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Aat: Rosalind Craven

Edit: Laura Holland

Pdcti:Angela Evans/Lisa Church/Melissa Cuk

Pbie: Richard Londesborough/Jonathan Feroze

Cp Deadie: 31 July 2009

2009 Bie Mit Iteatia. A igt eeved.

All information, analysis, forecasts and data provided by Business Monitor International Ltd is for the

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Pbied b BusInEss MonITor InTErnATIonAl lTD

sPECIAl rEPorT

Value Added Services In

Africa The Way Forward

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Business Monitor International Ltd

VAluE ADDED sErVICEs In AfrICA ThE WAy forWArD

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sPECIAl rEPorT

CtetItdcti ............................................................................................................ 5

VAS In Africa ............................................................................................................................................................. 5

chart: Growth SlowinG within Five YearS ........................................................................................................................5

Mobile Growth In BMIs 22 African Markets - Historical Data and Forecasts

Combatting Falling ARPUs ....................................................................................................................................... 5

chart: not one Market eScapeS DownwarD trenD .......................................................................................................5

MTN ARPUs Declining Q109

SMS .......................................................................................................................................................................... 6

chart: StaGnateD Growth ........................................................................................................................................................6

Gabon SMS Volumes

chart: conSuMerS chooSinG the cheapeSt option .........................................................................................................7

Uganda SMS Volumes H208 (mn)

Mobile Internet And Downloads ................................................................................................................................ 7

chart: GrowinG Data ..................................................................................................................................................................7

MTN and Vodacom South Africa Data Revenues (ZARmn)

Mobile Banking ......................................................................................................................................................... 8

chart: real DeManD leaDS to exploSion in Growth ......................................................................................................8Safaricom Kenya M-PESA

Telemedicine ............................................................................................................................................................. 9

How To Move Forwards .......................................................................................................................................... 10

Mbie fecat Q309 sb-saaa Aica ........................................................... 11

Gaa ..................................................................................................................................11

chart: Ghana inDuStrY trenDS - Mobile Sector ............................................................................................................11

2006-2013

table: Ghana telecoMS Sector Mobile hiStorical Data & ForecaStS ............................................................11

indicators: No. of Mobile PhoNe SubScriberS (000), No. of Mobile PhoNe SubScriberS/100

iNhabitaNtS, No of Mobile PhoNe SubScriberS/100 fixed-liNe SubScriberS

Kea ...................................................................................................................................11chart: kenYa inDuStrY trenDS - Mobile Sector .............................................................................................................12

2006-2013

table: kenYa telecoMS Sector Mobile hiStorical Data & ForecaStS .............................................................12

indicators: cellular Mobile PhoNe SubScriberS (000), Mobile PhoNe SubScriberS/100

iNhabitaNtS, Mobile PhoNe SubScriberS/100 fixed-liNeS iN Service

nigeia .................................................................................................................................12

table: niGeria telecoMS Sector Mobile hiStorical Data & ForecaStS, 2006-2013 ....................................12


iNhabitaNtS, No of Mobile PhoNe SubScriberS/100 fixed-liNe SubScriberS, No. of 3G PhoNe

SubScriberS (000), 3G Market aS % of eNtire Mobile Market

chart: niGeria inDuStrY trenDS - Mobile Sector ..........................................................................................................13

2006-2013

st Aica ..........................................................................................................................13

chart: South aFrica inDuStrY trenDS - Mobile Sector ...............................................................................................13

2006-2013

table: South aFrica telecoMS Sector Mobile hiStorical Data & ForecaStS ...............................................13


iNhabitaNtS, No of Mobile PhoNe SubScriberS/100 fixed-liNe SubScriberS, No. of 3G PhoNe

SubScriberS (000), 3G Market aS % of eNtire Mobile Market

sda ...................................................................................................................................14chart: SuDan inDuStrY trenDS - Mobile Sector .............................................................................................................14

2006-2013

table: SuDan telecoMS Sector Mobile hiStorical Data & ForecaStS 14


iNhabitaNtS, No. of Mobile PhoNe SubScriberS/100 fixed-liNe SubScriberS

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Tazaia ...............................................................................................................................15

chart: tanzania inDuStrY trenDS - Mobile Sector .......................................................................................................15

2006-2013

table: tanzania telecoMS Sector Mobile hiStorical Data & ForecaStS .......................................................15


iNhabitaNtS, No of Mobile PhoNe SubScriberS/100 fixed liNe SubScriberS

ugada ................................................................................................................................15

table: uGanDa telecoMS Sector Mobile hiStorical Data & ForecaStS ..........................................................16


iNhabitaNtS, No of Mobile PhoNe SubScriberS/100 fixed-liNeS SubScriberS

chart: uGanDa inDuStrY trenDS - Mobile Sector ..........................................................................................................16

2006-2013

Wet ad Ceta Aica .......................................................................................................16

chart: weSt anD central aFrica inDuStrY trenDS Mobile Sector .......................................................................16

Mobile Subscribers/100 Inhabitants, 2006-2013

table: weSt anD central aFrica telecoMS Sector Mobile hiStorical Data & ForecaStS ...................... 17

indicators: caMeroon - No. of Mobile PhoNe SubScriberS (000), No. of Mobile PhoNe

SubScriberS/100 iNhabitaNtS cte Divoire - No. of Mobile PhoNe SubScriberS (000), No. ofMobile PhoNe SubScriberS/100 iNhabitaNtS Drc - No. of Mobile PhoNe SubScriberS (000), No. ofMobile PhoNe SubScriberS/100 iNhabitaNtS Gabon - No. of Mobile PhoNe SubScriberS (000),No. of Mobile PhoNe SubScriberS/100 iNhabitaNtS Mali - No. of Mobile PhoNe SubScriberS (000),No. of Mobile PhoNe SubScriberS/100 iNhabitaNtS Mauritania - No. of Mobile PhoNe SubScriberS(000), No. of Mobile PhoNe SubScriberS/100 iNhabitaNtS SeneGal - No. of Mobile PhoNeSubScriberS (000), No. of Mobile PhoNe SubScriberS/100 iNhabitaNtS

ste Aica ....................................................................................................................18Angola..................................................................................................................................................................... 18

table: Southern aFrica telecoMS Sector Mobile - hiStorical Data & ForecaStS .....................................18

indicators: anGola - Mobile PhoNe SubScriberS (000), Mobile PhoNe SubScriberS/100iNhabitaNtS, % chG y-o-ybotSwana - Mobile PhoNe SubScriberS (000), Mobile PhoNeSubScriberS/100 iNhabitaNtS, % chG y-o-yMauritiuS - Mobile PhoNe SubScriberS (000), MobilePhoNe SubScriberS/100 iNhabitaNtS, % chG y-o-yMozaMbique - Mobile PhoNe SubScriberS (000),

Mobile PhoNe SubScriberS/100 iNhabitaNtS, % chG y-o-y

chart: Southern aFrica inDuStrY trenDS Mobile Sector .............................................................................................. 19

no. of Mobile Subscribers (000) 2006 - 2013

Botswana ................................................................................................................................................................ 19

Mauritius ................................................................................................................................................................. 19

Mozambique ........................................................................................................................................................... 19

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sPECIAl rEPorT

Itdcti

VAS In Africa

Africaisbignewsintelecoms.Asopportunitiesfor

straightforward subscriber growth dwindle in other

parts of the world, investors are ocking to the conti-

nentwheretherearestillestimatedtobeatleast500mn

potentialnewmobilesubscribers.Attheendof2008,

theaveragemobilepenetrationrateofthe22African

mobile markets that BMIregularlysurveyswas55%.

