Madagascar - Telecoms, Mobile and Broadband - Statistics and Analyses

Madagascar to connect to the Africa-1 cable system

Madagascar’s economy has shown steady growth in recent years, benefiting from a revived tourist sector. Plans to exploit and export crude oil, gas and other natural resources may also deliver a boost to the economy in future, despite the falling price of these commodities on international markets.

This period of strengthening economic output is helping to increase consumer spend on telecom services. These services are becoming cheaper as a result of intensifying competition between the main operators, including Orange Madagascar, Bharti Airtel (formerly Zain) and the incumbent telco Telma. A fourth mobile operator, Blueline, now operates its own network having been an MVNO since 2010.

Positive developments in the internet and broadband sector are also materialising 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. The IOX cable is expected to be ready for service in early 2019, which will provide additional capacity to support the fast-growing mobile data market. In addition, the METISS submarine cable (expected to be ready in 2019) and the Africa-1 cable (expected in 2020) will provide additional links to the African mainland and other international cable systems.

A national fibre backbone is being implemented connecting the major cities, and Telma expects to invest an additional $250 million to expand the backbone network from 5,000km to 11,000km by 2019. Wireless broadband access networks are being rolled out, enabling converged voice, data and entertainment services. The launch of 3G and LTE 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. Upgraded DSL services have been introduced and the decline in fixed-line revenue has been reversed. Despite these positive developments, the national telco is considering various divestiture options.

Penetration rates in all market sectors are still below African averages, and so there remains excellent growth potential.

Key Developments:

• Madagascar to host landing station for the Africa-1 cable system, to be ready in 2021;
• National backbone network extended to 9,000km;
• Orange Madagascar launches LTE services;
• Indian Ocean Xchange (IOX) soon to be completed;
• Airtel Money made available in branches of the Private Enterprise Credit Agency;
• Madagascar opens its own internet exchange point;
• Government and regulator work on SIM card registration scheme;
• Telecom service tax raised to 10%;
• Airtel Madagascar extends mobile license for a further ten years, launches LTE services;
• Orange Madagascar secures mobile licence renewal;
• National fibre rollout continues;
• Report update includes the regulator's market data updates for 2017, market data report for 2017, telcos' operating data to September 2018, recent market developments.

Companies mentioned in this report:

Telecom Malagasy (Telma); Bharti Airtel (Zain, Celtel); Orange Madagascar; Madamobil; Gulfsat Madagascar; Blueline; Datacom; Data Telecom Services (DTS, Moov)

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