Mobile phone technology has significantly changed the communications landscape in Africa. The ability to roll out mobile phone services without having to invest in expensive cabling infrastructure combined with massive inflows of private investment has seen Africa post spectacular increases in phone usage over the last decade.
Africa is attracting investment from mobile-phone companies because it has the potential for faster growth than developed regions. The continent has about 28 wireless subscribers per 100 inhabitants, according to the International Telecommunication Union(ITU) which is a Geneva based arm of the United Nations.
The ITU said in October that the number of subscribers on the continent may reach 278 million this year, from 198 million in 2006. Africa, which has 14 percent of the world's population, attracted $8 billion, or 4 percent, of global investment in the telecommunications industry in 2005, the ITU said.
Vodafone Group Plc, the world's biggest mobile-phone company, this month agreed to buy a 70 percent stake in Ghana Telecommunications Co. from the government for $900 million to expand in one of Africa's fastest-growing markets.
In November, France Telecom SA agreed to pay $390 million for a 51 percent stake in Telkom Kenya and won a license to provide telecommunication services in Niger. MTN Group Ltd., Africa's largest wireless operator, held unsuccessful merger talks with two companies this year.
Cellphones in Kenya are now used to send money to relatives in rural areas and have become a part of everyday life. On my recent trip, I witnessed most people that I came in contact with, in procession of at least 2 cell phones on different networks to save money on network to network calls. The competition is steep and increasing rapidly. Consumers are the benefactors. Prior to my leaving you could get unlimited access to the internet anywhere in Nairobi through Zain(formerly Celtel) for about $50. That’s not bad.
A new tipping-point is approaching, however. If the last great revolution was cellphones, the next will be access to the web, an experience largely confined to internet cafés for most in Africa. Only 3% of Sub-Saharan Africa is online. New developments are converging to change this. First is the arrival of several undersea fibre-optic cables to deliver bandwidth at globally competitive prices. East Africa currently pays up to $7,000 per Mb of data, one of the highest prices in the world. SEACOM will link Southern and Eastern African coastal states at 1.2 TB/s to India and France. The TEAMS cable was launched by the Kenyan government and Etisalat. Both should arrive in June next year, providing competition in the wholesale bandwidth arena and ultimately lowering costs for consumers. In Kenya, one of the wholesalers is offering all rural primary and secondary schools free access to their networks. My guess is they are trying to shore up market share before this market reaches the critical mass point.
Keep your eye on this space. There is money to be made here.
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