2007 Africa - Telecoms, Mobile and Broadband in Western Region

The countries in this group include some of Africa’s most liberalised telecommunications markets. Ghana led the way when it privatised its national telco as early as 1995, with Côte d’Ivoire and Senegal following in 1997 when France Telecom acquired stakes. The mobile markets in this region are highly competitive with three or more network operators in most countries. With hundreds of service providers for all kinds of telecommunication services, Nigeria is one of the continent’s largest and fastest growing markets. Foreign investors from Europe, the Middle East and South Africa continue to keep a keen eye on every takeover opportunity or new operator licence being tendered in the region, as market penetration rates are still relatively low.

While growth prospects in the mobile voice market are still excellent, the focus is beginning to shift to broadband Internet and converged voice and data services. Continuing liberalisation of VoIP is creating new opportunities for wireless broadband access networks that are set to replace the extremely underdeveloped copper fixed-line networks and ultimately compete in the mobile sector as well. Extensive national fibre optic backbone networks are being rolled out, and all countries in this group have access to high-speed transmission capacity on submarine cable systems linking them with each other and the rest of the world.

Benin

Benin only recently separated an old-style posts and telecommunications entity and established an independent regulator. Uncertainty currently hangs over the liberalisation of the sector, caused by aggressive restructuring attempts by the government. Even the mobile sector, already highly competitive with four networks, is affected. However, once a clear, investor-friendly framework is back in place, the growth prospects are excellent, with penetration rates in all market segments well below African averages.

Burkina Faso

Following the majority-privatisation at the end of 2006 of Burkina Faso’s incumbent telco, Onatel, fresh investment is expected to accelerate the development of the national network infrastructure. Mobile telephony has experienced outstanding growth, with subscribers to the three digital networks now outnumbering fixed lines in the country by more than 10:1. Moving into 2007, the telecom sector promises new opportunities with the government’s plans to license several new international gateway operators, rural operators and possibly a VoIP operator. For the country overview, see chapter 2, page 14.

Côte d’Ivoire

A new peace agreement signed in Côte d’Ivoire in March 2007 gives hope for a normalisation of affairs in this divided country. However, most segments of the telecom market have continued to flourish during the crisis which started in 1999. Recent events such as the launch of a third and a fourth mobile network and the sale of the second national operator for more than US$30,000 per customer are indicators for the enormous potential that is seen in this market. The country has a relatively well developed infrastructure and some of the lowest prices in Africa for ADSL broadband services, with speeds of up to 8Mb/s. For the country overview, see chapter 3, page 24.

Gambia

Gambia has had a 100% digital network since 1995, but fixed-line penetration has remained low at around 3%, which in turn has hindered Internet usage. This is expected to change with ambitious plans to multiply teledensity by 2008, making extensive use of wireless systems. ADSL broadband services were introduced in Gambia in 2006. Mobile penetration is well above the African average and is expected to be driven further by the recent licensing of a third and fourth network operator. The recent award of additional international licences, the planned privatisation of Gamtel, and the new Telecommunications Bill, including new guidelines on VoIP, are expected to lead to new opportunities for additional market players. For the country overview, see chapter 4, page 36.

Ghana

Ghana led the way in telecommunications liberalisation and deregulation in Africa when it privatised Ghana Telecom as early as 1996. It was also among the first countries in Africa connected to the Internet and to introduce ADSL broadband services. Four mobile operators are competing for customers. The sale of second national operator Westel, which also holds the country’s fifth mobile licence, in early 2007 for almost four times the asking price indicates the huge potential that is seen in the market despite the already intense competition. Following a share buy-back from the original private stakeholder, Ghana Telecom will be looking for a new strategic investor and float part of its equity on the local stock market. For the country overview, see chapter 5, page 47.

Nigeria

Nigeria is one of the biggest and fastest growing telecom markets in Africa, attracting huge amounts of foreign investment, and is yet standing at low to very low levels of market penetration. Over 200 companies are providing virtually all kinds of telecom and value-added services. The mobile sector has seen triple-digit growth rates five years in a row since competition was introduced. With an ailing incumbent that was finally privatised in 2006, a second national operator and several private fixed-wireless operators dominate the fixed-line market. A fifth GSM operator and four 3G mobile networks were licensed in early 2007. A new unified licensing regime designed to increase competition between fixed and mobile network operators is expected to also give a boost to the Internet sector. VoIP is already carrying the bulk of Nigeria’s international voice traffic. The current deployment of the country’s first NGN will drive further convergence of voice, data and video/TV, enabling the provision of triple play services that will ultimately also involve the country’s already competitive broadcasting sector. For the country overview, see chapter 6, page 75.

Senegal

Senegal has developed one of Africa’s most extensive and modern telecommunications infrastructures. The national operator Sonatel is partially privatised and highly profitable. The incumbent’s monopoly officially ended in 2004, and a second national operator and third mobile operator are to be licensed. Since the introduction of competition in the mobile sector in 1999, the number of mobile subscribers has grown dramatically, now representing more than 90% of all telephone lines. Senegal was one of the first African countries to introduce ADSL in 2003 which has almost completely replaced dial-up as an Internet access method. Overall market penetration is still low, resulting in attractive opportunities for new entrants. For the country overview, see chapter 7, page 133.

Key highlights:

• Fixed-line, mobile and Internet market forecasting to 2010 and 2015 for Benin, Ghana, Nigeria and Senegal.
• The spectacular growth curve of Nigeria’s mobile market is slowly beginning to flatten, but US$2 billion in investments continue to flow into the country’s telecommunications market every year.
• Foreign investors, mainly from Europe, the Middle East and South Africa continue to expand their footprints in the region.
• The national telco, including its mobile business, and the electricity utility’s fibre network in Ghana will be privatised.
• ADSL has almost completely replaced dial-up as an Internet access method in Senegal.
• Cote d’Ivoire demonstrates how African telecoms markets are relatively unaffected by conflict.

Cote d’Ivoire mobile subscribers and penetration rate – 1996 - 2006