| ||||||||||
 |
|
STUDY ABROAD OPTIONS
|
|
||
 MOROCCO - EUROPEAN CHIP-MAKER TO SET UP SHOP Low wages, proximity to Europe and a planned free-trade agreement with the EU have tempted Franco-Italian chip-maker STMicroelectronics, the world’s sixth largest semi-conductor manufacturer, to locate in Morocco. It follows Aerospatiale, Valtronic, Delphi, Yazaki, Volkswagen and US plane maker Boeing, which last year announced plans to open an electronics component facility in a joint venture with Royal Air Maroc. STMicroelectronics says its new US$300m plant in Bouskoura, near Casablanca, will be the most advanced in the world in terms of automation and technology. Initially it will have a capacity of 2.3m electronic components per day and will employ 730 people; however, employment is expected to increase to 2,500 workers, equivalent to a 50% expansion in employment in the electronics sector. There are currently some 20 electronics firms employing 5,200 people and achieving a turnover of US$90m (1999 figures). Between 1995 and 1999 Moroccan electronics output doubled, while exports increased almost 60%. The new plant will be used to assemble and test a wide range of semiconductor products used in the automotive, IT, home appliance and telecoms industries. At full capacity it will produce 25m integrated circuits a day. (source: Business Africa via www.AfricaNewsNow.com ) WEST AFRICA: STEMMING THE DECLINE IN MOBILE ARPU Early this week, international cellular operator Millicom International Cellular (MIC) announced strong results for the first quarter of 2001. While encouraging for its operations in the African market (the subscriber base rose by 14% and proportional quarterly revenue shot up 42%), the company’s results also confirmed the relatively low average revenue per user (ARPU) levels in the region. MIC Africas results suggest ARPU levels in the US$20-$25 range for the company’s prepaid-only Senegal venture, a range similar to the ARPU levels recorded by Senegalese rival Sonatel. The neighbouring markets of Ghana and Cte dIvoire show similar downward trends, with monthly ARPU falling by 10-15% to a still respectable US$30, but threatening to fall even further over the next few years as operators expand their subscriber base. Needless to say, the implications of such a trend are significant for operators in the region; in particular, mobile carriers will have to make hard choices to ensure long-term revenue and profit growth. One obvious inference from the decline in ARPU levels in the region is that cellular service has truly reached mass-market proportions (though "mass-market" here will generally represent a small proportion of the population). As operators continue to slash service access costs to penetrate the lower rung of the market, the profile of their subscriber base will evolve, and not in the operators favour. In West Africa, up to 90% of new connections are prepaid, yet the average prepaid cellular subscriber is a fickle, price-susceptible and infrequent user. Indeed, the predominance of prepaid means that operators increasingly have little idea who their subscribers are. This evidently cannot go on without harming operators in the medium term with slower and perhaps even negative revenue growth. In turn, operators in the region have to develop solutions to stabilise or increase ARPU levels. Increasing tariffs is certainly an easy option, but it doesn’t quite solve the issue; it alienates existing users while not necessarily generating additional revenue from the low end. Thus, solutions have to be built around enhancing usage and increasing traffic. Beyond marketing gimmicks, however, options here may be limited as well. In more developed markets, operators have introduced a raft of services from sports news to horoscope and the like; such services are arguably not adapted to the region. Short message services (SMS) may offer a modicum of relief, but cannot yet be counted on to single-handedly stem the declining ARPU. So, what are operators to do? To begin with, there has to be an acknowledgement that low affordability levels substantially shrink the size of markets in the region. The more operators move down consumer ranks, the more they will be offering services to groups of users who technically cannot afford them. Anecdotal evidence and our affordability models suggest that this may already be happening. We estimate addressable markets for cellular services to be around 20% of the population in the West African region, assuming (optimistically) that about 20% of household spending is allocated to communications services. Further analysis shows that the majority of this addressable market cannot afford recurring monthly ARPU levels higher than US$15. Usage-enhancement solutions are of little help, because people cannot reasonably be expected to pay more than they can afford. As a result, we estimate "natural" and sustainable ARPU levels around US$15-20 in the region. This "natural" ARPU level is obviously far from ideal for long-term revenue growth, and in the end, operators will have to make hard choices between subscriber market share at all costs and stabilised (though still generally declining) revenue per user. While disconnecting subscribers sounds like anathema in a region where operators still value themselves based on the size of their subscriber base and, to some extent, goes against stated universal service objectives, it only makes business sense. Perhaps more than next-generation wireless technologies and mobile Internet, the improvement of the user profile and more rigorous customer relationship management are keys to long-term cellular business sustainability in the region. (source: Pyramid Research via DigAfrica) KALAHARI.NET REPORTS TURNOVER SURGE A 100 percent month-on-month turnover increase has been announced by Kalahari.net in figures just released for the period from February to March 2001 - despite this period traditionally representing the low point in the retail cycle. (source: http://commtech.b2bafrica.com/industry_news/272647.htm ) COINTEL BILLS OVER R2M DAILY IN M-COMMERCE TRANSACTIONS After just five years, m-commerce solutions and telecommunications value-added services provider, is billing over R2 million a day in m-commerce transactions and is ranked alongside SA’s strongest companies, Anglo American and De Beers, as a platinum company. (source: http://www.boot.co.za/news/may01/cointel2.asp )
|
|
Custom Search
     
 |
|
|
This page last updated on January 28 2004.
|
|||
