Mobile phones represent more than 90% of all telephone lines in Africa. As market penetration passed the 50% mark in 2010, subscriber growth slowed to below 20% p.a. The bottom of the pyramid (BoP), referring to the majority of the population that is poor, has clearly been penetrated in some of the continent’s most dynamic markets which have passed or are close to the 100% penetration mark. Most other African markets are just about to enter this stage of their development which is worrying some investors while it is exciting others.
The introduction of prepaid services and a steady decline in tariffs has meant that about half of Africa’s close to one billion people can now afford a mobile phone. However, as lower and lower income groups are being targeted, the declining Average Revenue per User (ARPU) is putting pressure on the network operators' profit margins. Literal price wars have broken out in some markets where a large number of operators have been licensed. Despite this, international investors are still very keen to enter the market through new mobile licences or shares in existing mobile operations in Africa. Some operators make more than twice the ARPU of some of their competitors in the same markets.
Newly introduced converged licensing regimes have increased the competitive pressure in a number of key markets but also allow the mobile operators to branch out into new service segments. Due to the continent's poor fixed-line infrastructure, the mobile networks are playing an increasing role in broadband Internet service provision, following the launch of third-generation (3G) services – a welcome new revenue stream in an environment of low ARPU levels. Mobile banking services are another growth area, so successful that they are threatening the traditional banking system which many people in developing countries do not have access to.
Paul is by far, the leading telecommunications analyst in Australia. Not only is his company's research first class and timely, it is superbly contextual to the complexities of today's modern media and communications technology. He is always extremely generous in sharing his knowledge with others and has a great ability to connect people together and be a thought leader on topics of National interest such as the NBN, FttH and Smart Grids.
Bruce Duyshart, Director Strategic Technology, Lend Lease
BuddeComm's strategic business reports contain a combination of both primary and secondary research statistics, analyses written by our senior analysts supported by a network of experts, industry contacts and researchers from around the world as well as our own scenario forecasts.
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