Bearinginmindthatincludedinthisselectgroupare

the most developed mobile markets in Africa, such as

SouthAfricaandAlgeria,theaverageforthecontinent

aswholewascertainlymuchlower.Themobilesub-scriberyear-on-year(y-o-y)growthrateacrossthese

22countrieswasover33%in2008.Clearly,thereis

excellent growth potential still in these markets.

Combatting Falling ARPUsDespitetheexcitinggrowthprospects,however,African

mobile markets have their problems, and one of the most

signicant for investors looking to the future is expressed

in average revenue per user (ARPU) gures. Taking

datafromAfricaslargestmobileoperatorbycustomer

numbers,MTN,asanexample,wecanseethatARPUs

acrossAfricaaregenerallyverylow,andaregetting

lower. MTN is active in 16 markets in Africa. For the

rst quarter of 2009, the highest ARPU it recorded on

the continent was in its home market of South Africa,where blended ARPU was US$17 for Q109. The lowest

wasUS$5inSudan.Ofthe16countries,morecamein

withARPUsclosertothelowerextremeofSudanthan

theupperlimitofSouthAfrica.Whatismore,every

single one of these ARPUs fell during the rst quarter of

2009, by an average of 11% in local currency terms.

AtrendoffallingARPUsmayhavebeenexacerbated

bythecurrenteconomicclimate,butthetrendisnone-theless there. African mobile markets are generally

verypricesensitive,andascompetitionincreasesin

manycountries,pricewarsarepushingpricesdown

andaffectingARPUs.Also,theabundantgrowththat

is still available in many markets is almost entirely at

the bottom end of the market. As mobile companies

arestrivingformoregrowth,theyarereachingoutto

offerservicestothepoorerendofsociety,gainingnew

subscriberswhowillhaveincreasinglyloweramounts

ofmoneytospendonmobileservices,soARPUswillnaturallygodown.Whilethenumberofsubscribersis

still rocketing up, operators are willing to put up with this

patternofdecline,butalthoughtheirrevenuescontinue

to increase, the pattern will increasingly squeeze their

prot margins. Also, growth at this rate cannot continue

forever,andthenumberofnetadditionswilleventually

begintodiminish.

Although African markets face very different dynam-

ics from the saturated markets of Western Europe andelsewhere, operators are likewise facing the problem of

Gwt swig Witi five yeaMobile Growth In BMIs 22 African Markets - Historical Data

and Forecasts

e/ = estimate/orecast. Source: BMI

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2005

2006

2007

2008

2009e

2010f

2011f

2012f

2013f

Mobile phone subscribers, '000

nt oe Maket Ecape Dwwad TedMTN ARPUs Declining Q109

Source: BMI

0

2

4

68

10

12

14

16

18

20

SouthAfrica

Nigeria

Benin

Congo-Brazzaville

Liberia

Swaziland

Mascom-

Botswana

Bissau

Cameroon

CotedIvoire

Ghana

Conakry

Uganda

Rwanda

Zambia

Sudan

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%YTD ARPU (US$)

Local Currency q-o-q % change (RHS)

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diminishing returns and need to nd new ways to keep

theirrevenuesgrowing.AsinEurope,value-addedserv-

ices are the key to this process, although the necessary

approach is quite different. As yet, there is only a fairly

limited value-added services market in Africa, but it is

startingtogrowinvariousareas.Thesegreenshootsof

VASgrowtharesomethingthatoperatorsneedtoobserve

and take note of if they are to nurture them into greater

expansion,oremulatethesuccesselsewhere.

For most of the millions of new mobile users added to

the market, especially during the past two years, this has

been their rst access to any type of communications

service.Thepenetrationofthemuchlongerestablished

xed-line services, and of xed-line-based internet anddata services, isbarely above1% in themajorityof

African countries.As new users of communications

services,mostmobilesubscribersareusingonlybasic

voice services. Indeed, many of the rst VAS to be offered

bymobileoperatorswerevoicebased,suchasmissed

call notication and voice mail services. However, if

operatorswanttoreallydiversifytheirrevenuestreamsto

keep them resilient, they need to nd ways to move new

andestablishedAfricanmobileconsumersawayfrom

basicvoiceservicesintodata-basedservices.Althoughthemovementmaybesmalltobeginwith,buildinga

substantial trendwillbevery importantforensuring

theirfuturegrowth.

SMS

Short messaging service, commonly known as SMS,

isseenasessentiallythemostbasicofVAS.Inmore

established mobile markets, SMS has even become

effectivelyacoreservice,butinAfricaitcertainlystill

countsasVAS.

Assomethingthatcanbeacheapandsimplecommuni-

cationtool,SMSmaybeseenasadoorwaytoawider

market for more complex VAS. So far, however, the door

refusestoopenveryfar.InGabon,aprettydeveloped

mobile market by African standards, information from

thetelecomsregulatorshowsthatgrowthinSMSusage

hasstagnated,whilevoiceminuteusagehascontinued

togrow.

Voice trafc within the network has shown spikes of

growthinresponsetoon-netvoicepromotionsrunby

the operators. No such promotions have taken place for

SMS,andtheusagelevelshaveremainedthesame.The

regulatoralsoobservesthatSMSusagehasgenerally

grownmuchslowerthanvoiceusageandthat,while

voiceusagehascontinuedtogrowsteadily,thenumber

of text message sent during the rst three months of 2009

isbasicallythesameasthatforthesameperiodin2008.

EventhoughthenumberofmobileusersinGabongrew

by15%during2008,thelevelofSMSusagestayedthe

same,whichmeansthattheactualnumberofmessages

sentpersubscriberactuallywentdown.

ComparedtomanycountriesinAfrica,Gabonhasavery

highpercapitaincomeandanaccompanyingliteracyratethatiswellabovetheregionalaverage.Thismight

beexpectedtofavourthegrowthofSMS,buttheservice

isclearlynotgrowing.Generallylowerlevelsofliteracy

acrossmanyAfricanstatescouldbeseenaspartofthe

barrier to expansion in SMS uptake, a view that would

lead to general pessimism for the prospects of it taking

off in the near future. However, a recent growth spurt

inUgandashowsthatthepotentialisthere.

The Uganda Communications Commission (UCC)has released gures that show that the SMS volumes

inthecountryaregrowingrapidly,andinsomecases

outpacingcallminutevolumes.Bytheendof2008,

there were 8.554mnmobile subscribers inUganda,

accordingtotheregulator,upfrom5.163mnattheend

of2007.SMSusehasbeengrowingthroughout2008.

In the nal quarter of the year, 190mn SMS were sent

byUgandanmobilesubscribers,comparedto116mn

SMSsentinQ308,showing64%growthinnumber.

TheUCC divides its SMS statistics into thosesentwithin one network, those sent between networks and

January February March Q1

On-net SMS 16.5 14.3 16.4 47.2

Voice minutes 115 117.3 138.1 370.4

Off-net SMS 2.7 2.3 2.4 7.4

Voice minutes 21.8 20.6 22.4 64.8

International SMS 0.8 0.7 0.8 2.3

Voice minutes 19.4 18.7 20.3 58.4

stagated GwtGabon SMS Volumes

Source: BMI

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sPECIAl rEPorT

thosesentinternationally.Allthreecategoriesshowed

a distinct rise in volume between the two quarters, but

the most notable increase was in cross-network SMS.

