African Communications Market : Onward and upward (Research Repo

This is an update to the Convergence Partners report entitled “African Telecommunications Market: Last Frontier For Growth” (Vol.1 No.1 of 2007) (“Report 1“).

Conclusion: The African communications growth story can no longer be viewed as a frontier opportunity as more and more players from developed markets enter the African market.

Rather, the market is showing signs of greater maturity reflected by, amongst other: (i) increased competition; (ii) reducing gross margins; (iii) declining ARPUs; (iv) greater complexity of product offering and mobile payment services; (v) active attempts by incumbent mobile and fixed-line operators to expand into other parts of the value chain; and (vi) the emergence of infrastructure sharing models. While subscriber growth remains superior to other regions, with significant pent-up demand remaining, these changes in the communications landscape is forcing operators to rethink their strategies and focus on the next wave of growth.

Significantly, there have been a number of major developments that will catapult the African communications market into another league from both a cost and bandwidth perspective. These include the arrival of new international submarine fibre optic cables such as Seacom connecting the East African seaboard to international submarine fibre networks and the accelerated liberalisation of African communications markets.

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