Major African Mobile Markets: Future Growth Prospects 2006-2011  

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Back Key Markets Key Players Figure 1: Africa - Major Mobile Markets (2004) Figure 2: Key African Markets - CAGR (2005-2011) Figure 3: Number of Operators (2004) Figure 4: Africa - Performance Analysis of Mobile Network Operators Key Markets Though most of the mobile markets in Africa have witnessed double and triple digit growth in subscriber numbers over the last few years, mobile penetration across the whole of Africa in general remains low. The whole African continent, for instance, had a mobile penetration of only 10.3 percent at the end of 2004, and 14.3 percent at the end of 2005. Figure 1, below, depicts the subscriber-base and corresponding penetration rate for some of the key mobile markets in Africa in 2004. Figure 1: Africa - Major Mobile Markets (2004) Source: Company reports, www.itu.com Such a situation coupled with liberalisation of the telecom markets and launch of advanced services has meant that there is a huge growth potential for mobile network operators in the region to increase their subscriber base. South Africa, Nigeria, Morocco, Egypt, Algeria and Kenya constitute the key mobile markets in Africa in terms of the potential for growth in number of subscribers. These markets offer strong potential for the operators as the penetration in all these countries remains well below 50 percent. Nigeria, which has the largest population in Africa, had reached only 7.6 percent penetration by the end of 2004. The country's mobile market has also shown tremendous growth in the recent past and penetration rose to 14.4 percent by the end of 2005, and this trend is likely to continue with the favourable policies from the regulator and the privatisation of NITEL. The number of subscribers in the country is expected to increase at a CAGR of 30.2 percent during 2005-2011. Like Nigeria, Kenya and Egypt are also likely to register strong growth in subscriber numbers during 2005-2011, and across the continent other countries show strong growth signs. South Africa, however, has the highest mobile penetration on the continent; the launch of 3G services in the country in 2004 should enhance the subscriber base in the region as well as generate higher ARPU for South African operators in the future. It is estimated that the total number of subscribers will increase at a CAGR of 4.7 percent during 2005-2011. Tunisia, which has the second highest level of mobile penetration in the region, is also expected to register a CAGR of 9.7 percent during 2005-2011, driven by the privatisation of state-owned Tunisie Telecom in 2006 and launch of GPRS and EDGE technologies. In fact, the mobile penetration in the country is expected to exceed 80 percent by 2009. Tunisia's rapid growth, with penetration reaching such high levels in such a short time, is primarily because of its small population of only 9 million people. Figure 2 forecasts the growth of subscriber numbers in key mobile markets of Africa from 2005 to 2011. Figure 2: Key African Markets - CAGR (2005-2011) Source: Portio Research Ltd. In terms of level of competition, most markets in Africa are still not very competitive; with most of the countries having only two operators, barring a few examples, such as Nigeria and South Africa. However, with the proposed privatisation of state-owned operators in Morocco, Nigeria and Tunisia and the proposed issuance of a third GSM licence in Egypt, competition should increase soon and markets should become healthier for it. Nigeria, which has the highest number of players in the mobile market, emerged as the fastest growing mobile market in the region, with a CAGR of 147.3 percent during 2002-2004. This rapid growth in the Nigerian mobile market has been the result of the liberalisation policy and consequent competition in the market, a demonstration of the power governments have in expediting such development. Figure 3 shows the number of MNO competitors in each of the key mobile markets in Africa in 2004. Figure 3: Number of Operators (2004) Source: Portio Research Ltd. Top of page Key Players The key pan-African players in the market are Vodacom, MTN, France Telecom, Orascom, Celtel and Millicom. Vodacom is the largest operator in the region, with 14.4 million mobile subscribers as on 31st December 2004, followed by MTN and France Telecom, respectively. Millicom had the highest growth in revenues during 2003-2004, while the two biggest operators, Vodacom and MTN, reported low revenue growth. Orascom had the highest EBITDA margin, primarily due to its strategy of investing in the emerging mobile markets and consequently, shift their focus from undeveloped mobile markets to the developing markets in the region. Figure 4 compares five of the leading mobile network operators in Africa in terms of their subscriber base (size of the bubble), revenue growth rate and EBITDA margin for the latest completed financial year. Figure 4: Africa - Performance Analysis of Mobile Network Operators Source: Company reports Top of page Copyright © 1998-2009 Africa & Middle East Telecom Week