It is in the cross-network arena that SMS leaped ahead

of voice calls. Over the same period, cross-network

voice calls actually fell and were overtaken by cross-

network SMS.

This phenomenon is almost certainly about price.

Uganda has a very competitive mobile market with

ve active operators, and price is a key issue. The

networks often offer very low deals on on-network

calls,inordertodrawinsubscribers,butcross-net-

work calling remains relatively expensive. It would

appearthatUgandansareincreasinglyseeingSMSasapreferablealternative.

BMI believes that price will be the key to driving SMS

usagevolumesup.Ofcourse,ifSMSisseentoomuch

asacheaperalternativetovoicecalls,thenpromotingits use may stunt call volume growth. The market that

theoperatorshouldbetargetingisthemarginalcalls,

quite likely to be cross network, that mobile users may

consider too expensive to be worth making. SMS can

bepresentedasamoreaffordablealternativetothecalls

that are not made because the benets are outweighed

bythecost.ThegrowthinUgandashowsthatthiscan

beeffectiveandboostSMSuse.

OnceconsumersbecomeaccustomedtoSMSasanin-tegral part of their mobile use, they will be more likely

tobeopentootherVAS,especiallythosewhicharealso

basedonSMS.Informationservicesareaverypopular

VAS,andonethathasgenerallybeenprovidedover

SMS.SMSalsooftenformspartoftheuserinterface

formorecomplexVAS.

Mobile Internet And Downloads

Many,ifnotmost,mobileoperatorsinAfricadooffer

some kind of internet connection over mobile, and some

basiccontentdownloadservices,suchasringtonesor

wallpapers. However, many of these services will not

really come into their own until 3G makes them more

efcient. Even in markets where 3G has been launched,

uptake of these services has been generally limited. In

Tanzania, for example, where VodacomclaimsitwasthesecondcountryinAfricatohave3Gservices,after

SouthAfrica,thenumberof3Gusersisbelievedtobe

verylow.

SouthAfrica,however,tellsasomewhatdifferentstoryandmayactassomethingofamodelforwhatopera-

torsinotherscountriescanaimtoachievewiththeir

3Gservices.SouthAfricaisoneofthemostadvanced

mobile markets in the continent. Mobile penetration

ofcially passed the 100% mark during 2008. Although

SMSremainthemostpopulartypeofVAS,evidence

suggeststhatnon-SMSservicesarecontributingtoan

ever-largershareofmobileoperatorservicerevenues.

Apart fromSMS, themostcommonmobileVASin

SouthAfricaarethoserelatedtowebbrowsing,whichincludesdownloadablecontent.

Cme Cig Te Ceapet optiUganda SMS Volumes H208 (mn)

Source: UCC

0

20

40

60

80

100

120

On network Of f network I nternational

Q308 Q408

Gwig DataMTN and Vodacom South Africa Data Revenues (ZARmn)

MTN fgures are given or the year ending December o the date indicated. Vodacom

fgures are or the year ending the ollowing March. Source: MTN, Vodacom

0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008

MTN Vodacom

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Market leaders Vodacom and MTN offer the broadest

rangeofmobileVAS.Bothoftheseoperatorshave3G

networks, the coverage and quality of which continue

toincrease.Theamountofdataservicerevenue,asa

proportion of the total service revenues reported by

MTNandVodacom,continuestorise.Bytheendof

2008,non-voiceservicesaccountedfor12.4%ofMTNs

service revenues, up from around 6% in the rst half of

2005.Ofallnon-voiceservices,SMSaccountedfor63%,

down from 79% a year previously, proving that other

dataandmultimediaservicesaregrowinginpopularity.

In March 2009, at the end of its nancial year, Vodacom

reported a 29.7% year-on-year (y-o-y) increase in data

revenuesinSouthAfricatoZAR6bn,withdatanow

comprising 10.9% of the operators revenues (up from8.1%in2006).Datarevenuefromconnectivityandus-

age,excludingmessagingservicessuchasSMS,were

up by 69.3% y-o-y.

Othersignsthatthepopularityofmobilewebservices

isbeginningtogrowcomefromtheStateoftheMobile

Webreportproducedonaregularbasisbyleadingmobile

webbrowsingsoftwareproducerOpera. The April 2009

reportincludedaspecialfocusonAfricaandrevealed

strong growth in several markets. South Africa was themost active market in Africa in terms of pages viewed

usingtheOperaMinimobilewebbrowsingtool,and

came sixth out of all the markets that Opera assesses,

havingleapedaheadofPoland.Thenumberofpages

viewedhadgrown173.2%y-o-yfromApril2008,and

the number of unique users of the product had 68.9%

overthesameperiod.Nigeriaalsomadethetop10for

the rst time, with the number of pages viewed having

expanded 7,904.7% while the number of unique users

grew 2,352.9% y-o-y. These insanely high growth ratesreect the fact that in April 2008 there was only a fairly

negligiblenumberofmobilewebusersinNigeria,but

that by April 2009 this had grow to a signicant number,

showingthatmobilewebbrowsinghasstartedtobecome

amainstreamservice.

EvidentlythereispotentialtogetAfricanmobileus-

ersonthewebontheirhandsets,butthereareseveral

barriers to this. The rst of which is mentioned in the

introduction andSMS sectionsof thisreport,in thatmostmobileusersareveryunaccustomedtousingtheir

phoneforanythingotherthanvoiceservices.Another

potential barrier is the low availability of handsets

thatarecompatiblewithwebbrowsing,whetherbya

shortfallinsupplyorprohibitivelyhighcost.Another

issue is, of course, the cost of the service. However,

itisnotonlyloweringthiscostthatisneededtodraw

inmoreusersbutalsothepromotionofmobileweb

accessassomethingthatisusefultopeopleandworth

spendingtheirlimitedfundson.

Mobile Banking

Thislastpointtouchesuponanissuethatwillalsobe

important for promoting the uptake of VAS in general

in Africa, and that is nding services that are genuinely

usefultopeopleandmeetagenuineneed.Thegrowingsuccess of mobile banking and payment services in

certain pockets of the continent, most notably in East

Africa,hasalreadydemonstratedthattherightservice

can garner quick support.

There is a distinct lack of access to banking services.In Kenya, for example, where mobile banking has

found success, a report fromPriceWaterhouseC-

oopersindicatesthat,in2006,18%oftheKenyan

population was formally banked. At the same time,

mobilepenetrationwasonlya littlehigherat20%,

but since then it has rocketed and is projected to reach

nearly 60% by the end of 2009. Mobile operators

increasingly have access to the very large unbanked

population and through mobile banking can offer

themausefulandpracticalservicethatcanhaveanimpactontheirlives.

rea Demad lead T Expi I GwtSafaricom Kenya M-PESA

Source: Saaricom

0

20

40

60

80

100

120

140

Registered users of M-

PESA service (mn)

Value of person to

person transfers in the

month indicated

(KESbn)

Cumulative value of

person to person

transfers to the month

indicated (KESbn)

Sep-07 Mar-08

Sep-08 Feb-09

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sPECIAl rEPorT

SafaricomsM-PESAserviceinKenyaisthebiggest

success story in African mobile banking. The service,

and others like it, when they are at their best, offers a

true alternative to a bank account, although they can

alsobeavaluableadditionforconsumerswhoalready

have access to a bank. M-PESA offers a wide range of

servicesandallowscustomerstodepositmoneyintoan

accountandwithdrawit,eitheratATMmachinesorat

registeredM-PESAvendors.MoneyfromanM-PESA

accountcanalsobeusedtosettleawiderangeofbills

andcanbetransferredtoanotherindividualsaccount.

