Publication Overview
This report provides a comprehensive overview of trends and developments in the telecommunications markets of eight African countries: Cameroon, the Democratic Republic of Congo, Ethiopia, Gabon, Kenya, Rwanda, Tanzania, and Uganda. Subjects covered include:
· Key statistics;
· Market and industry overviews;
· Regulatory environment and structural reform;
· Major players (fixed, mobile and broadband);
· Infrastructure development;
· Mobile voice and data markets, including 3G;
· Average Revenue per User (ARPU) trends;
· Internet, including broadband development;
· Convergence (voice/data, fixed/wireless/mobile).
Researcher: Peter Lange
Current publication date:- December 2008 (7th Edition)
Next publication date:- December 2009
Executive Summary
Several new international submarine cable projects are set to bring large amounts of fibre-based bandwidth to countries along the continent’s east coast and in the interior for the first time in 2009. Paired with rollouts of national fibre optic backbones and wireless broadband infrastructures, this is creating new opportunities in an environment of converging technologies and services and promises to bring the long-awaited cost reduction and improved availability of telecommunications. Key countries in the region have privatised their incumbent telcos, liberalised international access and VoIP telephony, and implemented new competition frameworks. The region was a global pioneer in the abolishment of international roaming charges, and mobile payment and banking solutions are now bringing financial services to the 90% of the population that do not have bank accounts.
As in most African countries, Cameroon’s mobile market has been booming since competition was introduced, while the fixed-line sector has been stagnant. Convergence between fixed and mobile, voice and data services is now set to change the market dramatically. The fixed-line incumbent, Camtel, is re-entering the mobile sector through a third national licence, and the existing mobile operators are establishing themselves as leading ISPs by introducing mobile data services and acquiring existing ISPs. The mobile operators are also among the bidders in the privatisation of a majority stake in Camtel with a view to providing converged services. The existing ISPs are combining their forces by merging and preparing to offer VoIP services through newly established wireless broadband networks.
The Democratic Republic of Congo is a mineral-rich country that is recovering from civil strife and many years of pillage by its former leaders, which has accounted for the low level of development of its telecommunications and other infrastructure. While there has been little success with revitalising the fixed-line network infrastructure, the mobile networks have experienced strong growth and provide a replacement for fixed telephony and public payphones. Following the launch of mobile data services, they are also set to become major players in the underdeveloped Internet and broadband sector. Overall, market penetration is still well below the African average, leaving enormous potential for future growth.
Ethiopia still practices a monopoly in almost all areas of its telecoms sector. Market penetrationremains very low, but major efforts to roll out a national fibre backbone and wireless access networks have resulted in an acceleration of growth in all market segments. Further massive investments into fixed, mobile and Internet services, totalling US$4 billion, are planned for the five years to 2012. The government is intent on eventually privatising the national operator, ETC, and introducing competition in mobile and Internet services.
Following the introduction of competition between three service providers in Gabon, this relatively small and wealthy African nation has achieved one of the highest mobile market penetration rates on the continent, but its fixed-line and Internet sectors remain underdeveloped due to a lack of competition and the resulting high prices. The recently completed privatisation of Gabon Telecom may bring new impetus to the market if coupled with further market liberalisation.
Despite the civil unrest which cast a shadow on Kenya at the beginning of 2008, the fundamental transformation of its telecoms market continues. A consortium lead by France Telecom acquired a 51% stake in the national telco, Tekom Kenya. The IPO of the country’s leading mobile operator, Safaricom, went ahead very successfully in April, which is an encouraging sign for Telkom’s planned IPO. A new, simplified licensing regime designed to increase competition was introduced mid-year. Several competing wireless broadband networks and national fibre backbones are being rolled out, and several international submarine fibre optic cables are expected to launch from 2009. This will bring bandwidth prices down and open the Internet up to the mass market. The country’s GSM mobile market finally moved beyond a duopoly at the end of 2008 when Econet and Telkom Kenya launched services as the third and fourth players. Convergence is ever-present in this dynamic and fast growing market with voice, data and video/broadband TV (triple play) services, the introduction of 3G mobile services and mobile banking empowering the largely un-banked population.
In Rwanda, the aftermath of the 1994 genocide and a monopolistic market structure until 2006 have weighed on the telecoms sector, but the nation is now catching up with other markets in Africa. The privatised incumbent telco is more innovative than most of its African counterparts in the provision of market-driven, affordable services, and it is competing in the mobile sector as well. Rwanda has one of the most developed national fibre infrastructures in the region and is preparing to connect to the new high-bandwidth submarine cables being built along the east cost of Africa.
Tanzania has a fully competitive telecom sector with two fixed-line operators and six operational mobile networks, with four additional players licensed under a new converged regulatory regime. Growing at 50% per annum, the mobile market passed the ten million subscriber mark in 2008 with four dominating major operators. At a penetration level of only around 30%, growth is set to continue. The liberalisation of VoIP Internet telephony as well as the introduction of 3G mobile and other wireless broadband services is boosting the Internet sector, which has been hampered by the low level of development of the traditional fixed-line network.
As early as 1999, Uganda became the first country in Africa where the number of mobile subscribers passed the number of fixed-line users, and the ratio is now around 40:1. The entry of a second national operator and five mobile networks has revolutionised the telecoms sector. The market is consistently growing at between 50% and 100% per annum, while penetration at around 20% is still below the African average. The recent introduction of 3G services will enable the mobile operators to play a larger role in Internet service provision. A new simplified licensing regime has significantly reduced barriers to market entry and increased competition.
Key highlights:
· Fixed-line, mobile and Internet market forecasts to 2010 and 2015 for Ethiopia and Gabon;
· 3G mobile services are available in Kenya, Tanzania, Uganda and Rwanda, with Ethiopia preparing for launch;
· Mobile TV launched in Kenya and Uganda;
· At least six competing WiMAX wireless broadband networks are being rolled out in Kenya;
· Privatised Gabon Telecom becomes the country’s fastest growing mobile network operator and expands fixed network by 30% within one year;
· The government of Rwanda buys back the national telco for US$12 million and sells it for US$100 million three months later;
· The DRC’s mobile operators claim they generate 30% of the total tax income of the state;
· A number of countries in the region have taken a world lead role by abolishing international mobile roaming surcharges;
· More than 10% of Kenya’s GDP now passes through the M-Pesa mobile payment and banking service, which has more users than there are bank account holders in the country.
Gabon Telecom fixed-line revenue versus mobile revenue – 2006 - 2007
|
Year
|
Fixed
|
Mobile
|
|
Revenue (US$ million)
|
|
2006
|
77
|
49
|
|
2007
|
63
|
71
|
(Source: BuddeComm based on company data)
The following notes provide some background to our scenario forecasting methodology:
· This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.
· The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.
· All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.
For those needing high level strategic information and objective analysis on this region, this report is essential reading and gives further information on:
· Government policies affecting the telecoms industry;
· Market liberalisation;
· Telecoms operators – privatisation, acquisitions, new licences and competition;
· Internet and broadband development and growth;
· The fast growing mobile markets of the region;
· ARPU;
· Mobile application and content developments.
Data in this report is the latest available at the time of preparation and may not be for the current year.