The Top 10 Mobile Operators in Sub-Saharan Africa
Business Monitor International, August 2010, Pages: 46
‘The Top 10 Mobile Operators in Sub-Saharan Africa’ examines how the largest mobile operators in Sub-Saharan Africa are faring at maintaining the growth that has been the biggest draw for investors to the region.
Identifying which operators have been most successful in achieving profit-making operations in this region, and reasons for success, this report provides insight both to improve the fortunes of struggling operations and to guide operators likely to be in a similar position to the larger operators in a few years.
Key Findings:
- Sub-Saharan Africa is virtually the last big growth frontier in telecoms, the continental average mobile penetration is low at close to 30% at the end of 2009.
- Nigeria is the largest mobile market in Africa, even though it is still in a rapid growth phase with a penetration rate of around 50% at the end of 2009.
- Strategy as well as market size is important to attaining customer growth in African telecoms markets, with increasing access to services, aggressive expansion, lowering costs of access, attractive pricing offers and service quality all key strategies.
- With continuing low demand for postpaid services those able to make prepaid work will survive, successful prepaid operators tend to have large and strong distribution networks and preferential on-network pricing to increase loyalty.
Africa is seen as the last big growth frontier in telecoms, but turning a profit is challenging. BMI looks at how the biggest operators are facing this challenge. Sub-Saharan Africa is seen as virtually the last big growth frontier in telecoms, especially in mobile telecoms. In many markets all over the world, operators are having to accept that large growth in customer numbers is behind them, and that they will have to transform and innovate to continue to stimulate growth in revenues.
However, in Sub-Saharan Africa there is still much growth in customer numbers to be had, and many big international telecoms groups are keen to improve their exposure to this growth to offset the challenges they are facing elsewhere. The 22 markets in this region that BMI regularly covers in our quarterly telecommunications reports had an average mobile penetration rate of 55% at the end of 2009. Given that it is generally the smaller, less developed markets that we do not include in our quarterly coverage (including these instead on an ad hoc basis) such as Chad, Niger or Malawi, the continental average is much lower, closer to 30%. Even the 55% for the 22 most important markets is lower than any of BMI’s other regional averages, as shown in the graphic.
Achieving growth in customer numbers in markets where the penetration rate of any telecommunications services was, until a few years ago, virtually nil, basic infrastructure, including access to power–which is extremely important for rolling out telecoms services–is extremely low and the majority of the population live close to or below the poverty line is a great challenge in itself. Not many years ago, it seemed impossible to many companies. However, some saw the potential and pursued it. Initial roll-outs were limited, and costs were high, but once demand was well demonstrated, services were extended, and the more subscribers flocked to mobile services, the more costs came down. The result has been generally explosive growth and declining ARPUs.
Sub-Saharan Africa appears to offer a great growth prospect to operators, but it has its problems. These have been amply demonstrated by Zain’s retreat from the continent. It is difficult to make or maintain a profit in many of these markets. Although some elements within the Zain management were keen to keep hold of its African portfolio, shareholders were keen to sell in order to see a more rapid return on their investment, because in general the operations in Africa were failing to show a profit.
Making returns on African mobile markets is apparently not the easiest thing to do, and while maintaining growth in customer numbers through the basic formula of expanding the reach of services, and reductions in price where possible, seems to have become an easier task, achieving profitability has been difficult for some. In this report BMI will look at the 10 largest mobile operators in Sub-Saharan Africa, to examine how operators are faring at maintaining the growth that has been the biggest draw for investors, and which of them has been more successful in achieving profit-making operations in this region, and perhaps what has really made the difference and how this knowledge may help improve the fortunes of those who are struggling with ongoing losses or may be in a similar position to the larger operators in a few years.
Because Zain has stopped offering a country-by-country breakdown of its operations since entering into the sale process, the latest data we have from this key player is for Q309. For this reason we have used data from Q309 for this study. At the time of writing, some operators released Q110 data, and most others had of course produced statistics for Q409. However, we want to make as accurate a comparison as possible, so we have picked the point in time of end-September 2009. For more recent data please contact BMI.
Introduction
The Top 10 Mobile Operators in Sub-Saharan Africa
Chart: Sub-Saharan Africa Has A Long Way To Grow
Regional Averages - Mobile Subscribers Per 100 Inhabitants (%)
Nigeria And South Africa Prominent In The Top 10
Table: Top 10 Mobile Operators At Q309
Indicators: MTN Nig, Vodacom SA MTN SA, Globacom, Zain Nig, Safaricom, MTN GHA, Zain Sud, Cell C, Vodacom Tanz, Vodacom DRC
Scale Is Everything
Chart: Relationships Not Totall y Straightforward
Subscribers, Revenues And EBITDA
Chart: Dominance And Margin Not Alw ays Hand In Hand
Comparing EBITDA
Chart: MTN Nigeria Shows Its Mettle
EBITDA Margin
How To Make A Profit?
Case Studies: Can Zain Make A Profit Under Bharti?
