Abeer Allam | May 20, 2008
MOBILE phone companies will boost their investment in infrastructure and operations in Africa by 57 per cent over the next five years, to $US55 billion ($58.8 billion), according to a UN telecommunications agency.
"Investors are seeing huge opportunities here and they have pledged billions of dollars," International Telecommunication Union secretary general Hamadoun Toure said."It will help Africa move away from poverty."
The UN group helps develop communications. MTN Group, Africa's biggest mobile-phone operator, Vodacom Group, France Telecom's Orange unit and Zain, Kuwait's largest mobile-phone company, are all planning to expand or improve their networks in sub-Saharan Africa, according to the UN agency.
The number of mobile subscribers in Africa has boomed by 50 per cent since 2002, reaching 265 million users by the end of 2007, or about 27 per cent of the population, Vanessa Gray, an analyst at the Geneva-based group, said. In 2007, 65 million people joined the ranks of mobile users.
"Governments can do more to increase the subscription base," Ms Gray said. "They should bring down taxes on mobile handsets, remove tariffs on equipment and allow companies to share infrastructure and compete on the service level."
Africa has the world's highest annual growth in mobile subscribers. Eight years ago, half the continent's subscribers were in South Africa, but today 85 per cent of mobile users are from elsewhere on the continent. One-in-three people has a mobile today, compared with one in 50 in 2000.
Egypt and Morocco are growing fastest, while Eritrea and Ethiopia are the slowest, with less than 2 per cent annual growth, as the governments there monopolise telecommunication services, Ms Gray said.
"When you liberalise the sector, there will be more competition, lower prices and more subscribers," Ms Gray said.
The industry has created new services such as micro-payment, pre-paid recharging and mobile commerce in the continent.
Economic growth in sub-Saharan Africa, which has a population of 770.3 million, will accelerate to 6.75 per cent in 2008, from 6 per cent this year, according to the IMF.
India's Bharti Airtel said it was in talks to buy MTN. Emirates Telecommunications, the United Arab Emirates' biggest phone company, said it too was evaluating MTN as a potential takeover target.
Orascom Telecom Holding, the biggest mobile-phone company by subscribers in the Middle East, said it had created a company, Telecel Globe, to look for investment opportunities in telcos in Africa and Asia.
"Investors are coming because Africa is the only region with 300 per cent or 400 per cent mobile-growth rates," Mr Toure said.
Bloomberg