Falling voice revenues, high investment costs and uneven regulation are “roadblocks challenging Africa's mobile growth”.
That is according to a report entitled “Connecting Africa” unveiled by Lebanese researcher Booz & Company earlier this month.
Africa's mobile operators experienced “super growth” in the last decade as subscriptions reached 500 million, the report said. Booz & Company further said handsets as cheap as $10, wider network coverage and more operators have boosted mobile penetration from just 2% in 2002 to 51% in 2010.
But a more disciplined and effective regulatory and political approach among African governments might have made this growth even more impressive.
“Seasoned investors are taking an increasingly hard look at further investments in Africa because of extreme pricing pressure, an increasingly unattractive investment environment, and continued regulatory risk,” the researchers warned.
African mobile operators are making lower margins as they decrease voice call prices to try win over customers who change networks frequently. Appetite for investing in mobile infrastructure is also decreasing owing to high costs, according to the report.
Cape Town-based African telecoms expert, Dobek Pater from Africananalysis.co.za, agrees with this finding. "Both investments and operations in Africa are quite expensive compared to other markets."
Pater says poor road infrastructure makes it expensive to transport equipment to set up mobile towers, and a dependence on diesel generators to power towers in areas where there is insufficient electricity are factors driving up investment costs in Africa.
Lastly, the Booze & Company report says investors remain concerned about the structure of regulatory frameworks overall, as African countries focus more on monitoring operators' revenues to raise taxes rather than ensuring competitiveness and fair pricing.
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