Business
EA mobile phone market to experience a period of growth
Over 19 companies are angling for a share of Eat Africa’s mobile market, that will be worth $9 billion in five years. Photo/FILE
Posted Monday, February 8 2010 at 00:00
This is due to the low level of fixed-line market penetration and the high proportion of population using voice service as a means for telecommunications.
Kenya has the highest number of active subscribers and revenues among the four countries studied by Frost in its review of the region’s mobile markets.
Tanzania, Uganda and Rwanda are, however, likely to witness a significant surge in growth over the next seven years due to increasing network investments, continuing product innovation and reduced handset costs.
Tanzania and Rwanda promise the biggest growth markets — growing by 29.4 per cent and 25 per cent respectively.
Tanzania most competitive
Tanzania is among the most competitive markets in the region, playing host to seven operators — with four more expected in the near future — earning it the highest score on competitiveness in Frost’s report.
The country’s economy has been showing solid growth rates of between 5 per cent and 8 per cent every year since 2000.
Growing at more than 40 per cent per annum, the mobile market passed the 14 million mark mid last year with just four companies —Vodacom, Zain, Tigo and Zantel —in operation.
At a penetration level of less than 40 per cent, growth is set to continue even as average revenue per user continues to fall.
“The driver is mobile. Mobile is an attractive option for those interested in the sector,” said John Nkoma, director-general of the Tanzanian Communications Regulatory Authority.
Often painted as the poster child for regional ICT development, Rwanda has been tipped by Frost to enjoy the highest rate of growth.
Although it is the least competitive and price sensitive market with just two operators, Rwanda’s annual compound growth rate is estimated to hit 29.4 per cent this year.
Mobile penetration is still significantly below the regional average, mostly due to a vicious genocide and a monopolistic market where South Africa’s MTN operated alone until 2006, but now competes with Rwandatel and Millicom.
The prospect of intensified competition has sparked a new subscriber growth phase with over 100 per cent per annum, but at the same time the average revenue per user has fallen below $10 per month.
Frost predicts Uganda will enjoy sluggish growth this year, with the highly competitive market set to continue being highly price sensitive.
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