African cell subs hit 200m

Africa has exceeded 200 million mobile connections in the first quarter of 2007, growing by more than 60 million connections compared to 2006. This is according to a report released by global mobile market information database Wireless Intelligence.

North Africa held 35% of the mobile connections in 2006 on the continent, West Africa held 30%, Southern Africa held 20%, East Africa held 12% and Central Africa held 7%.

Mobile connections on the continent are predicted to reach 35 million connections by the fourth quarter of 2009.

This makes Africa the fastest-growing mobile telecoms market in the world, ahead of the Middle East (30%) and Asia-Pacific (28%).

The continent`s overall mobile penetration now stands at 21%, according to the report. From here on, market growth is expected to increase just below 30% year-on-year, according to senior analyst at Wireless Intelligence and author of the report, Joss Gillett.

The numbers of mobile connections in the sub-Saharan African regions do not necessarily depict the actual mobile penetration, says Gillett.

West Africa overtook southern Africa in the rate of mobile connections, yet the latter regions still maintain a high 75% mobile penetration over the former`s 25%.

Gillett says that the reason for the slower growth in southern Africa is that it is becoming a more mature market compared with the rest of the African region. "In southern Africa, market growth is of course still happening, but not at the same rate as before, as market penetration is high. SA represents 94% of total connections in southern Africa."

Gillett does not predict market saturation anytime soon, as less than 10 countries have a market penetration above 50% in Africa. "With economies growing and market dynamics changing, potential for growth is massive."

The main reason for this growth is the rapid deployment of GSM networks and changes in market dynamics in terms of regulation and politics. Most governments in Africa are receptive towards telecommunications investment as a catalyst for economic growth, says Gillett.

Gillett notes that West Africa holds the biggest pull as an investor hotspot, because of growing economies and progressive regulatory, trade and government policies.

Nigeria, Mali, Senegal, Ghana, Gambia and Ivory Coast had positive growth in 2006 and are expected to continue with a 75% year-on-year mobile connection increase. Connections in the region are set to reach 70 million this year, says Gillett.

Competition is another factor spurring mobile growth in the region, notes Gillett. Competition in the East African region has seen operators provide better network capabilities and services, creating strong market growth.

Competition is increasing in eastern Africa, for example, between Celtel, MTN, Millicom and Vodacom. Vodacom and Millicom are rapidly growing their operations in Tanzania. MTN and Celtel are competing strongly in Uganda and Zambia.

East African countries like Uganda, Kenya, Tanzania, Mozambique and Zambia are expected to reach a total of 24 million connections by the end of 2007, through increased competition.

Gillett believes other reasons for this growth lie in the fact that many of these countries still have an untapped, addressable market. Most markets are extremely price-sensitive and operators can hit mass market, he adds.

Central Africa, which represents only 7% of total connections on the continent, is expected to grow by 32% this year. With a lower penetration rate there are opportunities for growth in central Africa.