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Short list of opportunities and challenges facing telecoms business in Africa

March 10, 2012  »  Business & MobileNo Comment

Inspired by a recent Reuters article on what attracts telecoms operators to African markets, we decided to summarize both the appeal of doing telecoms business in Africa, along with the turn-offs.

The good:

  • stiff competition in open markets
  • bidding competition among multinational operators based in China, India, Europe
  • new cheaper smartphones
  • growing corporate market
  • promise of mobile
  • middle class is growing
  • large populations offer scale
  • oil-rich nations provide an extra economic base
  • post-revolution Libya and Tunisia are in a rapid growth phase

The bad:

  • poor infrastructure
  • fragmented markets (ie. Africa is a series of countries and not one uniform continent)
  • consumers in Africa tend to spend between $1 to $10 per month on telecommunications, far less than in Europe or the U.S.
  • high cost of running networks (due to poor infrastructure)
  • unpredictable regulation
  • limited middle class
  • companies are worried about the safety of their employees
  • slashed prices for consumers have little impact in terms of how many calls are made or texts are sent