Chart: Attraction Is In The Scale, Not The Profits
Zain Africa Financial Results 9M09 (US$mn)
Case Study: Is Vodacom Big Enough To Survive In The New Age Of Consolidation?
Chart: Under Press ure - Nominal Revenue Growth At Vodacom
Revenues By Business, 2008 Vs 2010
Supplementary Section
Nigeria
Mobile
Chart: Nigeria Mobile Market Growth (mn)
(2008-2010)
Market Shares and Net Additions
Chart: Nigeria Mobile Market Shares (%)
(2008-2010)
Table: Nigeria Mobile Market, Q409
OPERATOR: MTN, GLOBACOM (E), ZAIN (FORMERLY CELTEL) (E), STARCOMMS & OTHER CDMA OPERATORS, EMTS (PLUS M-tEL) (E), TOTAL
Table: Wireless Net Additions Market, Q409
OPERATOR: MTN, EMTS (PLUS M-tEL) (E), STARCOMMS & OTHER CDMA OPERATORS, GLOBACOM (E), ZAIN (FORMERLY CELTEL) (E), TOTAL
ARPU and Subscriber Mix
Chart: Nigeria Quarterly Net Additions (mn)
(2008-2010)
Chart: MTN And Zain ARPU Trends (US$mn)
(2008-2010)
Network Development And Strategy
3G
South Africa
Mobile
Chart: South Africa Mobile Market Growth
2005-2009
Chart: Market Share Of Quarterly Net Additions (%)
2005-2009
Table: South Africa Wireless Market, Q309
OPERATOR: VODACOM, MTN, CELL C (E), VIRGIN MOBILE (E), TOTAL
Subscriber Divisions
ARPU
Chart: Monthly Bl ended ARPU (ZAR)
2007-2009
3G
HSDPA And HSUPA
Kenya
Mobile
Chart: Kenya Mobile Market Growth
2006-2009 (mn)
Table: Kenya Mobile Market Q409
OPERATOR: SAFARICOM, ZAIN KENYA, ORANGE, ECONET, TOTAL
Table: Kenya Mobile Market Net Additions Q409
OPERATOR: SAFARICOM, ZAIN KENYA, ECONET, ORANGE, TOTAL
Market Shares
Chart: Quarterly Net Additions By Operator
2007-2009 (mn)
Network Strategies
Subscriber Mix And ARPU
Chart: Zain Bl ended ARPU (US$)
2007-2009
Chart: Safaricom Subscriber Mix (mn)
2006-2009
Network Developments
3G
Chart: Regulator Registers A Surge In Mobile Data Us ers
Number of Mobile Internet Subscribers
Ghana
Mobile
Chart: Ghana Mobile Market Growth
2007-2009 (‘000)
Market Shares
Chart: Mobile Market Shares (%)
2007-2009
Table: Ghana Mobile Market Q409
OPERATOR: MTN, TIGO, VODAFONE, ZAIN (E), KASAPA, TOTAL
Net Additions
Chart: Quarter-On-Quarter Growth Rates
2007-2009 (%)
Chart: Ghana Mobile Market Net Additions
Q307-Q409 (‘000)
Table: Ghana Mobile Market Net Additions Q409
OPERATOR: MTN, TIGO, VODAFONE, ZAIN, KASAPA, TOTAL
ARPU
Chart: MTN And Zain Bl ended ARPU (US$)
2007-2009
Company Strategy and Site Sharing
3G
Sudan
Mobile
Chart: Sudan Mobile Market Growth (‘000)
(2007-2009)
Table: Sudan Mobile Market Q309
OPERATOR: zain sudan , sudani *, mtn , other , TOTAL
Net Additions
Chart: Quarterly Net Additions 2007-2009 (‘000)
(2007-2009)
Table: Sudan Mobile Market Net Additions Q309
OPERATOR: zain sudan , mtn , sudani *, other , TOTAL
ARPU
Chart: Zain And MTN Bl ended ARPU (US$)
Q207-Q309
Network Expansion
3G
Tanzania
Mobile
Chart: Tanzania Mobile Market Growth (mn)
2007-2009
Table: Tanzania Mobile Market Q309
OPERATOR: vodacom , zain tanzania , tigo , zantel (e), ttcl mobile (e), TOTAL
Net Additions
Chart: Quarterly Net Additions (‘000)
2007-2009
Table: Tanzania Mobile Market Net Additions Q309
OPERATOR: vodacom , zain tanzania , tigo , zantel , ttcl mobile (e), TOTAL
Market Shares
Chart: Mobile Market Shares (%)
2007-2009
Subscriber Mix and ARPU
Chart: Zain Bl ended ARPU (US$)
2007-2009
3G
Glossary of Terms
- MTN Nig
- Vodacom SA
- MTN SA
- Globacom
- Zain
- Safaricom
- MTN GHA
- Zain Sud
- Cell C
- Vodacom Tanz
- Vodacom DRC
- Starcomms
- Virgin Mobile
- Orange
- Econet
- Tigo
- Kasapa
- TTCL Mobile
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