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, mobile and broadband);
· Infrastructure development;
· Mobile voice and data markets;
· Average Revenue per User (ARPU) trends;
· Internet, including broadband development;
· Convergence (voice/data, fixed/wireless/mobile).
Researcher:- Peter Lange
Current publication date:- October 2008 (7th Edition)
Next publication date:- October 2009
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. In between are relatively wealthy nations like Botswana and Namibia which benefit from their close ties with South Africa. In its decade-old deep political and economic crisis, neighbouring Zimbabwe is demonstrating how telecoms markets in Africa survive even the most difficult of operating conditions.
Angola is the second-largest producer of oil in sub-Saharan Africa, and the recent rise of oil prices has led to continuous GDP growth of around 20% for the past three years. With peace restored in 2002 after decades of civil war, foreign investment has multiplied and the mobile market has soared. Competition was also introduced in the underdeveloped fixed-line market and several 3G wireless technologies and WiMAX networks are being rolled out. Growth in the Internet sector is being held back by monopolistic pricing of international bandwidth, but this is expected to change with the arrival of new fibre optic submarine cables reaching the country from 2009. Privatisation of Angola Telecom, which is currently implementing a US$500 million national fibre optic backbone, and the licensing of a third mobile operator are also expected in the not too distant future.
Botswana is one of Africa’s wealthiest nations with a thriving economy mainly based on diamond mining and tourism. Mobile penetration has passed the 80% mark, almost three times the continent’s average. A nationwide fibre backbone network supports a wide range of services, and this landlocked country’s access to international bandwidth is being improved. Broadband services are available in the form of ADSL and various wireless technologies, including a city-wide WiMAX network in the capital Gaborone, launched in mid-2008. The government is in the process of privatising the national telco BTC which, through a new service-neutral licence, is now also enabled to compete in the mobile sector.
Madagascar’s new private owners of incumbent telco, Telma, have managed to more than double the number of fixed-line customers within two years following years of stagnation, and to reverse the decline in fixed-line revenues through the introduction of attractive prepaid services. They have also entered the mobile market successfully as the country’s third player. Penetration rates in both sectors are still well below African averages, 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 this telecoms market, but plans to exploit and export crude oil and natural gas reserves may deliver a boost to the economy.
Malawi’s telecom sector is undergoing a small revolution following the privatisation of the national telco, MTL. Copper and fixed-wireless lines are being rolled out at an unprecedented pace, and a national fibre backbone is being implemented. The country’s electricity utility is also laying fibre and leasing capacity to telcos. A second national operator was licensed in May 2007 and a third mobile network in 2008, with a fourth expected soon. Penetration rates are still well below African averages in both market segments, leaving ample future growth potential. Several ISPs are rolling out wireless broadband networks and mobile data services have been launched. The underdeveloped Internet sector will receive a boost from the arrival of fibre-based international bandwidth in 2009 or 2010, paired with the planned liberalisation of VoIP Internet telephony.
The island nation of Mauritius sports some of the best telecommunications 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 2004, the world’s first nationwide WiMAX wireless broadband network in 2005, and one of Africa’s first broadband TV services in 2006. Mauritius is actively pursuing a policy to make telecoms 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. 2008 saw the rollout of competitive national fibre backbone networks and one of Africa’s first FttH deployments.
Sixteen 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 following the introduction of competition in 2003, but market penetration is still well below the African average. The government is intent on introducing competition to the fixed-line sector as well. Internet usage has increased in recent years following the introduction of various kinds of broadband services, and the mobile operators have entered this market segment with the launch of mobile data services. Further improvements can be expected from the ongoing rollout of 3G mobile services and a national fibre backbone network as well as the arrival of the first international submarine fibre optic cable to the country’s shores in 2009.
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. Both operators have launched 3G services and are entering the Internet and broadband market. 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 wireless broadband services are boosting Internet connectivity and will bring additional competition to the voice market once VoIP is deregulated. With an extensive national fibre optic backbone in place and international submarine fibre optic cables scheduled to reach the country in 2010, Namibia is well positioned to remain one of the most developed telecoms markets in Africa.
Zambia has three competing mobile networks and a monopoly fixed-line operator, Zamtel. While the mobile sector has experienced excellent growth, market penetration is still below 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, which will also position them as competitors in the telecoms sector once VoIP is fully liberalised – a key component in Zambia’s new ICT Policy. A national fibre backbone is under development, including a connection to one of the several international submarine fibre optic cables that will reach the African east coast in 2010, which should help to reduce the cost of international bandwidth for this landlocked country.
Zimbabwe’s decade-old deep political and economic crisis has not spared the country’s telecom industry, with a dwindling local currency, hyperinflation 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, but an immense pent-up demand is now being addressed with major infrastructure upgrades, including the introduction of 3G mobile and other wireless broadband services. Zimbabwe’s backbone network is being upgraded, including fibre optic links which will also improve Internet connectivity. A power-sharing agreement reached on the political level following violent elections in March 2008 is seen as a first step towards normalisation.
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 telco underway in Botswana, expected in Angola.
· The number of fixed lines has almost tripled in Madagascar since privatisation.
· Fixed-line incumbents are entering the lucrative mobile market under new service-neutral licensing regimes and converging technologies.
· WiMAX networks are operational or under development in almost every country in the region.
· Liberalisation of VoIP underway in Malawi and Zambia.
· New international fibre optic submarine cables will reach the region in 2009 and 2010 and dramatically reduce the cost of bandwidth.
· Hundreds of millions of dollars are being invested in national fibre optic backbone networks.
· Fibre-to-the-Home deployment in Mauritius.
· Third mobile licence awarded in Malawi, expected in Angola and Mozambique.
· Live 3G mobile services in Angola, Mauritius, Mozambique and Namibia, with Zimbabwe ready to launch.
· Mobile ARPU has bottomed in many markets, rising again with mobile data services.
Vodacom Mozambique monthly ARPU – 2004 - 2008
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Year ends Mar
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Monthly ARPU (US$)
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2004
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16.20
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2005
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8.30
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2006
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5.60
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2007
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4.00
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2008
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4.10
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(Source: BuddeComm based on company data)
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;
· Average Revenue per User (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.