West Africa mobile market growing but faces challenges
Mobile communications is vital in Africa where the fixed telecommunications infrastructure often leaves much to be desired. A new report from analysts Frost & Sullivan looks at the mobile communications market in West Africa, which is one of the most dynamic in the region. It found that the market earned revenues of $12 billion in 2008 and predicts that this will reach $22.6 billion by 2015. This is an annual growth rate of a rather modest 9.4% - perhaps reflecting the difficulty of making money beyond basic voice services.
Frost & Sullivan ICT Programme Manager Birgitta Cederstrom says that the lack of fixed line infrastructure has created a favourable environment for mobile operators to thrive. "Fixed-line penetration in West Africa is considerably low at an average of about 2.0 per cent across the region," Cederstrom says. "This is because fixed-line communications services are usually provided through a government-owned incumbent, where the services tend to be limited, of poor quality, and unreliable. Mobile communications services are an attractive alternative and offer a wider range of options and services."
Much of the growth potential in West Africa, however, is in rural areas, where there is significant poverty and low disposable incomes. This is driving the need for lost-cost communications services, which along with competition means that average revenue per user (ARPU) is declining. In fact, in Nigeria - the largest country in the region - the Government earlier this year announced plans for a cap on call and SMS charges for operators in the country. Nigeria currently has 73 million mobile subscribers, making it the largest mobile market on the whole continent.