Official publication:
GSM>3G East & Central Africa e-Zine 18/04/07
International Investment Strengthening the East & Central African Telecom Market
There is no doubt about it – the African market is definitely on the up. According to forecasts by Informa Telecoms & Media’s WCIS, African subscriptions were expected to surpass 211m at the end of March, an increase of over 8% on the previous quarter. MTN, which published its yearly results at the beginning of this month, has also confirmed strong results for 2006, with EBITDA rising 53% on a 73% jump in subscribers, and EBITDA margins rising up 100 basis points to 43.4% leading to an after-tax profit increase of more than 70%.
For East & Central Africa, the consequences of this growth are considerable. Kenya, Tanzania and the Democratic Republic of the Congo are now among the 10 largest mobile markets in Africa, with DR Congo’s mobile market forecasted to grow by 200%, Tanzania’s by 109% and Kenya’s by 87% over the five years to December 2011 - all exceeding the forecast rate of 72% for the African continent as a whole over the same period. At the end of 2006, mobile subscriptions for the region had already exceeded 30 million, representing 16% of Africa’s total subscriptions, and this is forecasted to rise to 20% by the end of 2011, when more than 67 million users in this African sub-region are anticipated.
Consequently, East & Central Africa has become a real lure for international investors looking to expand and multiply their profits. MTN has credited its recent financial success in part to an extremely prosperous year in Uganda, where subscription figures for the telco rose a massive 63% from the previous year. Celtel, whose portfolio now spans 7 countries in East & Central Africa, is also enjoying considerable success in the region.
The benefit of this international investment is also far from one-way – in return for financial gain, both companies are fully committed to aiding East & Central African welfare through targeted community projects. MTN Rwanda, for example, is now engaged in a partnership with the World Health Organisation to utilise its mobile network as a distributed surveillance system for hospitals in Rwanda. Celtel’s flagship corporate responsibility programme, Build Our Nation, has also been established in support of the United Nations Millennium Development Goal, with the aim that by 2015, children everywhere will be able to complete a full course of primary schooling. In 2006 alone, Celtel has been responsible for spending more than US$1,000,000 across Africa donating books and other school supplies.
And so it seems that international investment is good news for East & Central Africa, with its ability at once to enhance social development and contribute positively to the region’s economic growth. As the telecoms market in the region continues to expand, other investors such as Orange, Millicom and Reliance are also beginning to latch on its potential.
With this in mind, international investment is a central theme at this year’s GSM>3G East & Central Africa 2007. The show, taking place in Nairobi, Kenya on 16-17 May, will feature exclusive interviews with key investors including Christian De Faria, Vice President of MTN Group, Mahmoud Hashish, Vice President of Celtel International, and Mark Rennard, Orange Group’s Executive Vice President & Head of International Operations for Africa, Middle East & Asia.
As the chief meeting place for the telecoms community in East & Central Africa, the event provides an unrivalled opportunity to hear from over 20 operator CxOs on issues such as rural connectivity, technological evolution, network optimisation and HSPA, with latest speakers confirmed including Antoine Pamboro, Managing Director of Celtel Congo, Godfrey Kisekka, CTO of Uganda Telecom, and Michael Joseph, CEO of Safaricom, Kenya.
Dates for your diary:
GSM>3G East Africa 2008 takes place at the Safari Park Hotel, Nairobi, Kenya on 21-22 May 2008.
