West and Central Africa Telecommunications Report Q3 2008

The release of full-year results from the major mobile operators in West Africa (namely MTN, Orange and Millicom International's Tigo) has allowed a critical reassessment of our forecasts. In most cases, strong growth in the last quarter of the year pushed year-end penetration figures above our 2007 estimates. As a result, we have upped many of our forecasts for 2008, a move supported by Q108 subscriber figures, which tended to be robust across the board (particularly given the fact that Q1 is usually one of the worst quarters of the year in terms of subscriber growth). There are some exceptions to this trend. In Senegal, despite a strong recovery, the market was still affected by the downturn in growth in Q207, when the mandatory registration of all subscribers led to the disconnection of large numbers of inactive customers.

Of all the markets in our report, Gabon has by far the highest penetration rate, at almost 85% at the end of 2007, compared with rates of under 35% in the majority of other markets. Gabon is something of a special case - the country's oil wealth helped fund the development of a mobile market far earlier than in neighbouring countries. Of the other markets analysed, Mauritania has the next highest penetration, although this is owing more to high interconnection rates (that encourage mobile users to carry multiple SIM cards) than to widespread demand.

This report also features our updated business environment rankings for the African telecoms market.

This quarter we focus in particular on the macroeconomic risks to growth in the telecoms market moving forward, given the current global economic climate and the impact that food inflation could have on disposable incomes in Africa. South Africa has replaced Nigeria at the top of our rankings, owing to improvements in its regulatory environment and the growth in value-added services, which are still not a viable mass-market proposition in the majority of African countries.

Regulatory issues continue to have a major impact on growth in African mobile markets. In Ghana, for example, the national regulator is still pursuing its liberalisation agenda. Preparing to licence the country's sixth mobile operator. We wonder whether the market can support so many providers, and anticipate some consolidation in the future. However, the rapid opening of the mobile sector has unfortunately not been matched in the fixed-line market, where the re-privatisation of Ghana Telecom is looking no closer, after the government rejected several bids from major European operators on the grounds that they were too low.

" Covering the West African telecoms market, this study looks at penetration figures and the changing regulatory environment. This report gives you access to forecasts for 2008 and tables and figures from 2007 "

Reviewed by JB, 07 Sept 2008