Open-Source Solutions as a Way to Reduce the Cost of Connectivity in Africa
Africa has shown good momentum in the telecom industry in recent years and is generally one of the most dynamically developing regions in the world. In 2022, subscriber penetration in Sub-Saharan Africa was 43%, and by 2030, it is expected to increase by almost 50%, from 489 to 692 million, while CSPs’ revenues and investment will grow from $48 to $58 billion. Also, smartphone adoption in the region is predicted to expand from 51% to 88% in 2022-2030. African countries are actively launching digitalization processes, which is in line with the African Union’s Agenda 2063, and telecom is the foundation for the growth of the digital sector. However, despite a universal desire to build a digital economy, there are obstacles to realizing these intentions. In this article, we look at factors affecting the development of mobile connectivity in the region and open-source technologies as a way to overcome the major cost-related challenges.
Factors Affecting Digitalization in Africa
Primary factors influencing digitalization in the African region include problems with the development of digital infrastructure, a shortage of accessible and affordable connectivity, a lack of experts for digitally enabled industries, insufficient regulatory and policy environments, and cultural features.
However, one of the primary problems with the digitalization of Africa is the extremely high cost of connectivity. African countries are amongst the regions with the highest prices of mobile data: in 2023, one gigabyte of mobile internet in Sub-Saharan Africa amounted to $3.31, and in Northern Africa, it was $0.86 on average. In general, the price of broadband Internet services is about 3% of the monthly gross national income (GNI) per capita globally; in Africa, it is estimated almost at 15%. According to the International Telecommunication Union (ITU), Internet prices are considered affordable when they are equal to or less than 2% of GNI. High connectivity costs arise due to low purchasing power, a common reason in low-income countries, but also due to insufficient telecom infrastructure, electricity problems, old technologies, and high costs of network and IT infrastructure maintenance and support.
Finding a Way to Cost-Efficient Connectivity with Open-Source Technologies
As stated by key stakeholders and policymakers, the problem of expensive connectivity should be resolved as soon as possible, as it hampers integration and economic processes strongly required by the continent's countries. One of the potential strategies to achieve this goal is to reduce the price of network and IT solutions in the region. On that front, African telcos have been traditionally relying on international telecom vendors known for costly licenses, expensive services, and long waiting time for modification requests. The ultimate result is the increased price of service for both end users and enterprises. Furthermore, many local communications service providers (CSPs) have long-lasting relationships with one or several specific vendors — as a result, they are restricted in their technological choices and have to build new services on siloed grounds.
One of the most expensive parts of vendor solutions is the cost of included third-party licenses, such the ones for hardware, virtualization, operating systems, and DBMSs. According to our estimation, they can account for up to 40-50% of the final price. However, most of these solutions, for example, Oracle DBMS, have open-source alternatives on the market. Open-source analogs help reduce the total cost of ownership (TCO) while also minimizing vendor lock-in risks for a CSP. At Nexign, we have been actively utilizing open-source technologies in our solutions for a long time. For example, last year we announced a new generation of our Nexign BSS, a databased-agnostic digital BSS. To run our billing system, CSPs can choose any core DBMS that works best for them in terms of their budget and overall IT strategy, such as Oracle, PostgreSQL, or even our own enterprise-grade RDBMS based on PostgreSQL — Nexign Nord.
Open-source solutions are often associated with a lack of reliable support, security, and fault tolerance problems — these are critical requirements for any carrier-grade system. To address these issues, we adhere to three important principles. First, before including any open-source product in our IT stack, we conduct its thorough internal functional and non-functional audit. Second, we guarantee extended support for the client. Finally, we refine open-source solutions to confirm that their security and availability parameters meet the CSP’s requirements. This approach lets us ensure that we develop reliable products that can be trusted by CSPs while reducing their costs and minimizing lock-in risks.
For example, we have been migrating BSS components of one of the leading European CSPs from Oracle DBMS to Nexign Nord RDBMS. The goal was to reduce our client’s dependency on imported software and improve its technological agility. The CSP serves tens of millions of geographically distributed subscribers, so their key requirement was to avoid any service interruption and impact on customer experience during the migration. Based on the project results, Nexign estimated that Tier 1-3 CSPs could reduce costs on third-party licenses by 10 times when shifting from expensive DBMSs like Oracle to open-source-based alternatives like Nexign Nord.
For data synchronization between Oracle and Nexign Nord and quick rollback without data loss in case of accidents, we used our equivalent of Oracle GoldenGate — Nexign Data Integrator, a universal low-code ETL+ platform for data transformation.
Along with the obvious cost savings from using open-source technologies, there are other optimization opportunities that CSPs sometimes overlook, such as RCAF. RCAF collects data on congested base stations and affected subscribers and then sends it to PCRF to optimize network performance. As a result, the CSP can manage congestion issues at a software level without investing in network expansion, new RAN components, and licenses immediately. In addition to increasing the network efficiency, one of our customers is using Nexign RCAF to improve the control over the quality of experience for its high-paying subscribers. If the network is congested, RCAF and network policies ensure premium customers are unaffected.
The software for 4G/5G network functions can be based on open-source technologies without compromised performance, flexibility, and reliability. This year, one of the leading CSPs in Eastern Europe, serving a multi-million subscriber base, deployed our Oracle-free Nexign Policy Management for dynamic policy management in 4G and 5G networks. The project has shown that the performance of Nexign PCRF exceeds the replaced solution from a global PCRF vendor by 50%. As a result, the CSP could significantly reduce TCO by lowering hardware requirements and future investments in the network equipment.
Conclusion: Why Africa Needs Commercial Open-Source Solutions
African countries have tremendous potential, and most of them are on their way to economic and technological sovereignty. The development of the digital sector is one of the key challenges for regional states, and telecom forms the basis for building a digital economy. In this context, local CSPs should consider ways to reduce connectivity costs. One of such strategies is to obtain software from alternative vendors, as diversification allows market players to stay afloat in these challenging times.
The industry needs a solid foundation, and local market players should carefully analyze potential challenges and consider them while selecting software vendors. The good news is that today, many technological players in the telecom market offer innovative yet cost-efficient and open solutions for fast and reliable business growth. Open-source software allows CSPs to save on licensing and maintenance fees. Besides, it usually requires less hardware power and helps save on hardware costs. Open-source software is agile and can be adjusted to the CSP’s unique needs more easily than proprietary software. Finally, it offers freedom from vendor lock-in, minimizing related risks and advancing flexibility and control.