Affordable Handsets and Mobile Broadband Tariffs Create Dynamic Market in West African Region
Published on: 14th Jun 2011
Note -- this news article is more than a year old.
West and Central Africa represents one of the fastest growing mobile communications market in sub Saharan Africa. Over the past few years the region has witnessed a dramatic increase in mobile subscriptions due mainly to the surge in mobile subscriptions in Nigeria. The low levels of mobile broadband penetration in the region indicate that there is room for growth.
New analysis from Frost & Sullivan finds that the mobile communications markets in Nigeria, Cameroon and the Ivory Coast earned combined revenues of $8.6 billion in 2009 and estimates this to reach $12.6 billion in 2016. From approximately 92.6 million in 2009, mobile subscribers are expected to grow to 172.4 million in 2015.
"The West and Central African region is one of the most dynamic with more than 3 mobile operators in each country and massive infrastructure development," notes Frost & Sullivan's ICT Industry Analyst Mervin Miemoukanda. "The intense competition amongst mobile operators has boosted market development in terms of offerings and technology deployed."
Unlike in other regions, most operators in Central and West Africa have rolled out fibre optic backbone, thereby bypassing the incumbent fixed line operators' expensive transmission networks.
Although the mobile broadband penetration rate is less than 1 per cent in the three countries, they have experienced a considerable uptake of broadband services due to the increasing adoption of social media and decrease in tariffs. In Nigeria, mobile broadband has surpassed fixed broadband subscriptions over the past 2 years and this trend is expected to be witnessed in Cameroon and the Ivory Coast in the next 3 years.
However, challenges remain. High taxes on telecom services and compulsory subscriber registration threaten to dampen market expansion. The high cost and limited availability of bandwidth also threaten to rein in market prospects.
"A number of factors currently hamper the growth of this region," explains Miemoukanda. "These include low disposable income, lack of infrastructure in rural areas and the shortage of bandwidth in most countries in the region, especially in Cameroon and the Ivory Coast."
To sustain profit margins, mobile operators should improve the quality of services through continuous infrastructure investment such as network capacity upgrade and deployments of new technologies.
"They should also focus on developing innovative solutions, such as cyber cafés for broadband services that target the mass market," concludes Miemoukanda. "Focusing on enterprise solutions and developing sound distribution channels for mobile money services will also help maintain growth momentum."