UnregistereduserswithouttheirownM-PESAaccount

canalsohavefundstransferredtothembyaregistered

usersoftheservice.Peoplewhohavemovedtourban

areas to nd work can easily send money home to theirfamiliesinmoreremoteareas.Itisalsoamoresecure

wayforownersofsmallbusinessestostoretheircash,

andthesystemcanalsobeusedfordealsbetweensmall

businesses.

DatafromSafaricomshowthatM-PESAhasseenim-

pressive growth. From having only 363,000 registered

usersinSeptember2007,theuserbasemultipliedmore

than10timesoverthespaceofayeartoreach4.14mn

inSeptember2008.Thevolumeofmoneybeingtrans-ferred from person to person has likewise increased, from

KES3bn (US$39.9mn) in the month of March 2008 to

KES14.5bn (US$192.9mn) in the month of February

2009. By the end of February 2009, a cumulative total

ofKES118.1bn(US$1.6bn)hadbeentransferredfrom

persontopersonusing theservice.This excludesall

fundsthatweredepositedandthenwithdrawnbythe

sameuser,orusedtopayforbillsormobileairtime.

ThesuccessofM-PESAhasshownthattheredoesex-ist a willing market for mobile money services. Other

operatorshavebegunlaunchingmoreandmoreserv-

ices.ThesearecroppingupalloverAfrica,butthere

isaconcentrationofactivityintheEastAfricaregion,

astheserviceisalreadyestablishedthere.Pan-African

operatorZainchosethisregionfortheinitiallaunch

ofitsZAPmobilemoneyservice,whichofferssimilar,

if at rst more limited, services to M-PESA. Uganda

Telecomhasdevelopedaproductofitsown,andMTN

has likewise found success for its recently launchedservice,alsoinUganda.

France TlcomhasalsolauncheditsownOrange

Moneyservice,butalthoughithasaccesstoEastAfrica

through its Kenyan network, it has instead chosen to

launch rst in Cote dIvoire. France Tlcoms West

African markets are where it is better established, so

this might make them an obvious choice for the launch

of this service. However, the main reason, according to

a company representative, is that France Tlcom pre-

ferred to target a market where no alternative product is

offered, rather than a proven market where competitors

have already made headway. This means it is up to France

Tlcom to get mobile money service off the ground.

Following a launch in the rst quarter of 2009, no data

is as yet available on the level of take-up.

Withthepossibledevelopmentofinternationalmobile

moneytransferandpaymentservices,thepotentialfor

mobile banking becomes even greater. Safaricom is

working with Vodafone,oneofitsprinciplesharehold-

ers,ontrialsofaninternationaltransferservicethatcould

see migrant workers using Vodafone and Safaricom to

sendhomeremittancefromlucrativejobsabroad.Zain

has also revealed that it is working with the central

banks of Uganda, Tanzania and Kenya on a regional

international money transfer service that would workin harmony with its One Network free roaming service,

whichcouldseemobilemoneybecomeanintegralpart

ofsmall-scaletradewithintheregion.

Going international could have great benets for the

mobileoperators,asitcouldseethenumberofindi-

vidualtransfers,andthesumsofmoneyinvolved,go

up signicantly, and thus generate greater revenues

for them. However, there are obviously many logis-

ticalandlegalissuestoovercome,butthepotentialisgreat.

Telemedicine

TherapidspreadofmobileservicesacrossAfricahas

manyveryexcitedaboutthepotentialeconomicand

socialimpactthatwidespreadcommunicationsserv-

ices could have. Mobile banking, as described above,

isonesuchapplicationthathasthepotentialtoimpact

the functioningof economies inapositivewayand

hasfar-reaching effects.Anothersuchapplication istelemedicine.

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10 Business Monitor International Ltd


Like banking services, health services are all but

inaccessibleinmanypartsofAfrica,andcanbevery

limited where they are available. A quote from Voda-

fonesstrategydirectorTerryKramercontrasts2.2bn

mobile phones in the developingworldwith 11mn

hospitalbedsinthesameregions.Thereisobviouslya

seriouslimittowhatcanbeofferedviaamobilephone

bywayofhealthservices, butoperators areincreas-

ingly working with health organisations to nd ways

inwhichamobilecanfacilitatebetterhealthservices

indevelopingregions.

A joint study published byVodafone and the UN

called mHealth for Development: The Opportunity of

Mobile technology for Healthcare in the DevelopingWorldrevealsthatSouthAfricaandUgandahave

been the quickest early adopters of mobile health, or

mHealth, in Africa by taking part in numerous stud-

iesandtrials.

One programme in Uganda saw a multiple choice quiz

on HIV/AIDS sent out to 15,000 mobile users on the

Zain network. The recipients were offered free airtime

for successfully completing the quiz and invited to go

forvoluntarytestingandcounsellingatalocalhealthcentre. Reports stated that just under one in ve recipients

responded, and the number of people seeking testing at

the centre in question increased from 1,000 per week to

1,400 per week over a period of six weeks.

Similarprojectshave been launchedinSouthAfrica

that promote HIV/AIDS education and testing. A more

unusualuseofmobiletechnologyformedicalpurposes

thathasalsobeentrialledinSouthAfricaisSIM-enabled

pillbottlethatallowshealthprofessionalstomonitorifpatients are taking their tuberculosis medication as they

should.Theprojectapparentlyledtoanincreaseincom-

pliance from 22% to 90% among those taking part.

In February 2009, the BBC reported that health work-

ersinKenyahadusedtheEpiSurveyorapplication,

downloadedontomobilephones tohelp effectively

track and contain the rst outbreak of Polio that the East

Africancountryhadseenfor20years.TheEpiSurveyor

platform allowed for a faster ow of data from treat-ment centres to central control ofces that allowed a

fastandeffectiveallocationofresources,including

targeted distribution of vaccines, that allowed the

outbreak to be contained.

While such services t more comfortably into mobile

networks social responsibility programmes, there is

potentialin thefutureforbigcontractswithgovern-

ments and other health service providers as the mHealth

becomes better established. The greater use of the

mHealth application will also help in mobile users

acceptanceofthemobilephoneasmorethanabasic

voicecommunicationstool,openingthedoortofurther

VASalittlebitwider.

How To Move ForwardsThespreadofmobilehasalreadyhadabigimpacton

thelivesofmanyAfricans,butithasthepotentialto

go much further. In order to keep growing and keep

attractinginvestment,themobilecompaniesneedtheir

businesses to remain attractive and prot making, even

after the growth in customers numbers eventually

beginstoslow.

VAS has the potential to be big in Africa. Signicant

growthmaybesomewayinthefuture,butoperatorsandotherinterestedpartiesneedtodosomethingabout

it now to be well placed to take advantage of future

growth.BMIconsidersthatSMSmaybethewayinto

this market and that operators need to nd a way to

promote their use. The best way to do this is likely to be

throughpricing,astheexperienceofUgandashowsus

that,ifthereisapriceadvantagetousingSMS,mobile

customerswillusethem.

