| ||||||||||
 |
|
|
|
||
 WEST AFRICA GOES FOR CELLULAR SERVICES OVER LAND LINES Nearly ten years after the introduction of cellular services in West Africa, it is now clear that the epicentre of communications markets in the region has shifted to mobile networks. In Cameroon, Cote d’Ivoire, Ghana, Nigeria and Senegal, mobile services have shattered (or are about to shatter) established business models and created new ones, crowning new market leaders and endangering incumbent service providers. Along with the gradual liberalisation of local markets and the slow emergence of the Internet, the explosion of cellular is one of the market shocks fundamentally altering the West African communications landscape. The analysis of these trends yields the following conclusions: * The cellular market will become the communications market’s largest segment in revenue terms by 2005 in Cameroon, Nigeria and Senegal. In Cote d’Ivoire, revenues from voice and data telecoms services are forecast to be at least equal to cellular revenues over the next four years; in Ghana, the cellular market will not be large enough to generate revenues that surpass those generated in a competitive fixed-voice and data market. * Saturation points in African mobile markets stand at around 50-60% of the addressable market, translating into a penetration of the population of about 10-15%. Pyramid Research is forecasting that markets in the West African region are unlikely to reach their saturation points over the next five years, but this should happen shortly thereafter, between 2006-07. * In the five markets, we expect average revenue per user levels (ARPU) to fall by more than 50% over the next five years, under the weight of prepaid users, increased usage discipline among lower users and, to a lesser extent, lower prices. At present, operators in West Africa seem to focus more on subscriber market share; however, declining ARPUs and the predominance of prepaid packages mean that operator focus will have to shift back to the fundamentals of revenue generation and growth, as well as cost containment. * As for the deployment of next-generation wireless systems, the viable solutions to prop up ARPU will be those that enable operators to meet client needs cost effectively. Thin-bandwidth services like short messaging service (SMS) seem to fit the criteria; although a case could be made on a market-by-market basis for general packet radio services (GPRS), we believe EDGE and W-CDMA are not worth the hassle, at least not over the next five years. Even GPRS, if introduced, would have to be focused on supporting relevant applications and be targeted to business or high-end users, a small addressable market. At this point, only the Nigerian market appears large enough to justify some of the investment required to establish GPRS systems. * African fixed carriers are in a danger zone. At the very least, cellular (along with some other factors) should accelerate the end of the fixed carrier business model in the region. This is not to suggest that fixed carriers will disappear; in most markets, their networks remain the largest. By our estimates, fixed telco revenues also remain the largest across the region, although they will be supplanted by mobile revenues over the next four years. However, this suggests that fixed carriers will have to act quickly to transform their business models, preserve their revenue streams and generate new ones. Those that do not will be marginalised and eventually will disappear. * In the Internet connectivity segment, successful ISP ventures will be those that integrate a community-based approach into their services, as the home dial-up addressable market is simply too small to sustain a viable operation. * Demand for broadband infrastructure is as strong in West Africa as anywhere else in the continent, and will be better served by fixed wireless broadband, including local multi-point distribution services (LMDS) and microwave multi-point distribution services (MMDS); LMDS and MMDS are emerging as the leading broadband media, thanks to their flexibility and the fact that their deployment is driven by private service providers. In markets such as Nigeria and Cameroon, we are forecasting that fixed wireless broadband will account for more than 75% of all broadband deployments over the next five years, making it the region’s main broadband medium. (source: Pyramid Research via DigAfrica) SA’S FSB TO LOOK INTO DATATEC AFTER R1 MILLION SETTLEMENT The Financial Service Board could take legal action against certain other parties who are implicated in an investigation into alleged insider trading in Datatec shares, after two directors of Datatec agreed to pay R1 million as a settlement to the allegations. (source: http://www.boot.co.za/news/may01/datatec22.asp ) ALTECH BOOSTS HEADLINE EARNINGS BY 45% JSE-listed Allied Technologies (Altech), has delivered better than expected full-year results, boosting headline earnings by 45.5%. (source: http://www.itweb.co.za/sections/financial/2001/0104240952.asp ) WARRANTS ISSUED ON DIDATA AND M-CELL Investment bank UBS Warburg has issued a call warrant on M-Cell as well as put and call warrants on Dimension Data. (source: http://www.itweb.co.za/sections/financial/2001/0104231103.asp )
|
|
   
     |
|
|
This page last updated on January 28 2004.
|
|||
