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Published: April 2009 From: £1,000 Pages:107 Tables:73
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Table of Contents
Overview
African mobile operations have long been extremely profitable; stories abound of triple digit subscriber growth, seemingly boundless potential, and an overall environment in which operators need only build it and profits will come. If only things were that simple.
The reality is more complicated, according to a new report by AfricaNext Investment Research, The Future of African Mobile Profitability: Stupendous Value, Mobile Darwinism & The Next Phase of Growth. Building on a comprehensive analysis of mobile operator performance in 40 African markets, the report reveals a market that “offers a remarkable blend of stupendous value creation alongside ostensibly misguided value destruction, can’t miss profit machines at the top versus volatile opportunities at the bottom, and pervasive premium valuations for what is increasingly a Darwinist, commodity business.”
In The Future of African Mobile Profitability, the AfricaNext research team goes beyond gaudy top line subscriber and revenue numbers, to provide in depth analysis of the drivers of African mobile profitability, including pricing and usage, OpEx, CapEx, EBITDA and free cash flows dynamics in an increasingly competitive environment and in the face of a severe economic downturn.
The report argues, among other points, that many African markets will break the 100% mobile penetration mark, that the focus on subscribers and ARPU numbers overstates their actual importance and that too many models are built primarily on the hope of potential returns from capital gains rather than intrinsic value. In addition, the report notes that the depression in mobile asset values over the past few months offers the best opportunity to acquire assets at a price closer to fair value, rather than the inflated rates of only a year ago.
The Future of African Mobile Profitability provides perhaps the most in-depth independent analysis of African mobile economics and long term return prospects, a must have for any would-be large investor in the African mobile space.
Key Questions
- How large is the African mobile market over the next five years? How high can African mobile penetration go?
- How many mobile operations can African markets support?
- What, if any correlation is there between ARPU and EBITDA margin in the African context? Does ARPU matter? Afcre subscriber numbers credible?
- Is the African mobile market a premium or a commodity business? What are the chances of
- African markets moving to flat rate pricing?
- What are the key drivers of mobile operating expenses? How will mobile broadband impact OpEx?
- What are the long term prospects for interconnect revenue and costs?
- What is the median EBITDA margin in the African mobile market?
- Who are the 50 largest operators in Africa (in revenue terms)?
- What is the projected CapEx allocation over the next five years?
- Is there a correlation between CapEx share and revenue share?
- How many African mobile operators can cover CapEx requirements without resorting to debt and/or equity capital?
- Are African mobile licenses overvalued? Are mobile operator valuations too high?
- How will the credit crunch and the downturn impact competitive and operational dynamics?
- What will be the impact of players such as Warid, Lap Green, Comium?
Who should buy this report?
Service Providers
- Benchmark the economics of African mobile by line item and compare to your own Benchmark market size and operational projections
- Assess market potential Benchmark operational expenses at African level
- Get tools to assess mobile license values and valuation of potential targets
- Assess market potential for mobile or operator acquisition
Investors
- Assess the economics of mobile in the African environment
- Separate winners from potential losers
- Get transaction analysis on key African mobile deals
- Identify the markets and operations more likely to generate some meaningful returns and those less likely to do so
- Get useful data points to build your own financial model
- Get market projections to help you assess the African mobile opportunity in 30+ markets
- Benchmarks the economics of African mobile by line item and compare to your own.
Infrastructure Suppliers
- Get some extensive and independent projections of African mobile CapEx over the next five years
- Get independent assessment of the impact of network expenses on EBITDA
- Get useful data points to build your own financial model
- Get market projections to help you assess the African mobile opportunity in 30+ markets
- Benchmarks the economics of African mobile by line item and compare to your own.
Executive Summary
Table of Contents
Pricing and Formats
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