Ethiopia's decision to postpone its August 2020 elections indefinitely has raised political temperatures in the country, as both the government and opposition parties accuse each other of attempting a power grab.
Telecoms in the Top 500
New capacity coming onstream in East Africa will push prices lower, while foreign players are still flocking to the continent
Finally knocking Telcoms off the top spot, the South African mobile phone company MTN sits atop our ranking, confirming the historic decline in fixed-line national operators. Operating in 21 countries, it is symbolic of the sector’s vitality.
The next ten years will see the clash of multinationals, both domestic and foreign, over the very profitable African market – the profit-to-turnover ratio of the top 25 telecoms companies in Africa is a healthy 17.7%, and their turnover rose 41.5% between 2006 and 2007, a figure inflated by the arrival in our rankings of Zain Nigeria (formerly Celtel) with turnover of $1.2bn.
The struggle between MTN and Zain for the hearts andpockets of African subscribers has taken a new turn, with MTN now feeling it must match the groundbreaking Zain ‘One Network’, whichabolished roaming charges between 12 of the 15 countries where it operates.
In the battle for Africa-wide dominance, Vodafone does not want to be left out, as its recent purchase of Ghana Telecom suggests. It also beat off Nigeria’s Globacom to buy a further 15%of SouthAfrica’s Vodacom, bringing its holding to 65%.
Vodacom was not theonlyAfrican firmto attract foreign investment. Forawhile in 2008, two Indian heavyweights, Reliance Communications and Bharti Airtel, circled aboveMTN, before the deals fell through. One in three Africans nowhas amobile phone, an incredible achievement, indicating strongly that there is still some way to go before market saturation. Orange of France and British Telecomare also looking to expand their presence, especially in East Africa, the most sophisticated market for information communication technology outside of South Africa.
The trend toward vertical integration continues, with individual companies aiming to provide voice, internet andperhaps television services. The 2010 football World Cup in South Africa will be a test for how far Africa has gone down this road, but the signs are already there, withmany of the larger telecoms companiesmoving into internet provision, either by buying up data companies or developing the capacity inhouse.MTN is angling to buy Verizon, a leading South African communications and data provider for the corporate market.
Given the speed with which voice traffic is migrating onto data networks and the improving technologies for long-range wireless connectivity like Wimax, telecoms companies will need to change their business models.
Some already have, with great effect. Neotel is waging a ground war with Telkom over South African residential landlines, providing a wireless connection to the internet and phone networks, priced significantly cheaper than anything Telkom can offer.
All this will accelerate with the long-awaited arrival of several underwater fibre-optic cables that will drastically reduce the cost of international data traffic for companies, and eventually consumers. The Glo-1 fibre linking Lagos to London and the Seacom and Teams cables in East Africa should arrive before mid-2009.
Optimists expect a blossoming of outsourcing business in Kenya, Ghana and South Africa, with new call centres and dataprocessing companies. Pragmatists expect the global downturn to remove excess offshoring demand from the system, making it hard for start-ups.