers. The competition will force down the prices," said Edith Mwale, a telecom analyst at Africa Center for ICT Development, in a telephone interview.
The Africa region is experiencing faster than expected mobile phone communication growth, but internet penetration has remained low, prompting international broadband service providers to enter the market.
Mwale said there has been insufficient broadband penetration in Africa because many countries in the region have yet to formulate broadband policies to regulate and stimulate usage at every level -- national, provincial and municipal.
The region has a number of undersea cables aimed at delivering broadband services, but most rural areas are still unconnected to broadband Internet services, while in some areas connected, broadband Internet access has remained prohibitively expensive.
African governments are also pushing for reductions in connectivity prices to allow more people to access the Internet. Kenyan President Mwai Kibaki last month directed that the cost of broadband connectivity be significantly reduced there. Governments in the region hope to use broadband capacity to transform their economies.
Broadband services are expected to improve Africa's telecom sector as more countries move to implement e-governance, e-learning and e-health programs, which have been hindered by the region's insufficient broadband infrastructure and capacity.
Global CEO of Augere David Venn said in a statement Tuesday that the launch of broadband services in Rwanda and the acquisition of the license in Tanzania greatly increase the opportunities for people in the region and for Augere business.
Augere's principle shareholders include France Telecom and Vedanta Opportunity Fund.