East Africa is one of the most dynamic markets in Africa. Most countries in the region are experiencing high GDP growth and favourable market and regulatory conditions. Tanzania is one of the most attractive with 7% GDP growth, stable political conditions, dynamic operators and a low mobile penetration level.
Mobile subscriptions grew by 67% in Eastern Africa over the twelve months to September 2007. The sub-region recorded the highest growth in Africa over that period. In comparison, the continent's growth rate was 44%. Informa Telecoms & Media forecasts 54 million subscriptions by 2012 in Eastern Africa, a 73% growth since end of 2007.
Voice remains the major telecommunications service used in Eastern Africa but the data segment is also in expansion, fuelled by converged licensing frameworks and the deployment of technologies other than GSM. Mainly used by incumbent fixed line companies such as Telkom Kenya, Sudani or TTCL (Tanzania), CDMA networks cover most markets. WCDMA/HSDPA was pioneered by Vodacom in Tanzania and then launched in November 2007 in Uganda by Uganda Telecom. As at end of 2007, WiMAX was available in Kenya, Tanzania, Uganda and Rwanda.
As in the mobile voice industry, the ISP market is undergoing consolidations. In 2007, South African groups Telkom and Mweb (Naspers) acquired respectively Africa Online and Afsat. Africa Online is present in 8 markets, including 3 East African countries, while Afsat has subsidiaries in Kenya, Uganda, Tanzania and Nigeria.
East Africa is dominated by 3 of the continent's most dynamic markets (Kenya, Tanzania and Uganda), and by the presence of Africa's 2 largest telecom groups: Celtel International (part of Zain, the new brand for MTC), and MTN. Overall there are fixed and mobile 37 operators (including new ones in Uganda and Kenya) in the region, plus over 20 internet service providers (ISPs).
These upbeat conditions were reflected at the recent East Africa Com conference in Dar es Salaam. Over 450 telecommunications executives participated and the event brought together the leaders of the region's stakeholders to discuss commercial and technology strategies to maximise growth and improve services for users.
Speakers included Bashar Arafeh, Celtel International/Zain's COO for East Africa , and Dietlof Mare, CEO of Vodacom Tanzania, who outlined the success factors for Vodacom's 3G/HSPA and WiMAX networks and the M-Pesa payment service, which should be launched in Tanzania at the end of the month. Both speakers mentioned competition and the resulting price decline as a major challenge in the markets. Warid Telecom CEO Zul Javaid outlined the entry strategy his company employed in Uganda: good brand positioning, good coverage and good quality of networks, as well as a high quality workforce.
Technology issues which attracted delegates' focus included the development of advanced services including GSM evolution, CDMA and the opportunities created by combining technologies such as WiMAX, VSAT and WLAN. The challenges of cost-effectively deploying networks to improve coverage and the principles of outsourcing for network optimisation also drew big audiences.
On the services side, key issues included new services to address specific segments and increase ARPU. Dylan Lennox, Managing Executive - New Technologies at Vodacom Tanzania described new services such as internet access and data bundles. Other speakers looked at the potential for services targeted at specific customer segments, such at the low-end customers, and those with disabilities.
East Africa Com will take place again in 2009 on 1st and 2nd April.
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