Senegal’s second mobile operator Tigo Bounces Back

Telecoms

Following the loss of 58k customers in Q2 as a result of the customer registration programme, the Senegalese mobile market recovered somewhat in Q3, posting a net gain of 115k customers. However, this represents just 3.5% growth on a quarterly basis (compared to 19.0% in Q3 2006) and in real terms it is the smallest figure for net additions in the past three years. Clearly the effects of the legislation requiring all customers to register their details with their operator are still being felt.

Orange Senegal (Sonatel) took the brunt of the losses in Q2 and it continued to suffer in Q3 with just 42k net additions, its lowest figure for two years. In fact, its customer base at the end of Q3 was still below what it was at the end of Q1. Rival operator Tigo (Sentel) was much less affected by the new legislation with a loss of fewer than 5k customers, and it bounced back in Q3 with 73k net additions, a quarterly growth rate of 7.9% compared to Orange's 1.7%. Indeed, Q3 2007 was the first quarter since Q3 2005 in which Tigo recorded a higher number of new connections than Orange. Despite this impressive result, Tigo is still very much the smaller of Senegal's operators with market share of 28.9% at the end of Q3. This represents an improvement of 1.6pp since the end of the first quarter, but its market share is still 5.0pp lower than it was at the end of Q3 2006.

For the time being there appears to be little prospect of any significant change in the Senegalese market, with Orange on 2.44m customers and Tigo on 0.99m.

However, there may be a shake-up in the not too distant future: in September, Sudanese operator Sudatel was awarded the country's third mobile licence by the Senegalese regulator, the ARTP. Although at this stage it is unclear when Sudatel is likely to launch its network, it is possible that Senegal will become a three-player market by the end of 2008. With penetration at 27.8%, there is ample room for further growth. Furthermore, in the majority of cases a well-funded third entrant has an energising effect on the market in general; we will therefore monitor Sudatel's progress with a great deal of interest.

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