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360 Degree Perspective of the Sub-Saharan African Telecommunications Market
Frost & Sullivan, May 2011, Pages: 70
This study covers the state of the Sub Saharan African telecommunications market, by strategically examining drivers and restraints for growth, key trends and their impact on the market, key strategies that CEOs need to consider ensuring market survival as well as identifies the key opportunities for future growth in the market. Following from these, market growth for regional and market segments are forecasted. In addition, an in-depth analysis of the competitive situation including key operators' market strategies is performed,. The base year is 2009 with forecasts running through 2015. The market is assessed based on fixed line, mobile/wireless and internet service segments.
This Frost & Sullivan research service titled 360 Degree Perspective of the Sub-Saharan African Telecommunications Market provides analyses on industry challenges, market drivers and restraints, revenue and expenditure forecasts and current and future strategies. It identifies key opportunities and developments in services and geographies as well as provides guidelines on making sound decisions on technologies and services.
Market Overview
Exponential Growth in Wireless Technologies and Services Drives Telecommunications Sector
With increased growth in the African telecommunications market, competition has intensified. The market is nearing saturation and margins are increasingly coming under pressure. As a result, CEOs have to start considering rejecting strategies aimed at subscriber acquisition. Instead, they need to consider outsourcing as a core strategy, adopt surgical network deployments and develop data strategies for low-cost models. “The key drivers for growth for the telecommunications sector include exponential growth in wireless technologies and services,” notes Birgitta Cederstrom, Business Unit Leader for ICT Africa, analyst for the research. “Growing demand for broadband and data services, especially by the enterprise sector, intensifying competition and mass market targeted strategies will define the market landscape.” Wireless technology has become the primary mode of communication in Africa and continues to enjoy double-digit growth. This accelerated growth has attracted new participants into the market, with the resulting competition compelling operators to become more creative in their product offerings.
“Mobile money is the main offering for mobile providers while end-to-end connectivity and communication services have become important differentiators in the internet services market,” remarks Birgitta Cederstrom. “Fixed mobile convergence will be a key future differentiator in both the mobile and fixed line service segments.” Enterprise data services have emerged as a key cash cow for telecoms providers. Allied to this trend has been the increased focus to service this market.
Rural Expansion Emerges as a Critical Component of Operator Strategies
Many challenges still confront market participants. For instance, the low level of foreign direct investment is leading to the slow development of the broadband market in the region. Low disposable income levels, paralleled by the high cost of computers, are limiting consumer demand for broadband services. The market continues to be hampered by intensifying competition and near saturation as operators remain hesitant to expand into rural areas. At the same time, the cost of doing business in Sub Saharan Africa has risen notably and is likely to increase further with rural expansion. Furthermore, device penetration and affordability remains low, and infrastructure shortages remain a key hindrance for sound network and service rollout.
Rural expansion has become critical for operator strategies, as this market presents the largest growth potential and helps operators address the issues of urban market saturation. Outsourcing, shared services and infrastructure sharing are also key in protecting margins as operating costs continue to soar. Fixed mobile differentiation is a strategic response that both mobile and fixed line operators continue to explore, albeit slowly. “Operators that move into the rural markets and do so fast will reap the first mover advantage in the short to medium term,” advises Birgitta Cederstrom. “Outsourcing, managed services and infrastructure sharing are set to become critical aspects of operator strategies.”
Technology
The following technologies are covered in this research:
- Mobile
- Fixed line
- Broadband
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