Turning setbacks into advantages – mobile growth strong in Ghana

Subscriber growth in Ghana has exceeded expectations in the face of mandatory SIM registration and mobile number portability, according to BMI.

The major developments in the Ghanaian telecoms sector in the first half of 2011 include the extension of the deadline for the completion of mandatory SIM card registration by 90 days from the original date of June 30 2011, and the implementation of mobile number portability (MNP) on July 7 2011. Both developments were expected to temper subscriber growth, both during 2011 and over the next four years. However, intensive market and promotional activities by operators in the run-up to the original deadline for SIM registration resulted in better than expected subscriber growth during H111.

According to the NCA, there were net additions of 1.763mn subscribers in H111, bringing the total subscriber base to 19.199mn and mobile penetration to 77.4% by June 30 2011. About 1.208mn subscribers or 68.5% of H111 net additions were in Q211, demonstrating the impact of promotional activities before the original deadline of SIM registration on subscriber net additions. MTN and Vodafone accounted for 87.6% of net additions during H111.

Considering the rapid subscriber growth during H111 and the strong likelihood of a repeat in H211 as operators prepare for a new deadline to be announced by the regulator, growth is likely to slow – while the market will have about 20.835 mobile subscribers by the end of 2011, reflecting a penetration rate of 84%, growth is likely to drop into single digits over the next few years, with mobile penetration to reach 95.7% by 2015.

Meanwhile, mobile number portability seems to have taken off in Ghana. According to the NCA, 21,059 subscribers ported their numbers to other mobile operators by July 31 2011 following the launch of the MNP service on July 7. Third-ranked Vodafone claimed as many as 43% of ported numbers switched to its network during that period. The implementation of MNP is a welcome development considering its positive impact on competition in the mobile market and the choice operators have over changing service providers. However, its long-term impact on market dynamics will likely be limited as the majority of net additions are through new subscriber acquisitions.

Continued fluctuation in the fixed-line subscriber base means that growth in the sector is difficult to predict, but it will likely slow down over the next five years, with market penetration reaching 1.3% by 2015.

There is no new data on the broadband and internet sector, therefore BMI’s forecast for that sector is unchanged this quarter. The authors maintain their view that wireless access technologies as well as the increase in international bandwidth from submarine cables, will be major growth drivers of internet penetration in Ghana.

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