---
title: Low penetration rates to spur growth in Madagascar - Developing Telecoms
description: Economic difficulties in Madagascar have somewhat stalled development in its telecom sector, but the market’s growth potential is vast. 
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Economic difficulties in Madagascar have somewhat stalled development in its telecom sector, but the market’s growth potential is vast...

Economic difficulties in Madagascar have somewhat stalled development in its telecom sector, but the market’s growth potential is vast. New data from Research & Markets details development in the sector.

Madagascar's exposure to the global economic crisis was amplified by political instability following a controversial change of government in 2009. This has led to weak subscriber growth, reduced consumer spending and, as a consequence, intensified price competition between the three GSM mobile network operators - Orange, Bharti (formerly Zain) and Telma, the incumbent telco.

The country went into recession, but a return to growth is expected in 2011. Plans to exploit and export crude oil, gas and other natural resources may deliver a boost to the economy. A fourth mobile operator, Madamobil, launched a CDMA-based network in 2010.

Positive developments in the Internet and broadband sector have begun following the arrival of the first international submarine fibre optic cables, LION and EASSy, on the island in 2009 and 2010. This ended the country's dependency on satellites for international connections, bringing down the cost of international bandwidth and making Internet access more affordable to a wider part of the population.

A national fibre backbone is being implemented connecting the major cities. Wireless broadband access networks are being rolled out, enabling converged voice, data and entertainment services. In a bid to stop and ultimately reverse their rapidly declining average revenue per user (ARPU), the mobile operators have entered the broadband market using third generation (3G) technologies.

The fixed-line sector has been undergoing a revolution following the privatisation of Telma. Major investments have been made, the number of fixed lines has more than doubled, albeit from a very low base. ADSL broadband services have been introduced and the decline in fixed-line revenue has been successfully reversed.

Penetration rates in all market sectors are still well below African averages, promising excellent growth potential.

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