BuddeBlog

With peace restored in 2002 after decades of civil war, foreign investment in Angola has multiplied and the mobile market has soared despite a continued duopoly between Unitel and Angola Telecom’s Movicel. The country is the second-largest oil producer in sub-Saharan Africa, and the rise of oil prices has led to double-digit GDP growth in recent years. However, following a slowdown in 2009 and 2010, the economy is forecast to grow more in line with the African average going forward, at around 6% p.a.

Competition was also introduced in the underdeveloped fixed-line market, but launch delays and consolidation among the newly licensed players have led to a duopoly in this sector as well between Angola Telecom and Mercury Telecom. The long awaited start of Mundo Startel’s fixed-wireless operations in 2009 has created a third force in this market.

The mobile network operators have launched 3G services and are shaking up the broadband market where fixed-wireless operators and ISPs with CDMA and WiMAX-based networks have been competing with Angola Telecom’s ADSL and cable modem services. However, prices are still beyond the reach of most Angolans due to the high cost of international bandwidth as a result of Angola Telecom’s monopolisation of the SAT-3/WASC international fibre optic submarine cable. The recent landing of new international fibre systems in the country is now expected to change this, coupled with a US$500 million national fibre backbone network rollout.

Angola Telecom is going through a restructuring process with the help of international consultants. A majority stake in its mobile unit, Movicel has been sold to private investors and a migration from CDMA to GSM/UMTS technology has been announced. The creation of Infrasat as an independent satellite business unit and the Angola Cable consortium for international fibre connections are additional steps towards greater liberalisation of the country’s telecom market, improved efficiency of the national telco and its eventual privatisation. A third mobile operator licence has also been discussed.

Market highlights:

• Second international submarine fibre optic cable lands;
• Coordinated trans-sector national fibre rollout;
• Angola Telecom restructuring;
• Recovery from global economic crisis;
• Estimates for mobile, fixed-line and internet market for 2012;
• Forecasts for mobile market to 2013 and 2016;
• Profiles of major players in all market sectors.

Estimated market penetration rates in Angola’s telecoms sector – end-2012

(Source: BuddeComm based on various sources)

For detailed information, table of contents and pricing see: Angola – Telecoms, Mobile, Broadband and Forecasts

Botswana is one of Africa’s wealthiest nations with a thriving economy mainly based on diamond mining and tourism which recovered quickly from a recession during the global financial crisis (GFC). Regulatory reform has turned the country into one of the most liberalised telecommunications markets in the region, including a service-neutral licensing regime which takes into account the increasing convergence of technologies and services.

Although at well over 100% Botswana has one of the highest mobile market penetration rates in Africa, the average revenue per user is also one of the highest on the continent. In a bid to generate new revenue streams and secure market share, the three mobile operators – Mascom Wireless (an affiliate of South Africa’s MTN), Orange Botswana and BeMobile (a subsidiary of fixed-line incumbent BTC) – have entered the underdeveloped broadband sector with different strategies including 3G mobile, WiMAX and bundling with fixed-line (ADSL) services. Here they are competing with a large number of ISPs, some of which are rolling out their own wireless access infrastructure.

A nationwide fibre backbone supports a wide range of services, and the landlocked country’s access to international bandwidth is being improved by a regional fibre backbone network and new submarine fibre optic cables off the continent’s east and west coasts.

The planned privatisation of BTC has been postponed in the wake of the global economic crisis but is expected to be resumed in the near future.

Market highlights:

• One of the highest levels of mobile and fixed-line penetration in Africa;
• GDP growth has rebounded to 6% following a recession in 2009;
• BTC privatisation planned;
• Profiles of major players in all market sectors;
• Different mobile operator strategies to tackle the broadband market.

Estimated market penetration rates in Botswana’s telecoms sector – end 2012

(Source: BuddeComm based on various sources)

For detailed information, table of contents and pricing see:

Botswana – Telecoms, Mobile and Broadband

Following a 30-year dictatorship between 1967 and 1997, the Democratic Republic of Congo (formerly Zaire) has been through two wars and is still seeing violent conflicts in the eastern part of the country. The economy of this third largest country in Africa relies heavily on mining. However, much economic activity occurs in the informal sector and is not reflected in GDP data. An uncertain legal framework, corruption, and a lack of transparency in government policy are continuing long-term problems. The country has been hit hard by the global economic crisis, but GDP growth is expected at between 6% and 8% in the coming years.

As a result of the political instability since the mid-1990s, the national telecom system is one of the least developed in the region. Rural areas, where almost 70% of the population resides, are virtually devoid of telephone or Internet service. The national operator, OCPT theoretically has a monopoly on the sector under 1970 legislation, but it has been unable to provide a modern telecom network and unsuccessful in finding major investors for privatisation. Recognising the need for telecommunications infrastructure, the government is only loosely regulating the sector.

Mobile networks have taken over as the providers of basic telecom services. By 2001, some 16 private operators had been granted mobile telephony licences and the subscriber base was growing at triple digit rates per year. However, the proliferation of networks has also caused interference and compatibility problems, and there is limited available spectrum due to poor spectrum management. As a result, the mobile sector has consolidated and now has four major players: Vodacom Congo, Bharti Airtel (formerly Zain), Millicom (Tigo) and Congo Chine Telecom (CCT) in which OCPT holds 49%. The vast majority of subscribers are on prepaid plans.

