Frost: Demand Supports Expansion of African Mobile Telecom Market
December 29, 2006 // Published as a news service by IHS
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The African telecommunications market will continue to experience significant growth as new subscribers are signed up and mobile operators introduce new services.
According to Frost & Sullivan, even while continued conflicts across the region make investments relatively risky, it remains a lucrative industry in which to be involved.
"Africa's mobile telecommunications sector is booming as the demand for communications increases," said Frost & Sullivan research analyst Lindsey McDonald. "In such a competitive industry, operators need to maintain high levels of service and keep their products cost-effective."
Analysts said the need for reliable communication created high growth rates for the African mobile telecommunications sector.
A lack of fixed line infrastructure means that mobile telephony is the only alternative, and the issuance of low denomination, prepaid vouchers made the service more affordable, while also supporting wider accessibility.
Two problems pervasive across Africa - poverty and continuing conflict - are having a profoundly negative effect on overall economic growth in the region, analysts said. The telecommunications sector has also been seriously impacted by these dual trends.
"Operating in conflict areas involves very high risk and can be costly," said McDonald. "It is essential that the risks of Africa are weighed up with the rewards."
African mobile operators have needs unique to the market in which they operate, analysts said. For instance, there is an increased emphasis on the production of low-cost handsets.
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"To expand their services in the region, market participants need to maintain good quality services at cost-effective prices," said McDonald. "These are the two most important factors for African mobile users."
Source: Frost & Sullivan.