Mozambique - Telecoms, Mobile, Broadband and Forecasts

Executive summary

Third network expected to deliver boost to mobile market

This annual report provides a comprehensive overview of trends and developments in Mozambique’s telecommunications market. Subjects covered include:

• One of the highest growth potential telecom markets in Africa;
• Key statistics;
• Market and industry overviews;
• Government policies affecting the telecoms industry;
• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, initial public offerings, acquisitions, new licences;
• Major players (fixed, mobile and broadband);
• Infrastructure development;
• Mobile voice and data markets, including 3G;
• Average revenue per user trends and analysis;
• Internet and broadband development and pricing;
• The impact of the country’s first international submarine fibre optic cables;
• Convergence (voice/data, fixed/wireless/mobile).

Almost two decades of peace and radical reforms have transformed Mozambique into one of the fastest and most consistently growing economies in the world. It escaped the global economic crisis with barely a dent in its GDP growth which is expected to stay above 7% from 2011 onwards.

The country was one of the first in the region to reform its telecommunications landscape, immediately after a long civil war ended in 1992. The mobile sub-sector has experienced excellent growth rates following the introduction of competition in 2003 between Vodacom Mozambique and mCel, the incumbent mobile subsidiary of the national telco, TDM.

However, market penetration is still well below the African average. The expected launch of Mobitel as the third mobile network in late 2011 is expected to deliver a boost to subscriber growth in the sector but also drive the average revenue per user (ARPU) lower again which had already stabilised following the introduction of mobile broadband services and higher tariffs.

The government is intent on introducing competition to the fixed-line sector as well, but it is hesitating to privatise TDM. All other services are open to competition, subject to licensing by the industry regulator, INCM.

Internet usage in the country has been hampered by the inadequate fixed-line infrastructure and the high cost of international bandwidth, but this market sector is now accelerating following the introduction of various kinds of broadband services including ADSL, cable modems, WiMAX and 3G mobile, and the landing of two international submarine fibre optic cables in the country (Seacom and EASSy). The lower cost of bandwidth has already led to drastic reductions in broadband retail prices. Further improvements can be expected from the ongoing rollout of a national fibre backbone network and plans for an alternative fibre infrastructure.

Market highlights:

• Third mobile network expected to launch in late 2011;
• Mobile market forecasts for 2013 and 2016;
• Estimates for mobile, fixed-line and internet market to end-2011 and 2012;
• Profiles of major players in all market sectors;
• National fibre rollout;
• Alternative fibre infrastructure planned;
• Pricing comparison of all major broadband services (ADSL, cable TV, WiMAX, EV-DO, 3G mobile);
• Analysis of broadband price changes due to international fibre.

Estimated market penetration rates in Mozambique’s telecoms sector – end 2011

(Source: BuddeComm based on various sources)

Data in this report is the latest available at the time of preparation and may not be for the current year.

Peter Lange

May 2011

Table of Contents

• 1. Executive summary
• 2. Key statistics
• 3. Telecommunications market
  • 3.1 Market analysis 2011
• 4. Regulatory environment
  • 4.1 Telecommunications Law 1992
  • 4.2 Basic Telecommunications Law 2004
  • 4.3 Regulatory authority
    • 4.3.1 Instituto Nacional das Comunicações de Moçambique (INCM)
  • 4.4 National Commission on Information
  • 4.5 Telecom sector liberalisation in Mozambique
  • 4.6 Interconnection
  • 4.7 Universal service
  • 4.8 Quality of service
  • 4.9 SIM card registration
• 5. National fixed-network operator
  • 5.1 TDM
    • 5.1.1 Fixed-line statistics
    • 5.1.2 Subsidiaries
    • 5.1.3 Privatisation
    • 5.1.4 Network infrastructure
    • 5.1.5 National fibre backbone
    • 5.1.6 Tariffs
    • 5.1.7 Financial results
• 6. International infrastructure
  • 6.1 Satellite
  • 6.2 Terrestrial microwave and fibre
  • 6.3 Submarine fibre
• 7. Internet market
  • 7.1 Overview
    • 7.1.1 Internet statistics
  • 7.2 Internet connectivity
  • 7.3 Public internet access locations
  • 7.4 Cost of personal computers
  • 7.5 Mozambique’s ISP market
    • 7.5.1 Teledata
    • 7.5.2 Intra (Internet Solutions)
    • 7.5.3 Tropical Web
  • 7.6 Mozambique Internet Exchange Point (MOZ-IX)
  • 7.7 E-government
• 8. Broadband market
  • 8.1 ADSL
  • 8.2 Broadband via cable TV (TV Cabo)
  • 8.3 Wireless broadband
    • 8.3.1 EV-DO
    • 8.3.2 WiMAX
• 9. Mobile communications
  • 9.1 Overview of Mozambique’s mobile market
  • 9.2 Mobile statistics
  • 9.3 Major mobile operators
    • 9.3.1 mCel
    • 9.3.2 Vodacom Mozambique
  • 9.4 Third mobile licence
  • 9.5 Mobile data services
  • 9.6 Third generation (3G)
  • 9.7 ARPU
• 10. Forecasts
  • 10.1 Forecasts – mobile market – 2013; 2016
  • 10.2 Notes on scenario forecasts
• 11. Related reports

• Table 1 – Country statistics Mozambique – 2011
• Table 2 – Fixed-line network statistics – 2011
• Table 3 – Internet provider statistics – 2011
• Table 4 – Internet user statistics – 2011
• Table 5 – Mobile statistics – 2011
• Table 6 – National telecommunications authority
• Table 7 – Fixed lines in service and teledensity – 1995 - 2012
• Table 8 – TDM financial results – 2006 - 2009
• Table 9 – Internet users and penetration rate – 1996 - 2012
• Table 10 – TDM ADSL pricing – May 2011
• Table 11 – NetCabo cable broadband pricing – May 2011
• Table 12 – TDM EV-DO broadband pricing – June 2010
• Table 13 – Mobile subscribers and penetration rate – 1997 - 2012
• Table 14 – Mobile subscribers by operator and annual change – September 2010
• Table 15 – Vodacom Mozambique financial results – 2007 - 2010
• Table 16 – mCel 3G prepaid pricing – May 2011
• Table 17 – Vodacom 3G post-paid pricing – 2010 vs. 2011
• Table 18 – Vodacom Mozambique ARPU – 2004 - 2010
• Table 19 – Forecast – mobile subscribers – 2013; 2016

• Chart 1 – Mobile subscribers and penetration rate – 2002 - 2012