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ISSUE NO 49 ON THE MONEY

SIZING UP SENEGAL AS AN E-BUSINESS MARKET

Like most markets in Sub-Saharan Africa, Senegal would rank with the lower tier of world markets in Pyramid Research’s e-business readiness rankings, though well ahead of many markets in the region. Senegal’s connectivity levels remain extremely low and are primarily driven by public Internet access points. The infrastructure for consumer to business is similarly underdeveloped, with a credit card penetration well below 1%. In addition, the capital market is generally too small to provide the necessary funding for the start-up of a sustainable B2C business.

Sizing up the addressable market for a B2C business in Senegal is fairly arduous, if only because B2C activity is virtually non- existent. With a user base of about 20,000 as of late 2000, Internet penetration is a mere 0.2%. While this penetration rate will grow by an annual average of at least 50% over the next five years, it will only reach around the 1% threshold by the end of the forecast period. If one includes users outside Senegal - a potential market for B2C firms serving this market - the number of users grows only marginally, to about 23,000

The proportion of potential online shoppers is similarly small, representing an estimated 1.5% of all users. Given the cost of Internet access in the country, the majority of online shoppers are more likely to come from markets outside Senegal. Within Senegal, users not using credit cards would have to go through cumbersome payment processes that complicate the whole online shopping experience and make it unnecessary. In a best-case scenario, online shoppers (including those outside Senegal) would represent less than 5% of the total user base within the next four years.

Assuming an average monthly revenue per transaction of $100, we would estimate Senegal’s B2C market at about $300,000 as of late 2000. Using optimistic assumptions, we forecast a rapid market growth to nearly $10m by the end of 2005. With credit card penetration set to increase at a snail’s pace in the local market over the next few years, any revenue boost would likely come from outside the Senegalese market, from the wealthier Senegalese Diaspora. Thus, any local B2C firm would have to boost its user base outside the Senegalese market to stand a chance of survival. (source: Pyramid Research via http://www.AfricaNewsNow.com)

M-CELL CO AND UNISYS IN WIRELESS DEAL

Airborn, a new unit of South African mobile network operator M-Cell, said on Monday that it had entered into a multi-million dollar deal with US systems integrator Unisys for internet-based wireless telephony.
(source:Woza http://www.woza.co.za/reuters/feb01/mcell19.htm )

END IN SIGHT FOR MALITEL AFFAIR

Mali’s first GSM network is set to be launched in the next few days, after private investors agreed to cede their holdings stakes in Malitel .
(source: Kabissa via http://www.africaintelligence.com/ )

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