2007 Africa - Telecoms, Mobile and Broadband in Southern Region and Indian Ocean Islands

Publication Overview

This report provides a comprehensive overview of the trends and developments in the telecommunications markets of nine African countries: Angola, Botswana, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Zambia and Zimbabwe. Subjects covered include:

• Key statistics;
• Market and industry overviews;
• Regulatory environment and structural reform;
• Major players (fixed and mobile);
• Infrastructure development;
• Mobile voice and data markets;
• Internet, including broadband development.

Executive Summary

The diversity among the countries in this group is immense, ranging from the small Indian Ocean island nation of Mauritius, sporting some of the best telecoms market indicators of the continent, to some of the poorest countries in the world like Malawi and the island of Madagascar, as well as countries which have emerged from decades-long civil wars like Angola and Mozambique and which are consequently at a very low level of development. In between are relatively wealthy nations like Botswana and Namibia which benefit from their close ties with South Africa. In its deep political and economic crisis, neighbouring Zimbabwe is demonstrating how telecoms markets in Africa survive even the most difficult of operating conditions.

Angola

Angola is the second-largest producer of oil in sub-Saharan Africa, and the recent rise of oil prices may push GDP growth as high as 35% in 2007. With peace restored in 2002 after almost 30 years of civil war, foreign investment has multiplied. However, Angola Telecom’s fixed-line network still serves less than 1% of the population. The licensing of four new fixed-wireless operators in 2002 has introduced competition to this sector, using 3G wireless technologies and WiMAX to provide advanced services. A national fibre optic backbone network is being implemented. Privatisation of Angola Telecom and the licensing of a third mobile operator are expected in the not too distant future. For the country overview, see chapter 1, page 1.

Botswana

Botswana is one of the continent’s wealthiest nations with a thriving economy mainly based on diamond exploitation and tourism. Major steps were taken in 2006 towards full liberalisation of the already competitive telecommunications sector. Mobile penetration has passed the 50% mark which is more than twice the African average, while the government-owned national operator BTC has seen a continued decline in the number fixed-line connections despite the introduction of ADSL broadband services. The government is in the process of privatising BTC which, through a new service-neutral licence, is now also enabled to compete in the mobile sector. For the country overview, see chapter 2, page 20.

Madagascar

The new private owners of Madagascar’s incumbent telco, Telma, have managed to almost double the number of fixed line customers in 2006 alone after years of stagnation, albeit from a very low base. They also entered the mobile market successfully as the country’s third player. Penetration rates in both sectors are still extremely low, promising excellent growth potential. Pent-up demand for Internet access and broadband capabilities, resulting from the traditionally underdeveloped fixed network, will continue driving both market sectors. With one of the lowest GDPs per capita in the world, there will be limits to the growth of Madagascar’s telecoms market, but plans to exploit and export crude oil and natural gas reserves may deliver a boost to the economy. For the country overview, see chapter 3, page 40.

Malawi

Malawi’s incumbent telco, MTL, was finally privatised in 2006 following several unsuccessful attempts. A second national operator was licensed in May 2007 and the county’s third mobile licence is expected later in the year. Malawi’s telecommunications sector is among the least developed in Africa with a fixed-line penetration rate below 1%, despite more than doubling the number of fixed-line connections in the past five years. The mobile sector has grown more than ten-fold during the same period, but market penetration is still very low in this sub-sector as well, around 5%. Several ISPs are rolling out wireless broadband networks, and the planned liberalisation of Internet telephony (VoIP) should create further opportunities. For the country overview, see chapter 4, page 52.

Mauritius

The island nation of Mauritius sports some of the best telecommunication market indicators in Africa and has been the first with many innovations: It launched Africa’s first cellular system in 1989, the first commercial 3G mobile service in November 2004, and the world’s first nationwide high-speed wireless broadband network based on the WiMAX standard in 2005. Mauritius is actively pursuing a policy to make telecommunications the fifth pillar of its economy after sugar, textiles, tourism and financial services, and to become a regional telecom hub with Singapore as a role model. The incumbent telco has been partially privatised and all sectors of the market are open to competition. A second fixed-line and third mobile operator launched services in 2006, giving additional impetus to the market moving into 2007. For the country overview, see chapter 5, page 64.

Mozambique

Fifteen years of peace and radical reforms have transformed Mozambique into one of the fastest-growing economies on the continent. The country was one of the first in the region to reform its telecommunications landscape, immediately after a peace accord had been reached in 1992. The mobile sub-sector has experienced excellent growth rates, and yet, market penetration is still only about half the African average. An announcement regarding the licensing of a third mobile operator is expected before the end of 2007. Internet usage is expected to receive a boost from wireless broadband networks currently being rolled out and the introduction of 3G mobile services in the second half of 2007. For the country overview, see chapter 6, page 82.

Namibia

Namibia was one of the last countries in Africa to introduce competition in the mobile communications sector when a second network finally launched in 2007. Despite this, the country had already achieved a market penetration rate above the African average. The other mobile network was partially privatised in 2006 and has launched 3G services. The fixed-line incumbent, Telecom Namibia, quietly entered the lucrative mobile market as the third player but was put on hold by the regulator until the new ICT Bill brings clarity about fixed-mobile convergence, among other issues. Several WiMAX networks currently under development will boost Internet connectivity and bring additional competition to the voice market once Internet telephony (VoIP) is deregulated. With an extensive fibre optic backbone, the country is well positioned to remain one of the most developed telecommunications markets in Africa. For the country overview, see chapter 7, page 97.

Zambia

Zambia has an independently regulated telecoms sector with three competing mobile networks and a monopoly fixed-line operator, Zamtel. While the mobile sector has experienced excellent growth, market penetration is still relatively low at little more than half the African average. The fixed-line network is at a very low level of development, which in turn has impeded growth in the Internet sector. The country’s ISPs are rolling out wireless broadband networks, positioning themselves as competitors in the telecoms sector once Internet telephony (VoIP) is fully liberalised – a key component in Zambia’s new ICT Policy which was launched in early 2007. For the country overview, see chapter 8, page.115.

Zimbabwe

Zimbabwe’s almost decade-old deep political and economic crisis has not spared the country’s telecom industry, with a dwindling local currency, hyper inflation and government interference creating a difficult operating environment. Attempts to privatise the national telco during this time have failed, as has a second national operator, unable to raise the necessary funding. Growth of the country’s three mobile networks has been slowed down temporarily, but an immense pent-up demand is now being addressed following major infrastructure upgrades, including the introduction of 3G mobile services. The country’s backbone network is being upgraded, including fibre optic links which will also improve Internet connectivity. For the country overview, see chapter 9, page 131.

Key highlights:

• Fixed-line, mobile and Internet market forecasts to 2010 and 2015 for Angola and Madagascar, two of Africa’s most promising growth markets driven by oil revenues;
• Privatisation of incumbent telcos expected in Angola and Botswana;
• Successful turnaround story of Madagascar’s incumbent telco following privatisation;
• Additional mobile licences expected in Angola, Malawi and Mozambique;
• 3G mobile services launched in Namibia, expected in Angola, Mozambique and Zimbabwe before the end of the year;
• WiMAX networks are operational or under development in almost every country in the region;
• Converged Triple Play services (voice, broadband data and IPTV) launched in Mauritius;
• Liberalisation of VoIP expected in Malawi;
• In its almost decade-old deep political and economic crisis, Zimbabwe demonstrates how telecoms markets in Africa survive even the most difficult of operating conditions.

Mobile subscribers and penetration in Zimbabwe - 1997-2006

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