The other main tactic that should be looked at isthesearchfortrulyusefulandpracticalVAS.The

success of mobile banking shows that cash-strapped

consumerswillpayfornewservicesiftheyaretruly

usefullytothem.Nokiahasrecognisedthisimportant

fact,andthroughitsnewlyestablishedEastAfrican

forums,itisencouraginglocaldeveloperstocome

up with their own applications, in an attempt to nd

Africas killer applications that will spring open the

market. This is a sensible move, but, even so, the

dramatic expansion of Africas VAS market is likelyto take some time.

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11Business Monitor International Ltd

sPECIAl rEPorT

Mbie fecat Q309 sb-saaa Aica

GaaOperatorresultsshowthatthetotalnumberofmobilesubscribersinGhanaattheendof2008wasslightly

higher than we had estimated. There were in fact

11.777mnmobilesubscribersinGhanaattheendof

2008, 2.5% higher than the 11.482mn that we had

previously estimated.11.777mn gives a penetration

rate of 49.2 mobile subscribers per 100 inhabitants. It

alsorepresentsanannualgrowthrateof52%,andnet

additionsfortheyearof4.173mn.

Becauseofthisslightlyhigherresultsfortheendof2008,

therestofourforecastshavealsobeenadjustedupwards.By

the end of 2009, we expect that the mobile subscriber base

will have grown to 15.095mn, and the penetration will have

reached 61.8%. After ve years, in 2013, we expect to see26.722mnmobilesubscribersand101.1%penetration.

It should be remembered, however, that the market is

Table: Ghana Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008 2009e 2010f 2011f 2012f 2013f

No. of Mobile Phone Subscribers (000) 4,874 7,661 11,777 15,095 18,135 21,174 24,022 26,722

No. of Mobile Phone Subscribers/100 Inhabitants 21.2 32.4 49.2 61.8 72.8 83.3 92.7 101.1

No of Mobile Phone Subscribers/100 Fixed-Line Subscribers 1,369.1 2,017.0 2,568.6 2,880.1 3,063.1 3,208.2 3,285.5 3,410.8e/f = BMi eme/fe. sue: iel telemmu U (itU), BMi

made up of over 99% of prepaid subscriptions. These

numbers are inevitably a slightly inated version of

reality,sinceevenifmobileoperatorsclaimtheyare

excluding inactive subscribers, the denition of inactive

canvarywidely,andmanywillinevitablyfallthrough

the cracks and get counted when they are not really

activesubscribers.

Ghanahasahigherpenetrationratethanmanyother

African markets, certainly than most in the West African

region,andweexpectittoreach100%penetrationearlier

thanmost.ThisslightlymoreadvancedstatemeansthatGhana is likely to be faster to adopt value-added services

than some other markets, especially now that 3G has

been launched by two of its ve active operators. For

example, Tanzania was one of the rst African markets

tointroduce3Gacoupleofyearsago,buttheservices

are yet to nd a large user base. In Ghana, we expect

things to get moving much quicker.

Kea

Growth in Kenyas mobile market in 2008 was par-ticularly strong. When nal results from Q408 became

available, the market showed even stronger growth than

we had anticipated, and thus the end of year gures

veryslightlyexceededourexpectations.Theaddition

of 140,000 subscribers to the 2008 gures has led to a

slightupwardrevisionoftherestoftheforecastsgoing

forward. However, the changes are marginal.

Withmobilepenetrationattheendof2008at44%,

Kenyas mobile market still has a lot of growing to do,althoughthepacewillinevitablystarttoslowdown

afteracouplemoreyears.Theincreasedcompetition

in the market during the latter part of 2008 evidently

Gaa Idt Ted - Mbie sect2006-2013


0

5,000

10,000

15,000

20,000

25,000

30,000

2006

2007

2008

2009e

2010f

2011f

2012f

2013f

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120No. of Mobile Phone Subscribers('000)No. of Mobile Phone Subscribers/100Inhabitants (RHS)

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gave the market a growth boost, and we expect this to

continue into 2009, in spite of the economic slowdown.

The negative effect of this is more likely to be felt in

decliningARPUs,althoughthesewillalsocomeasa

result of the fact that further growth in the mobile market

willcomefromthepoorersectorsofsociety.Thisbeing

said,withARPUsalreadyexceptionallylowataround

US$6,operatorswillbedoingeverythingtheycanto

nd ways of shoring them up.

At the end of 2009, we expect there to be 23.49mn

mobile subscriber in Kenya, taking the penetration rate

just above 59%. We expect the penetration rate to break

through100%during2013,reaching102%,with45.8mn

mobilesubscribers,bytheendoftheyear.

Table: KenYa Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008 2009e 2010f 2011f 2012f 2013f

Cellular Mobile Phone Subscribers (000) 7,273 10,305 16,869 23,490 29,711 35,946 41,286 45,809

Mobile Phone Subscribers/100 Inhabitants 20.1 27.6 43.9 59.2 72.7 85.2 94.8 102.2

Mobile Phone Subscribers/100 xed-lines in Service 2,478.9 3,891.6 3,182.9 4,157.5 5,113.7 5,961.2 6,779.2 7,460.7

e/f = BMi eme/fe. sue: BMi

Kea Idt Ted - Mbie sect2006-2013


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2006

2007

2008e

2009f

2010f

2011f

2012f

2013f

0

20

40

60

80

100

120Cellular Mobile Phone Subscribers('000)

Mobile Phone Subscribers/100Inhabitants (RHS)

AlthoughBMIisnotyetforecastingfor3GinKenya,

wehopeto add this soon.According toSafaricom,

which has been heavily marketing its 3G USB dongles

onprepaidcontracts,therewereover1mn3Gsubscrib-

ers by the end of September 2008. Further data will be

availablefromSafaricominthecomingmonthsthat

should enable us to make forecast as to how this aspect

of the market is going to grow in the next ve years.

nigeiaWehavemadeonlytinyincrementalchangestoour

mobile forecasts for Nigeria this quarter, and these

reect little changes in some of our other forecasts,

suchasthoseforeconomicandpopulationgrowth.The

changes are quite insignicant in any case.

From a base of 62.982mn mobile subscriber at the

end of 2008, we anticipate 35% growth during 2009,

so that the subscriber base reaches 85.193mn by the

endoftheyear,givingapenetrationrateof53%.We

expectstronggrowthtocontinue,althoughobviously

getting weaker gradually as penetration increases. We

expectthepenetrationratetoexceed100%duringthe

secondhalfof2013,sothatbytheendoftheyear

itwillhavereached104%,with181.254mnmobilesubscribers.

Thiswillnotnecessarilymeanthatbythisstagemo-

bileownershipwillbeuniversal.Giventheveryhigh

proportion of prepaid subscribers in the market, we

Table: niGeria Telecoms secTor mobile hisTorical DaTa & ForecasTs, 2006-2013

2006 2007 2008 2009e 2010f 2011f 2012f 2013f

No. of mobile phone subscribers (000) 28,880 40,396 62,982 85,193 109,954 135,387 158,678 181,254

No. of mobile phone subscribers/100 inhabitants 19.3 26.3 40.0 53.0 67.0 80.8 92.9 104.0

No of mobile phone subscribers/100 xed-line subscribers 2,065.8 2,556.9 4,818.8 5,883.7 6,517.4 6,381.7 6,021.2 5,634.4

No. of 3G phone subscribers (000) 0 400 950 1,500 2,300 3,450 4,485 5,685

3G market as % of entire mobile market 0.0 1.0 1.5 1.8 2.1 2.5 2.8 3.1e/f = BMi eme/fe. sue: iel telemmu U (itU), BMi

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already believe that there are a signicant number of

inactivesubscriberswithinindustrystatistics.Multiple

SIMownershipisalsosomethingthatmaywellalready

be quite high, and will probably get higher. Prepaid us-

ers often buy more than one SIM so that they can take

advantage of all the different networks promotional

ratesandon-netcallingrates.

