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Mobile

Africa Racks Up Mobile Subs

With the mobile business booming in emerging markets, the African continent is set for rapid growth this year, notes Informa plc .

In recent weeks, Virgin Mobile Telecoms Ltd. has launched a joint venture in South Africa with Cell C subsidiary Oger Telecom; Celtel International B.V. 's unit in Tanzania has bagged $70 million in financing for expansion; and MTN Group Ltd. has launched re-branded operations in Congo following its acquisition of Libertis Telecom in December.

According to Informa, the region saw a combined growth rate of 66 percent across its 54 countries last year and passed 150 million subscribers at the end of the first quarter this year.

With a population of around 900 million, Africa has only 15 mobile phones for every 100 people. That number is growing as market liberalization and active competition have encouraged carriers to expand their networks to meet pent-up demand.

Incorporating so many countries, Africa has a diverse range of markets at different stages of demographic and wireless development. Figure 1 shows Informa's forecast for wireless growth in Africa, broken down by geographic region.



Informa notes subscriber growth has mostly been driven by four key markets: Nigeria, South Africa, Algeria, and Egypt. It's these markets that will predominantly drive total subscriptions to 186 million by the end of this year, the analyst firm says.

Figure 2 shows the percentage growth Informa expects these countries to contribute to Africa's wireless expansion in 2006.



As the chart shows, Nigeria is set to be Africa's most lucrative market, contributing 24 percent of the continent's growth this year. The country has accumulated 21 million mobile subscribers in the five years since GSM services were launched there.

Several big names have expressed interest in getting into the Nigerian market: BT Group plc (NYSE: BT; London: BTA) and KT Corp. are among seven shortlisted bidders for state-owned carrier Nitel. (See Emerging Markets See More Mobile M&A.) According to local media reports, Nigeria’s minister of communications, Cornelius Adebayo, told a press briefing that Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) have made moves to acquire stakes in Intercellular Nigeria Ltd. and Cellcom Ltd.

On the other hand Lucent Technologies Inc. (NYSE: LU) has been linked to the Nitel shortlist but told Light Reading that it has no interest in bidding. (See Lucent 'Not Interested' in Nitel.)

— Nicole Willing, Reporter, Light Reading

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