The African telecom sector is poised at a digital
revolution. Since its liberalization in the 1980s, the involvement of
multinational conglomerates has promoted a healthy competition which led to its
Tanzania, Uganda, Sudan, Nigeria, Kenya, and South Africa
are just a few examples of African countries which have recognized the
opportunities of the privatization and liberalization of the state-owned ICT
Most African states had long been resistant to liberalize
their telecom markets but had to acknowledge that it was necessary to allow
growth and expansion. Due to the deficiencies associated with the state-owned
telecom enterprises, the African governments had to realize that only
privatization would bring the much-needed financial discipline. African finance news
The first series of reforms were focused on making up for
the financial losses caused by the public sector enterprises. Due to the lack
of adequate funding and management, most of them had not been able to render
their services properly.
Overall, the privatization has increased internet speed and
connectivity, thus prompting new subscribers and increasing business results.
The improvement in network infrastructures has also resulted in increased
mobile phone users, more affordable data rates and an improved reach to urban
as well as rural areas. A good example is the privatization of NITEL and M-Tel
by the Nigerian government in April 2015 which resulted in a significant spike
in sales numbers.
A significant portion of the African telecom market share is
covered by a few key players such as Open Serve, Telkom, Neotel, Vodacom, MTN,
Cell, Seacom, Broadband Infraco and Teraco. Some of these companies have also
spread their reach into other African countries or have established joint
partnerships with the government, for example, to launch public WiFi hotspots.
The telecom sector in Africa has opened up a plethora of
business opportunities. Among all other continents, Africa has been the fastest
growing mobile market during the past five years, with more than 170 million
mobile users. Mobile telephony has had a significant impact on economic growth,
which in many African countries is twice as high as in developed countries.
Considering that in 2004, only 6 percent of the African
population owned a mobile phone, the growth in the telecom sector is not
entirely surprising. The price-drop on mobile devices and the introduction of
low-cost phones for developing economies have carved an industry with huge
potential. Nigeria, for instance, has a mobile market that has been growing at
a rate of 100 percent per year.
When compared with other continents, the growth of the
telecom sector in Africa looks far more promising. While other continents have
reached a saturation point in the growth of revenue and subscribers, Africa
opens up fresh opportunities and positive market trends.
Furthermore, Africa is still opening its gates to
development, and the economic growth brought about by the telecommunication
sector has further contributed to making it a profitable investment
opportunity. Business news articles
from the privatization, the growth in the market has been primarily driven by
the subsidization of handsets, affordable prepaid plans, and provision of 3G
and 4G services. Future growth in the market is expected to be driven by
factors like better network coverage, lower cost of handsets and call prices,
and improved mobile data connectivity.