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3G/HSPA

Africa Adds 65M Subs in 2007

It's not just the weather that's hot in Africa -- mobile services are outpacing growth expectations as operators sign up record numbers of subscribers.

According to a report by the International Telecommunication Union (ITU) , issued at this week's ITU Telecom Africa event, operators across the continent added more than 65 million new subscribers in 2007, which was up from 55.3 million additions in 2006. The total subscriber count in Africa crossed the 250 million mark last year and is now pushing 300 million.

Subscribers hadn't been forecast to reach the 300 million mark until 2010. (See Africa Racks Up Mobile Subs .)

Mobile is booming in many African countries as an alternative to the underdeveloped, and in some cases nonexistent, fixed-line infrastructure. With around one third of the 934 million population subscribing to a phone service and governments focusing on liberalizing their telecom markets for economic development, the potential for future growth continues to excite operators.

As an example, Zain Group , Ericsson AB (Nasdaq: ERIC), and the Earth Institute have a partnership to provide mobile networks and Internet connectivity in 10 countries across sub-Saharan Africa where the Millenium Villages project is working in communities with a total of 400,000 people. (See Ericsson, Earth Institute Team.)

Last week the trio announced they have expanded the coverage and reach of Zain's networks in Kenya, Tanzania, and Uganda, and will provide connectivity to health facilities and community workers. (See Zain Targets African Villages.) Kenya has a teledensity rate of 30 phones for every 100 people in the country, Tanzania has 21, while Uganda has just 11.

The project reflects the role mobile is playing in place of wired Internet by providing access to data services, as just 3 percent of the population in sub-Saharan Africa has Internet access.

Nigeria registered the most growth of the 53 African nations with 8.07 million new subscribers last year, taking its total mobile base to 40.4 million. It's gaining on South Africa, the continent's largest mobile market, which signed up 6.27 million new users for a total subscriber base of 43.84 million.

Nigeria ranked ninth on Light Reading's Top 10 Emerging Mobile Markets by subscriber additions in 2006, although it dropped off the list in 2007. (See Top 10 Emerging Mobile Markets 2007.)

The table below shows subscriber totals and growth rates for selected African countries where figures are readily available:

Table 1: Subscriber growth in selected African countries
Country Subscriber additions in 2007 (in millions) Total subscribers Dec 2007 (in millions) % increase over Dec 2006 Total subscribers Dec 2006 (in millions)
Nigeria 8.07 40.4 24.96 32.33
Algeria 7.2 28.2 34.3 21
South Africa 6.27 43.84 16.68 37.57
Senegal 4.12 4.12 38.22 2.98
Morocco 4.02 20.03 25.14 16
Kenya 3.2 11.4 39.02 8.2
Tanzania 2.64 8.25 47.12 5.61
Ghana 2.39 7.6 45.97 5.21
Uganda 2.1 4.6 84 2.5
Democratic Republic of Congo 1.87 6.09 44.44 4.22
Cameroon 1.4 4.54 44.64 3.14
Madagascar 1.17 2.16 118.12 0.99
Chad 0.38 0.92 71.79 0.53
Republic of Congo 0.37 1.33 38.11 0.96
Gabon 0.3 1.05 39.34 0.76
Swaziland 0.11 0.38 41.79 0.27
Source: National regulator statistics and company data




North Africa is racking up respectable growth figures: Algeria, for instance, added 7.2 million new subscribers, a 34.3 percent increase; Morocco signed up 4.02 million, a 25.1 percent increase.

Coming off smaller subscriber bases, some countries ran up big rates of percentage increase: Madagascar saw a 118 percent increase in customers to 2.16 million, while Chad experienced a 72 percent increase to 920,000 subscribers. Uganda's subscriber base grew by 84 percent to 4.6 million.

The likes of Portugal Telecom SGPS SA (NYSE: PT), Orange (NYSE: FTE), and Vodafone Group plc (NYSE: VOD) have staked a claim on African markets to get in on the ground floor of such growth. (See Operators Tap Into African Growth, Emerging Markets Drive FT's M&A Plans, FT Buys Again in Africa, and FT Adds to African Assets.)

France Telecom operates in 13 African countries; PT has seven mobile operations, along with three fixed-line providers and four ISPs; and Vodafone holds a 50 percent stake in South African market leader Vodacom Pty. Ltd.

South-Africa based MTN Group Ltd. , one of the world's biggest emerging markets mobile operators by revenues, operates in 16 African countries, and has become a hot M&A target for operators keen to expand in emerging markets -- with India's Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and United Arab Emirates-based Etisalat among those interested. (See MTN Becomes M&A Magnet and MTN M&A Update.)

For equipment vendors, the rapid growth of subscribers means an increase in network buildout and expansion contracts coming out of Africa. Alcatel-Lucent said today that it's signed a three-year agreement with Africa Cellulaire (Africell) Burundi to build a nationwide GSM/EDGE network worth $20 million in the first phase. (See Africell Picks AlcaLu.) Ericsson was awarded last week a $145 million contract with fixed-line incumbent Telkom Kenya (owned by France Telecom) to build it a GSM network to help compete with the country's two mobile operators and a third that's set to launch in July.

— Nicole Willing, Reporter, Light Reading

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