There is little concrete informationasyet available

about 3G subscriptions. Following the launch of the rstservicesinlate2007,bothoperatorsandtheregulator

have remained frustratingly quiet on the progress of this

service. We do not expect 3G to grow very quickly in

Nigeria,unlessoneormoreoperatorsstartsputtingan

emphasisonitasacompaniontolowcostlaptops,as

ameansforgettingonline.Weestimatethattherewere

950,000 3G subscribers in Nigeria at the end of 2008.

We expect this to rise to 1.5mn by the end of 2009, and

to 5.69mn by the end of 2013, by which point it will

accountfor3.1%ofallmobilesubscriptions,stillnota very signicant amount, but higher than many other

nigeia Idt Ted - Mbie sect2006-2013


0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2006

2007

2008

2009e

2010f

2011f

2012f

2013f

0

20

40

60

80

100

120No of Mobile Phone Subscribers ('000)LHSNo of 3G Phone Subscribers ('000) LHS

No of Mobile Phone Subscribers/100Inhabitants RHS

Table: souTh aFrica Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008e 2009f 2010f 2011f 2012f 2013f



No of Mobile Phone Subscribers/100 Fixed-Line Subscribers 809.3 962.2 1,105.5 1,187.2 1,258.3 1,320.3 1,367.8 1,406.3

No. of 3G Phone Subscribers (000) 350 490 800 1,283 1,967 2,945 4,354 6,004

3G Market As % Of Entire Mobile Market 0.9 1.1 1.6 2.3 3.3 4.7 6.7 9.1e/f = eme/fe. sue: iel telemmu U (itU), BMi

African markets.

st AicaAttheendof2008,SouthAfricastwolargestmobile

operators,VodacomandMTN,hadacombinedmobile

customerbaseof43.486mn.Atthetimeofwriting,the

countrys smallest mobile network operator,Cell C,had

yet to report end of year gures. Meanwhile, no recent

gures have been published on the number of customers

servedbyMVNOVirgin Mobile South Africa.

Basedonthedatathatisavailable,BMIestimatesthat

there just over 49.9mn mobile telephony customers in

SouthAfricaattheendof2008.Thismeantthatthe

market grew by 13.3% in 2008, giving the country a

mobilepenetrationrateof103%attheendoftheyear.

The actual growth rate for 2008 was quite a bit lower

thanthe17.5%growthratewepreviouslyenvisaged.

Thishasmeantthatwehavedownwardlyrevisedour

growth expectations for 2009 and beyond. We nowpredict growth of 9.7% in 2009, falling to 7.6% in 2010.

st Aica Idt Ted - Mbie sect2006-2013


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2006

2007

2008e

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2011f

2012f

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0

20

40

60

80

100

120

140

No. of Mobile Phone Subscribers ('000)

No. of 3G Phone Subscribers ('000)

No. of Mobile Phone Subscribers/100 Inhabitants (RHS)

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Withpenetrationnowover100%,weexpecttherateof

newsubscribergrowth to fallexponentially over the

next ve years. However, the slowdown in growth will

occurgradually,asweseenoreasonwhythepenetration

ratewillnotgrowtowellabove100%.SouthAfricas

mobile market has a high proportion of prepaid users,

aphenomenon that lendsitself toa largenumberof

multipleSIMownersandinactiveusers.IftheSouth

African operators embarked on a strategy of signing

upevenlargernumbersofprepaidcustomersand

assumingthat theydo notbegin todiscountinactive

customersfrom their reportedtotals it ispossible

thatgrowthlevelsoverthenextcouldbeevenhigher

thanwehavepredictedhere.Basedoncurrenttrends,

however,weforecastpenetrationrisingtoalmost130%attheendof2013.

Meanwhile,ourforecastforthenumberofSouthAfrican

3Gsubscribersattheendof2008remainsunchanged.

Thecurrentforecastisbasedonexpectationsofrelatively

buoyant growth over the next ve years. Although Vo-

dacomandMTNarecurrentlytheonlySouthAfrican

operatorsthatoffer3Gservices,ourforecastfactorsinthe

impact on the market that would result from the launch

ofservicesbyCellCandTelkom.InOctober2008,Telkom conrmed plans to offer W-CDMA services to

small and medium-sized enterprise (SME) customers.

Although the network will initially provide voice and

data services as a xed-line alternative, a mobile option

willbeintroducedatsomepointinthefuture.Thiswill

allow Telkom to offer 3G mobile services in competi-

tionwiththeestablishedcellularoperators.Weestimate

thattherewerearound800,000activeusersattheend

of 2008; this is equivalent to 1.6% of the total mobile

customer base and reects an increase of over 63% onthe 490,000 customers at the end of 2007. Based on

ournewexpectationsofalowerpenetrationrateforthe

mobile market as a whole at the end of 2013, we now

predict that the active 3G user base will be equivalent

to over 9% of mobile users.

sdaThanks to the strong recovery seen in the nal quarter

oftheyear,Sudanstotalnumberofmobilesubscribers

attheendof2008exceededtheforecastthatwehad

downgradedfollowingtheverypoorperformanceof

Q308.Attheendof2008,therewere11.745mnmo -

bilesubscriberinSudan,comparedtoourestimation

of10.621mn,andthepenetrationratewas30.4%,as

opposedtothe27.5%wehadestimated.BMIishappy

tohavebeen proved overly gloomy and isheartily

encouraged that Sudans mobile market has recovered

sowellfromitsfalsestep.Wehaveeagerlyupdatedourforecasts,whichareobviouslymuchhigherthan

inthepreviousupdate,withthestronggrowthratesof

past quarters recovered.

At the end of 2009, we expect that there will be 15.815mnmobilesubscribers,givingapenetrationrateof40.1%.

By the end of our ve-year forecast period in 2013,

we see the number ofmobile subscribers reaching

Table: suDan Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008e 2009f 2010f 2011f 2012f 2013f



No. of Mobile Phone Subscribers/100 Fixed-Line Subscribers 4.98 23.38 11.5 14.2 16.8 20.0 24.1 27.4e/f = BMi eme/fe. sue: iel telemmu U (itU); BMi

sda Idt Ted - Mbie sect2006-2013


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10,000

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27.378mn,andapenetrationrateof64.3%.Because

of the number of disconnections that did take place in

2008, the growth rate we expect in 2009 is still higher

than that observed in 2008. However, after that, we see

thetypicalpatternofgraduallydeclininggrowthrates

taking place, as the market matures.

Asgrowthdoesbegintoslowdown,wewillexpecttosee

theoperatorsbegintoconcentratemoreontryingtoencour-

age greater take-up of postpaid and value-added services,

althoughatthisstagetheseaspectsarestilllessimportant

thansimplesubscribernumberstotheoperators.

