The Future of Africa’s Telecom Market

Posted by StevenHWicker on June 29th, 2019

The African telecom sector is poised at a digital revolution. Since its liberalization in the 1980s, the involvement of multinational conglomerates has promoted a healthy competition which led to its flourishing.

Tanzania, Uganda, Sudan, Nigeria, Kenya, and South Africa are just a few examples of African countries which have recognized the opportunities of the privatization and liberalization of the state-owned ICT enterprises.

Most African states had long been resistant to liberalize their telecom markets but had to acknowledge that it was necessary to allow growth and expansion. Due to the deficiencies associated with the state-owned telecom enterprises, the African governments had to realize that only privatization would bring the much-needed financial discipline. African finance news

The first series of reforms were focused on making up for the financial losses caused by the public sector enterprises. Due to the lack of adequate funding and management, most of them had not been able to render their services properly.

Overall, the privatization has increased internet speed and connectivity, thus prompting new subscribers and increasing business results. The improvement in network infrastructures has also resulted in increased mobile phone users, more affordable data rates and an improved reach to urban as well as rural areas. A good example is the privatization of NITEL and M-Tel by the Nigerian government in April 2015 which resulted in a significant spike in sales numbers.

The Market

A significant portion of the African telecom market share is covered by a few key players such as Open Serve, Telkom, Neotel, Vodacom, MTN, Cell, Seacom, Broadband Infraco and Teraco. Some of these companies have also spread their reach into other African countries or have established joint partnerships with the government, for example, to launch public WiFi hotspots.

The telecom sector in Africa has opened up a plethora of business opportunities. Among all other continents, Africa has been the fastest growing mobile market during the past five years, with more than 170 million mobile users. Mobile telephony has had a significant impact on economic growth, which in many African countries is twice as high as in developed countries.

Considering that in 2004, only 6 percent of the African population owned a mobile phone, the growth in the telecom sector is not entirely surprising. The price-drop on mobile devices and the introduction of low-cost phones for developing economies have carved an industry with huge potential. Nigeria, for instance, has a mobile market that has been growing at a rate of 100 percent per year.

When compared with other continents, the growth of the telecom sector in Africa looks far more promising. While other continents have reached a saturation point in the growth of revenue and subscribers, Africa opens up fresh opportunities and positive market trends.

Furthermore, Africa is still opening its gates to development, and the economic growth brought about by the telecommunication sector has further contributed to making it a profitable investment opportunity. Business news articles

Apart from the privatization, the growth in the market has been primarily driven by the subsidization of handsets, affordable prepaid plans, and provision of 3G and 4G services. Future growth in the market is expected to be driven by factors like better network coverage, lower cost of handsets and call prices, and improved mobile data connectivity.