African mobile market viable for investors

19 Oct 2009

LONDON: Informa Telecoms and Media, late last week, announced that despite a slowdown in subscription growth in recent quarters, the African mobile market continues to offer huge potential for foreign investment.

Subscription penetration of 43% in Africa is well below the global average of 65% in 3Q09, and with the trend of multi-SIM ownership becoming ever more prevalent, actual population penetration is far lower.

"Although the pace in subscription growth has slowed down a little, the level of net additions rose to over 20 million in 2Q09 and quarterly growth rose from 4.5% in 1Q09 to 5.3% in 2Q09. Overall the market grew by 28% over the year to end 2Q09, to more than 412 million subscriptions," commented Thecla Mbongue, senior analyst for Africa at Informa Telecoms and Media.

"The African market still represents a significant opportunity for investors. A lesson to be learned from this market, is not to assess it on the population's apparent disposable income but on the size of the demand," she added.

African governments understand the importance of attracting foreign investment and addressing the needs of a growing telecoms sector. However, there are still many instances where the business environment is not as friendly as it should be. Issues include conflicts of interest between the government and the regulator, unfavourable taxation policies, and instability, both politically and economically.

According to Mbongue, "whilst government is key to driving foreign investment in the region, so too is consumer demand, and there are no signs of this dissipating anytime soon."

For more information, go to http://africa.comworldseries.com/.