African Mobile Market - Boom or Bust ?

The boom in African mobile telecommunications appears to be under threat due to an uncertain investment environment, owing largely due to overcrowding of companies and ruthless competition for clients.  

In a recent article published on www.totaltele.com, Mary Lennigham, Editor at Total Telecom says “Cooperation between governments and operators has driven significant growth in the African mobile industry over the past decade. However, there are no guarantees that this growth will continue”, the article goes on to highlight key points from a new report by Booz & Company, stating that “a number of issues must be addressed as the continent moves towards the next phase of mobile development”. 

The report states that investors are hesitating due to extreme pricing pressure, continued regulatory risk and escalating unattractive investment environment, thus jeopardising the next wave of telecoms investment and growth in Africa.  

Indeed, Dr Bitange Ndemo, Ministry of Informations and Communications Permanent Secretary backs up the claims in the report by Booz & Company saying that “there has been market erosion of up to 20%, mostly because of competition that has seen cuts in tariffs in the sector. A new entrant or investors would have a lot of problems as the major firms are struggling due to stiff competition”.  Certainly the four major firms, namely Bharti Airtel, Orange, Safaricom and MTN are competing aggressively for subscribers, with tariff cuts in both voice calls and data services being extremely significant, making it difficult for new entrants to enter the competition.

However it may not be all doom and gloom as the next wave of growth could be spurned by increased focus on innovation, roll out of new products and investment in expansion of data services and value added services. Indeed services like M-Pesa or other mobile financial solutions and mHealth, which according to the GSMA, will generate £1.2 billion by 2017, are expected to create significant growth in the African Market. Perhaps also as adoption of 4G networks and LTE expands in the coming years, increasing mobile penetration in Africa, there is scope for new entrants and investors to gain from the continent.

ForgetMeNot Africa, is one such company aiming is to bridge the digital divide for Africans by providing Internet messaging on every mobile phone.  Their innovative technology connects the huge gap between the Internet and mobile messaging worlds allowing any mobile phone to send and receive email and chat-message on any carrier’s network. Today ForgetMeNot Africa has bloomed into a carrier class Unified Messaging service provider, leading the way for innovators to profit from Africa’s tentative investment situation.

Jeremy George, COO at Forget Me Not Africa, will be part of the panel discussing "How mobile deployments are playing out in Developing Markets". To find out what the current challenges and opportunities for operators are within these regions and what predictions we can make regarding the future of these markets, join Total Telecom Wireless World, on the 12th-13th of June, 2012.