East Africa’s Mobile Market Poised for Double Digit Growth Over the Next Five Years A recent report by Frost and
Sullivan shows double digit growth in the East African Mobile market over the
next 5 years. According to the 246 page report, East Africa ( Kenya,
Tanzania, Uganda, Rwanda) currently has 37.6 mobile subscribers with a
penetration rate of 30.8%. The East Africa mobile communications market
is expected to show strong growth based on increasing demand for mobile
communications in lieu of low quality fixed -line networks. The total
number of subscribers is expected to reach 99.5 million in 2015, representing a
compound annual growth rate of 14.9%. Additionally, the launching of
undersea cables is expected to reduce the cost of telecommunications by 60%
over the next 7 years, which in turn will drive the demand growth in mobile
internet access. Inexpensive Handsets and Increasing Network Investments to Drive the East African Mobile Communications Market The East African mobile communications market has yet to reach critical mass or maturity, and is likely to experience the highest market competition and development in Africa. In 2008, Kenya had the highest number of active subscribers and revenues among the four countries in the study. Tanzania, Uganda and Rwanda are likely to witness significant growth over the next 7 years by increasing network investments, continuing product innovation and reducing handset costs. According to a Frost & Sullivan analyst, “The key drivers of the East African mobile communications market include rising gross domestic product (GDP) growth rates, increasing demand for mobile money transfer services, and declining mobile handset costs. Despite the low disposable incomes of the East African consumers, the rising GDP growth rate indicates greater consumer spending on mobile communications due to the low fixed-line network coverage, underdeveloped banking system, and the current limited availability of inexpensive handsets.” Mobile Network Operators to Enhance their Services to Boost the Demand for Mobile Services There are challenges faced by market participants like high tax rate on mobile services curbing service uptake, lack of network rollout in rural areas constraining subscriber and revenue growth and low demand for data services. Additionally, data services uptake by corporate clients has dwindled due to the economic downturn. “The East African region imposed one of the highest taxes on mobile services in Africa, limiting the demand for mobile communications due to the majority of low-income population,” explains the analyst. “The lack of network coverage in rural areas, where most of the population resides, restricts the expansion of the subscriber base.” Mobile network operators are expected to enhance their services by continuously investing in infrastructure like call-switching capacity. This will help in developing innovative solutions like mobile money transfer services, and initiates managed services by outsourcing non-core businesses like network maintenance. These strategies will step-up the demand for mobile services, boosting subscriber and revenue growth. The double digit growth in East Africa’s mobile market will undoubtedly have a positive ripple effect in the growth of supporting sectors such as advertising, retail, software and content. While some sectors such as retail banks may be eyeing the industry with tempered anxiety over the overwhelming popularity of mobile banking and money transfer, there is no stopping the demand that is driving this sector in East Africa. The that are at risk as a result of this growth in the mobile sector include the retail banking sector that is keeping close tabs on the success of mobile money transfer services in the region. The Frost and Sullivan report is being distributed through Research and Markets. | Anti-corruption crusade haunts Raila By Jibril Adan Did Prime Minister Raila Odinga unwittingly box himself into a corner as he engaged overdrive to push Education Minister Sam Ongeri and his Permanent Secretary Karega Mutahi to step aside over lost free primary education funds? That was the question many were left asking as the maize scandal resurfaced to overshadow the PM’s push to have Prof Ongeri and Prof Karega step aside as investigations are carried out. The momentum of the PM’s push against Ongeri was diminished when a report on the maize scandal of last year in which more than Sh2 billion was lost and which also jeorpadised the country’s food security was leaked. Before the report by PriceWaterHouseCoopers (PwC) on maize scandal was leaked to the media on Tuesday, the PM had sustained an onslaught on Ongeri. The PM put the professor on the spot over the loss of Sh100 million free primary education funds and did not even spare him at public functions. Read More… |
East Africa |
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