Tazaia

We had estimated 13.372mn mobile subscriber inTanzania at the end of 2008. Now that end of year re-

sultsareinforthoseoperatorswhoproducethem,we

haveaclearerideathattherewere13.324mnmobile

subscribersatthatpoint,whichfallsalittleshortofour

expectation,butthedifferenceisonlyamatterofless

than1%variation.

With 13.324mn subscribers, themobile penetration

rate in Tanzania at the end of 2008 was 32.1%. In spite

Table: Tanzania Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008 2009e 2010f 2011f 2012f 2013f



No of Mobile Phone Subscribers/100 Fixed Line Subscribers 3,535.0 3,513.5 8,075.2 11,896.7 16,737.9 21,760.3 26,181.9 30,824.5e/f = BMi eme/fe. sue: iel telemmu U (itU), BMi

offalteringeconomicgrowth,weexpectthemobile

subscriber base to continue to expand during 2009,

althoughthisexpansionmighthavebeenpredictedon

aslightlygranderscalewereeconomicconditionsmore

favourablethantheyare.Nonetheless,wesee5.83mn

new subscribers coming to the market during the year,

taking the YE09 mobile subscriber base for the country

to 19.154mn, and the penetration rate to 45.0%.

We still do not expect the penetration rate to push

over 100%during our forecastperiod, althoughwe

see itcomingfairly close. In2013,BMIexpectsto

see a penetration rate of 97.8% with 45.928mn mobile

subscribers.

Eventhoughthispenetrationrateiscloseto100%,it

doesnotmeanthatnearlyeveryoneinthecountrywill

haveamobilephone.In2013,povertyrateswillstillbe

far too high for anything like every person in Tanzania

to have access to a mobile phone. The market is now,

andwillbethen,veryheavilydependentonprepaid

subscriptions.Thisinevitablymeansalargenumberof

inactive SIMs will inate subscriber gures.

ugadaNowthatresultsareinfortheendof2008,BMIhasre-vised its end of year gures. We had previously estimated

a total of 9.467mn mobile subscribers for the end of the

year,andthishasbeenreplacedwithamoreinformed

estimate of 9.451mn. This is a slight downgrade, but the

differenceisonly0.2%,whichisnegligible.Thishas

inturnseenaveryslightdowngradingofourforecasts,

butoverallweseeverylittlechange.

BMI now sees the end of 2009 total as 14.426mn mobilesubscribers,givingapenetrationrateof43.8%,more

than double what it was at the end of 2007. However, this

doesnotmeanthatfouroutofevery10Ugandanswill

ownamobilephone.NotonlydoesUgandaundoubtedly

Tazaia Idt Ted - Mbie sect2006-2013

e/ = BMI estimate/orecast. Source: International Telecommunication Union (ITU), BMI

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2006

2007

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2

009e

2010f

2011f

2012f

2013f

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No. of Mobile Phone Subscribers/100Inhabitants (RHS)

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sufferfromasurfeitofinactivesubscribers,asistypical

of any prepaid dominated market, but also patterns of

useasrecordedbytheregulator,theUCC,suggestthat

multipleSIMownershipisbecomingcommonamong

mobile users, as they try to take best advantage of low

callingratesofferedbythevariousoperators.

Evenwiththistrend,however,wedonotseetherecorded

penetration rate breaking over 100% within our forecast

period. In 2013 we expect there will be 91.5 registeredSIMcardsforevery100inhabitants,withatotalsub-

scriberbaseof34.364mn.Wearenotexpectinggrowth

to slow dramatically within the next ve years, and we

expecttoseeanaverageofnearly5mnnewsubscribers

addedeveryyearupto2013.Growthwillinevitably

slow in the end, as the market becomes more mature

andpenetrationrises.

Wet ad Ceta Aica

Endofyearresultsfor2008haveproducedsomesur-prisesinWestandCentralAfrica,andthesehaveledus

torevisesomeofourforecasts.Onthewhole,mobile

subscribernumbersattheend of2008were slightly

Table: uGanDa Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008 2009e 2010f 2011f 2012f 2013f



No of Mobile Phone Subscribers/100 Fixed-Lines Subscribers 21.3 32.8 56.3 82.4 101.0 118.6 138.6 157.6e/f = BMi eme/fe. sue: iel telemmu U (itU); BMi

ugada Idt Ted - Mbie sect2006-2013


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2006

2007

2008

2009e

2010f

2011f

2012f

2013f

0

10

20

30

40

50

60

70

80

90

100

No. of Mobile Phone Subscribers('000), (LHS)

No. of Mobile PhoneSubscribers/100 Inhabitants

higher thanwe anticipated. Despite the better than

expectedresults,wehaveslightlyreviseddownsome

ofourforecastsgoingforwardalthoughonlyby

moderate amounts due to the outlook for the regional

andglobaleconomies.

InCameroon,thetotalfortheendof2008wasslightly

higherthanourestimate.Weundershotbyjustunder

3%,sothedifferenceisrelativelyminor.Atotalof

5.7mn mobile subscribers at the end of 2008 makesthemobilepenetrationrateinCameroon33.4%.By

the end of 2009 we expect to see a penetration rate of

38.9% and 6.7mn mobile subscribers in the country. We

expect strong and steady growth in the mobile market

tocontinuethroughoutourforecastperiod,withthe

mobile subscriber basereachingnearly12.8mnand

the penetrationrate68.7%by 2013.Cameroon has

two mobile networks and an MVNO active, and BMI

believes the market would benet from an additional

mobile network operator. The sooner a licence auctiontakes place the better, since a new player would want

to participate in the high growth phase of the market,

andiftheauctionislefttoolong,thegovernmentmight

Wet ad Ceta Aica Idt TedMbie sect

Mobile Subscribers/100 Inhabitants, 2006-2013


0

20

40

60

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2006

2007

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Cameroon Cte d'Ivoire DRCGabon Mali MauritaniaSenegal

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Table: WesT anD cenTral aFrica Telecoms secTor mobile hisTorical DaTa & ForecasTs

2006 2007 2008e 2009f 2010f 2011f 2012f 2013f

Cameroon



Cte dIvoire



DRC



Gabon

No. of Mobile Phone Subscribers (000) 812 1,187 1,411 1,594 1,713 1,802 1,857 1,907


Mali



Mauritania



Senegal


No. of Mobile Phone Subscribers/100 Inhabitants 25.0 29.7 43.0 52.3 59.0 63.7 66.5 67.7e/f = BMi eme/fe. sue: iel telemmu U (itU), BMi

expectlessfromthesale.Anewoperatormightlead

BMItoupgradetheseforecasts.

In Cte dIvoire we likewise underestimated the end of

yeartotalforthemobilesubscriberbase,whichreached

almost 9.6mn, 4.6% above our estimate. Cte dIvoire is

one of the most advanced markets in West and Central

Africa, with the penetration rate just breaking through

50%bytheendof2008.Itisstillgrowingveryfast,and

weexpectthepenetrationratetopushabove65%dur-

ing 2009, and by 2013 the end of our forecast period

we see it at nearly 94%. This will be equivalent to

19.4mn mobile subscribers. Competition is healthy in

CtedIvoire,andthishashelpedboostthepenetration

rate above those of neighbouring markets.

