Growth is expected to return to stagnating telecoms market
This annual report provides a comprehensive overview of trends and developments in Madagascar’s telecommunications market. Subjects covered include:
- Key statistics;
- Market and industry overviews;
- The impact of the global economic crisis;
- Government policies affecting the telecoms industry;
- Market liberalisation and regulatory issues;
- Telecoms operators – privatisation, acquisitions, new licences;
- Major players (fixed, mobile and broadband);
- Infrastructure development;
- Internet and broadband development and growth;
- Convergence (voice/data, fixed/wireless/mobile);
- Mobile data services, including 3G.
Madagascar’s exposure to the global economic crisis was amplified by political instability following a controversial change of government in 2009. The economy has remained weak since then which has led to weaker subscriber growth in the telecoms sector, reduced consumer spending and, as a consequence, intensified price competition between the three GSM mobile network operators – Orange, Bharti Airtel (formerly Zain) and Telma, the incumbent telco. A fourth mobile operator, Madamobil, launched a CDMA-based network in 2010 but its licence was revoked in 2012. GDP growth is currently expected to steadily rise back to levels of around 5% by 2016/17, which should lead to renewed growth especially in the mobile and broadband market. Plans to exploit and export crude oil, gas and other natural resources may deliver a boost to the economy.
Positive developments in the internet and broadband sector have begun following the arrival of the first international submarine fibre optic cables, LION and EASSy on the island in 2009 and 2010. This ended the country’s dependency on satellites for international connections, bringing down the cost of international bandwidth and making internet access more affordable to a wider part of the population.
A national fibre backbone is being implemented connecting the major cities. Wireless broadband access networks are being rolled out, enabling converged voice, data and entertainment services. The launch of third generation (3G) mobile broadband services has enabled the mobile operators to reverse their rapidly declining average revenue per user (ARPU).
The fixed-line sector has been undergoing a revolution following the privatisation of Telma. Major investments have been made, the number of fixed lines has multiplied, albeit from a very low base. ADSL2+ broadband services have been introduced and the decline in fixed-line revenue has been successfully reversed. Despite these positive developments, the national telco is considering various divestiture options.
Penetration rates in all market sectors are still below African averages, promising excellent growth potential.
- Mobile ARPU rises as 3G broadband services gain traction;
- Lower international bandwidth costs lead to retail broadband price cuts;
- National fibre rollout continues;
- National telco considers divestiture options.
Estimated market penetration rates in Madagascar’s telecoms sector – end 2014
(Source: BuddeComm based on various sources)
Companies covered in this report:
Telecom Malagasy SA (Telma); Bharti Airtel (Zain, Celtel); Orange Madagascar; Madamobil; Gulfsat Madagascar; Blueline; Datacom; Data Telecom Services (DTS, Moov).