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East African Mobile Communications Markets
Frost & Sullivan, Oct 2009, Pages: 246
With current 37.6 million mobile subscribers with a penetration rate of 30.8%, the east African mobile communications market is expected to show strong growth based on increasing demand for mobile communications that is used as a substitute for low quality fixed-line networks. The total number of subscribers is expected to reach 99.5 million in 2015, representing a compound annual growth rate of 14.9%. The launching of undersea cables is expected to reduce the cost of telecommunications by 60.0% over the next seven years, which drives the demand growth in particular of mobile internet access.
This Frost & Sullivan research service titled East African Mobile Communications Markets provides a comprehensive analysis on the industry challenges, market drivers and restraints, revenue and expenditure forecasting and competitive landscape. In this research, Frost & Sullivan's expert analysts thoroughly examine the following technologies: code division multiple access (CDMA), global system for mobile communications (GSM), general packet radio service (GPRS), high-speed downlink packet access (HSDPA) and wideband code division multiple access (WCDMA). This research service analyses the following four mobile communications markets in east Africa: Kenya, Tanzania, Uganda and Rwanda.
Inexpensive Handsets and Increasing Network Investments to Drive the East African Mobile Communications Market
The east African mobile communications market is in its growth stage, and is likely to experience the highest market competition and development in Africa. The east African region includes Kenya, Tanzania, Uganda and Rwanda. In 2008, Kenya had the highest number of active subscribers and revenues among the four countries. Tanzania, Uganda and Rwanda are likely to witness significant growth over the next 7 years by increasing network investments, continuing product innovation and reducing handset costs. “The key drivers of the east African mobile communications market include rising gross domestic product (GDP) growth rates, increasing demand for mobile money transfer services, and declining mobile handset costs,” says the analyst of this research. “Despite the low disposable incomes of the east African consumers, the rising GDP growth rate indicates greater consumer spending on mobile communications due to the low fixed-line network coverage, underdeveloped banking system, and the current limited availability of inexpensive handsets.”
At present, there are 37.6 million mobile subscribers in east Africa, with a penetration rate of 30.8 per cent. The market will witness strong growth based on the burgeoning demand for mobile communications that is a substitute for low quality, fixed-line networks. The total number of subscribers is expected to reach 99.5 million in 2015, at a compound annual growth rate (CAGR) of 14.9 per cent. The launching of undersea cables is anticipated to reduce the cost of telecommunications by 60.0 per cent over the next 7 years, particularly boosting the demand for mobile Internet access.
Mobile Network Operators to Enhance their Services to Boost the Demand for Mobile Services
There are challenges faced by the market participants like high tax rate on mobile services curbing service uptake, lack of network rollout in rural areas constraining subscriber and revenue growth and low demand for data services. Additionally, data services uptake by corporate clients has dwindled due to the economic downturn. “The east African region imposed one of the highest taxes on mobile services in Africa, limiting the demand for mobile communications due to the majority of low-income population,” explains the analyst. “The lack of network coverage in rural areas, where most of the population resides, restricts the expansion of the subscriber base.”
Mobile network operators are anticipated to enhance their services by continuously investing in infrastructure like call-switching capacity. This will help in developing innovative solutions like mobile money transfer services, and initiates managed services by outsourcing non-core businesses like network maintenances. These strategies will step-up the demand for mobile services, boosting subscriber and revenue growth.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By Geographic Region:
- Kenya
- Tanzania
- Uganda
- Rwanda
Technologies
The following technologies are covered in this research:
- CDMA
- GSM
- GPRS
- HSDPA
- WCDMA
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