East African Mobile Communications Market

Frost & Sullivan, May 2012, Pages: 114

East African Mobile Communications Market Set for Robust Growth on the Back of Intensified Competition

The East African mobile communications market is in its growth stage of development. In comparison to most other regions on the continent, East Africa – Kenya, Tanzania and Uganda - is expected to experience greater levels of market competition and growth. While Kenya is the regional leader in terms of the number of subscribers and revenues, Tanzania and Uganda are nonetheless expected to witness strong growth over the next five years. This growth is expected to be driven by greater network investments, continuous product innovation and reducing handset costs.

“Key growth drivers in the East African mobile communications market include strong economic growth and consumer spending, increasing demand for value-adds such as mobile money transfer services and declining handset costs,” notes the analyst of this research. “Rising income levels in these markets are expected to boost uptake of mobile services against a backdrop of low fixed-line network coverage and under-developed banking systems.” With 58.7 million subscribers and a mobile penetration rate of 51 per cent in 2010, the East African market is expected to show strong growth, supported by the preference for mobile communications over low quality fixed-line networks. The total number of subscribers is expected to reach 143.2 million in 2017, representing a compound annual growth rate of 14 per cent. The launching of undersea cables is expected to reduce the cost of telecommunications by up to 60 per cent over the next five years. This development will boost access to, and demand for, mobile internet services in particular.

Mobile Network Operators to Focus on Developing Innovative Solutions and Enhancing Quality of Services

The East African region is still beset by a host of severe challenges. For instance, high tax rates on mobile communications are curbing service uptake. The lack of network roll-out in rural areas, coupled with limited demand for data services, is constraining subscriber and revenue growth. “The East African region has high tax charges on mobile services, which are among the highest in Africa,” explains the analyst. “This limits the demand for mobile communications as the majority of the population continues to be low-income.” The lack of network coverage in rural areas where most of the population resides restricts the expansion of the subscriber base. Considering the ongoing economic slowdown, the lack of demand for data services from corporate clients also threatens to restrain future revenue growth.

“Mobile operators are expected to improve the quality of services through continuous infrastructure investments, such as call-switching capacity, to develop innovative solutions such as mobile money transfer services, and to initiate managed services through outsourcing non-core businesses such as network maintenance,” concludes the analyst. “These strategies will help push demand for mobile services and thereby subscriber and revenue growth.”

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following countries in this research:

- Kenya
- Tanzania
- Uganda

This Frost & Sullivan research service titled East African Mobile Communications Market Tracker analyses industry challenges as well as market drivers and restraints. It offers revenue and expenditure forecasting while discussing the competitive landscape. In this research, Frost & Sullivan's expert analysts thoroughly examine the following countries: Kenya, Tanzania and Uganda.

With a large population and relatively low penetration rate, East Africa's mobile communications market is estimated to witness strong growth due to the increasing demand for mobile communications that is used as a substitute for low-quality fixed line networks. Total number of subscribers is expected to grow considerably between 2010 and 2017, representing a strong compound annual growth. Launching of undersea cables is likely to reduce the cost of telecommunications in the region over the next seven years, which drives the market demand, especially for mobile Internet access.

1. Market Overview

2. Total Market

- 2.1 External Challenges: Drivers and Restraints

- 2.2 Forecasts and Trends

- 2.3 Demand Analysis

- 2.4 Market Share and Competitive Analysis

3. Kenya Breakdown

4. Uganda Breakdown

5. Tanzania Breakdown

6. Conclusions and Strategic Recommendations

7. The Last Word (Conclusions and Implications)

8. Appendix

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