TheDemocraticRepublicoftheCongo(DRC)isthe

only one of our West and Central African markets that

failedtomeetourexpectations.Quantifyingtheprecise

number of mobile subscribers in the DRC is tricky

atthebestoftimes,butwiththeinformationthatwe

have available we have worked out the total subscriber

number at the end of 2008 as 10.593mn, which is 4.7%

lowerthanwehadpreviouslyestimated.Webelievethat

mobilepenetrationinthistroubledcountrywas17.7%.

However, it is this low penetration in a market that dwarfs

most others in the region that makes investors so willing

to take on the formidable challenge that is the DRC.

AlthoughtheDRCsinstabilityandeconomictroubles

arebynomeansover,wedoexpectmobilegrowthto

bestrongin thecomingyears,with thetotalnumber

of mobile subscribers reaching 35.9mn by 2013. Even

thentherewillstillbeplentyofroomforgrowth,with

penetrationatjust45.6%.

AlthoughGabonalsowentslightlybeyondourestimatefortheendof2008,thisisoneofthecountriesforwhich

wehaveslightlydowngradedourgrowthforecastsforthe

coming ve years. We had expected there to be 2.09mn

mobilesubscribersattheendof2013,butwehavenow

dropped this to 1.91mn, simply due to slightly lower

expectationsofgrowthintheeconomy.Evenso,itis

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not a huge change. In the unusually advanced market,

we expect penetration to reach 100% during 2009.

Both Mali and Mauritania saw signicant increases in

their nal 2008 gures when the actual results from

operators became available. BMI underestimated

themobilesubscriber basesofthesetwocountries

quite signicantly, and their penetration rates at the

endoftheyearare4.0ppsand6.0ppshigherthan

wehadanticipated,respectively.InMauritaniathis

isparticularlysurprising,asithasapenetrationrate

ofover60%,andweexpectedmobilegrowthtobe

slowingmoresubstantiallythanitis.InMauritania

weforecastthatthemobilesubscriberbasewillreach

2.867mnbytheendof2013,withapenetrationrateof84%.Maliended2008on3.3mnmobilesubscrib-

ers,andweexpectthistoriseto4.225mnbytheend

of 2009. At the end of 2013, we foresee the penetra -

tion rate remaining below 45%, as Malis mobile

market is much less developed than its neighbours.

However, both Mali and Mauritania will struggle to

reach100%.Theyarebothverylargeandsparsely

populated countries, and operators may struggle to

reachthemoreremotepopulations.

Senegalended2008with5.387mnmobilesubscribersand

Table: souThern aFrica Telecoms secTor mobile - hisTorical DaTa & ForecasTs

2006 2007 2008e 2009f 2010f 2011f 2012f 2013f

Angola

Mobile Phone Subscribers (000) 3,157 4,936 6,505 7,963 9,242 10,429 11,502 12,396


% chg y-o-y 96.0 56.4 31.8 22.4 16.1 12.8 10.3 7.8

Botswana



% chg y-o-y 25.9 37.7 21.1 13.6 7.9 6.1 4.4 3.7

Mauritius

Mobile Phone Subscribers (000) 759 876 1,020 1,147 1,244 1,337 1,420 1,488


% chg y-o-y 15.5 15.4 16.4 12.4 8.5 7.4 6.2 4.8

Mozambique



% chg y-o-y 55.5 48.6 34.5 13.8 23.3 18.6 14.4 11.1e/f = eme/fe. sue: itU, BMi

a43%penetrationrate.Thisisalsohigherthanwehad

anticipated,andhashadsomeimpactonourforecasts.

In 2013, we expect to see 9.546mn mobile subscrib-

ers, taking the penetration rate to 67.7%. Senegal, like

Cameroon, would benet from additional competition,

and if this eventuates, then we might see t to forecast

evenfastergrowth.

ste AicaOverall, we have not made any signicant changes to our

mobileforecastsfortheregion,comparedwithourlast

quarterly update. Slightly stronger than expected growth

in Angola and Mozambique has seen our totals for the

end of 2008 increase a little, and this has had a knock-on

effectontherestoftheforecastsupto2013.InBotswanaandMauritius,growthseemstohavebeenbasicallyinline

withexpectations,andevenalittledisappointing,butour

forecastshaveseenvirtuallynonoticeablechange.

Angola

ThenumberofmobilesubscribersinAngolaattheend

of2008isnowestimatedat6.505mn,whichisslightly

higherthanthepreviouslyforecast6.244mn,although

the difference is only 4%. However, it is enough to

slightlyraisetheforecastsfortheensuingyears.Overthe next ve years, we expect Angolas mobile market

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sPECIAl rEPorT

toexpandbyanaverageof11.4%eachyear.Bytheend

of2013,weforecastAngolawillhave12.4mnmobile

subscribersandapenetrationrateof61%,upfrom37%

attheendof2008.

Botswana

Botswanaalreadyhasamuchhigherpenetrationratethan

we anticipate Angola reaching in ve years time. With

around1.7mnmobile subscribersat theendof2008,

Botswanahasbasicallymetourexpectations,although

notallthedataforBotswanahaveyetbeenmadeavail-able,soitispossiblethatwemaybepleasantlysurprised

andupgradeourforecasts.Atthemoment,wecontinue

toexpectthatpenetrationwillrisefromthe2008levelof

90%, breaking through the 100% threshold during 2009,

toreach118%bytheendof2013.Overthisperiod,the

subscriberbasewillgrowbyanaverageof7.2%eachyear,

reaching2.4mnmobilesubscribersattheendof2013.

Mauritius

Mauritius, like Botswana, already has a much higher

mobilepenetrationratethanweexpectevenAngolaor

Mozambique to reach by the end of our forecast period.

Figures from Mauritius mobile operators show that

the mobile market slightly underperformed in terms of

subscribergrowthwhencomparedwithourforecasts.

Wehadbeenexpecting there tobe1.033mnmobile

subscribersattheendof2008,butresultsshowthat

theactualtotalwasonly1.020mn,ashortfallof13,000,

whichisnotsubstantial,butdoesaccountforalittleover

1%ofthetotal.Itrepresentsy-o-ygrowthof16.4%,

whichisanimprovementon15.4%during2008,but

weexpectittotailofffromhere.

Mauritiusmobilepenetrationratesat at80%at the

endof2008,butwedonotseeitcrossing100%untilwell into 2011. Growth in Mauritius mobile market has

stagnated somewhat prematurely, and it would take a

signicant shake up, such as a new operator, to really

make a difference. BMIexpectsthesubscriberbase

tohave risento1.488mnby theendofourforecast

periodin2013.

Mozambique

Mozambique, like Angola, is still showing very strong

growth,andappearstohaveslightlyoutstrippedourexpectationsbyreachinganestimated4.675mnmo-

bilesubscribersattheendof2008,comparedwiththe

4.317mnwe hadpreviously forecast. Penetration is

now at 20.6%, and by the end of 2009 we expect there

tobe5.322mnmobile subscribersandapenetration

rateof25%.Stronggrowthwillcontinueoverthenext

ve years, bolstered, most likely during 2010, by the

arrivalofathirdoperator.By2013,weexpectthereto

be 9.891mn mobile subscribers in Mozambique, with

apenetrationrateof42%.

ste Aica Idt Ted Mbie sectNo. of Mobile Subscribers (000) 2006-2013

e/ = BMI estimate/orecast. Source: BMI

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2006

2007

2008e

2009f

2010f

2011f

2012f

2013f

Angola Botswana

M au ri ti us M oz am bi qu e

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