Continued high Internet and telecoms growth in West Africa, says new report

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This week sees the publication of the first report in Balancing Act’s new series African Telecoms and Internet Markets. Part 1 covers 16 countries in West Africa and shows that the sub-region has experienced strong growth in both the mobile and Internet sectors since 2003.

The sixteen countries covered by the report are: Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo.

For mobile subscribers, the top 5 markets in West Africa by number of subscribers are (figures rounded up): Nigeria (21.5 million), Ghana (5.2 million), Cote d’Ivoire (4 million), Senegal (3 million) and Mali (1.4 million). And although Cote d’Ivoire and Senegal are not among the top 5 mobile growth countries, they will both to continue to experience healthy increases in subscribers. Both markets are set to see the entrance of another mobile competitor in 2008.

The top 5 countries that have shown the most growth over four years are (in descending order): Guinea Bissau, Nigeria, Liberia, Niger, and Ghana. Given the population size of Nigeria, it has been the largest market in terms of growth in overall subscriber numbers. However, the stratospheric increase in numbers is beginning to slow down a little.

Although the data is less precise than for mobiles, in terms of Internet subscribers, there are four countries that stand out as significantly larger than other countries in the region (in descending order) in terms of Internet connections: Nigeria (71,000), Ghana (45,000), Cote d’Ivoire (35,000) and Senegal (30,000).

Every country has shown significant growth in Internet subscribers. However, the top 5 countries in terms of percentage growth over four years have been (in descending order): Guinea Bissau, Liberia, Senegal, Cote d’Ivoire and Ghana. The growth in Guinea Bissau and Liberia has come from a period of stability and looks set to continue to increase if both countries remain stable. But Senegal, Cote d’Ivoire and Ghana have all shown significant growth in subscriber numbers that can in part be attributed to the introduction of broadband services.

Other findings from the report include:

• There are considerable variances in retail broadband prices. The difference between wholesale bandwidth prices on the SAT3 fibre and satellite account for some of the variance in these retail prices. But it is hard to see why a Nigerian wireless provider is charging US$192.02 for a 256 kbps download speed service. It must be that all markets bear the prices they have until someone comes along and does it cheaper.

• The two largest users of international Internet bandwidth are Senegal (1.24 gbps) and Nigeria (4gbps). Although not in a competitive market, Sonatel has long been a “low-price progressive” and a regional hub for Mauritania and Mali. With Nitel now in private hands, there is perhaps some hope that it will follow a similar pricing strategy that will see this even this large volume of international bandwidth grow. In mid 2007, the new owners were having problems getting additional SAT3 bandwidth because of unpaid bills but these have been resolved.

• There are three new international fibre projects connecting West Africa and once only one of them is completed, all 16 countries focused on in the report will be connected to fibre.

• Although there are only public “hot-spots” in Accra and, these are now becoming a much more regular feature in terms of services provided in hotels. For example, range of hotels in Cape Verde, Gambia, Liberia and Nigeria all offer hot-spots. Free Wi-Fi hot-spot access for hotel customers is beginning to be the current wave of service provision rather than the traditional over-priced access at a business centre in the hotel.

• The majority of other fixed line operators in the region have come down to between US25-50 cents a minute to main international destinations and where prices have been at the lower end of that range, it has encouraged mobile operators to follow suit.

• Five countries (Benin, Ghana, Liberia, Mali again, and Sierra Leone) have announced that they will privatise their incumbent in the next 12-18 months. Benin’s Council of Ministers has set June 2008 as the date for the sale of both Benin Telecom and its mobile subsidiary, Libercom. Perhaps Mali will make it this time

This 272 page report is the first part of that series – African Telecoms and Internet Markets – covering West Africa and is the most detailed summary of its kind covering the region’s 16 countries. It contains: 16 country profiles each with a full page map showing network roll-out and coverage; two detailed spreadsheets, one providing an overview of regional comparative data and the other 155 mobile calling plans from the region; charts and graphs showing both growth patterns and market share; and 50 charts, maps and tables. There is no other report that offers both this range and depth of coverage.