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.