Development of the Internet market has been held back by the poorly developed national and international infrastructure. The mobile operators are beginning to play a significant role in this sector as well, following the launch of mobile data services. However, no 3G mobile systems have yet been launched apart from a CDMA-EV-DO system in Kinshasa, which means that services offering true broadband speed are currently only available through relatively small wireless networks using other technologies, mainly WiMAX.

With support from China, OCPT is now finally rolling out a fibre optic national backbone that will ultimately also provide access to fibre optic submarine cables for low-cost, high-quality international bandwidth.

Market highlights:

• National fibre backbone rollout and rehabilitation of fixed-line network;
• Access to international fibre bandwidth expected in 2012;
• WiMAX is the predominant broadband access technology;
• Profiles of major players in all market sectors.

Estimated market penetration rates in the DRC’s telecoms sector – end 2012

(Source: BuddeComm based on various sources)

For detailed information, table of contents and pricing see: Democratic Republic of Congo – Telecoms, Mobile and Broadband

In terms of the regional economy, the Caribbean has faced a number of difficulties during the last two years. Weak local economies combining with a range of austerity measures have affected many islands. These conditions have contributed to reduced disposable incomes among telcos’ customers. Little respite is expected during 2012: although the number of tourists in some islands increased during 2011 recovery has been isolated rather than regional.

The key market players – LIME and Digicel – reported slight declines in revenue in 2011, though this has barely impacted on their ability to maintain investments in their fixed and wireless networks. LIME reported a 3% fall in revenue in the first nine months of 2011 as well as a 15% fall in EBITDA. Yet the company has maintained its expansionist momentum, expanding into the Bahaman market in mid-2011 through its acquisition of a 51% stake in BTC. The deal brought LIME a monopoly on the Bahaman mobile market until at least 2014, as well as a dominant share of the local fixed-telephony and broadband sectors. LIME also recently completed the East-West cable connecting Jamaica to the British Virgin Islands, with a landing in the Dominican Republic (which became a new market for the company).

There have also been significant developments in the 4G sector: the rollout of Digicel’s WiMAX network, launched in Jamaica in 2006, now covers most of the population. At the end of 2011 Digicel launched a WiMAX network in Barbados following an investment of over BDS$20 million. With LTE developments, also, operators are keen to continue investments in order to reap financial rewards further down the track. In a few markets, such as the Bahamas and Puerto Rico, both HSPA and LTE networks have been deployed. In Puerto Rico, Open Mobile and AT&T have both launched commercial LTE services in the 700MHz band, recently allocated by the regional telco authority ECTEL for wireless broadband use.

Although the coming year will present further economic difficulties for the region, players in the Caribbean telecom sector have shown an encouraging willingness to invest in their markets, and so further develop the potential for high-end services and revenue.

Henry Lancaster,
Senior Analyst, Caribbean

Key developments:

Digicel launches WiMAX network in Barbados; LIME launches FttH in Jamaica with a view to offering triple play services; regulatory developments to 2012; operator data for Q3 2011 with updates to early 2012.

Companies covered in this report include:

Digicel, Cable & Wireless, Globalstar.

For more information on the Caribbean telecom market, see the reports:
Caribbean – Telecoms Market Insights and Statistics;
Caribbean Countries – Anguilla to Bermuda;
Caribbean Countries – British Virgin Islands to Montserrat;
Caribbean Countries – Netherlands Antilles to US Virgin Islands.

Having secured an IMF bailout in 2008, the Hungarian government is appealing for a second loan worth up to €20 billion. Part of this sum will go to paying back some €5.9 billion of the initial loan which is now due. The stresses on the Hungarian currency has helped to raise government borrowing costs to a new high (above 9% on two-year bonds), and now threatens to derail further loan agreements, resulting in a potential loan default.

Part of the difficulty has been caused by the swathe of legislation introduced during the last two years. Among them is the Central Bank Act which permits the government to appoint a deputy governor, thus perceptively threatening the central bank’s independence from government interference. The recent EC launch of legal action against Hungary for violating EU treaty law is a contributory hurdle.

Amidst the turmoil, the government is aiming to secure much needed cash from the current auction of spectrum. This in itself has been a protracted affair, dating to early 2011 when the EC requested that Hungary comply with the EU’s updated GSM Directive (providing for the 900MHz band to be used for 3G services). The government duly initiated a number of legislative changes, including a new frequency fee system aimed at promoting investment, and amendments to legislation on spectrum allocation.

The auction will award a fourth 15-year mobile licence, specifically for a block of 10.8MHz in the 900MHz band. Currently, T-Mobile, Telenor and Vodafone hold rights to operate services in the band but given that it is reserved for a new entrant these players are barred from bidding. However, they are bidding in the second round, which includes frequencies in the 1800MHz band (Block D) and 2100MHz band (Block E). The Romanian telco RCS&RDS and the Vietnamese telco Viettel were excluded from the tender (RCS&RDS had failed to pay appropriate fees while Viettel had provided an incomplete application), thus leaving the only new entrant as the consortium of the state-owned Magyar Posta, the Hungarian Electricity Works (MVM) and a unit of the Hungarian Development Bank (MFB).

Overall, the auction could raise between HUF30 billion and HUF33 billion for the government, which will go some way to supporting the national budget.

Henry Lancaster,
Senior Analyst, Europe

Key developments:

New spectrum block in the 900MHz band auctioned; telecom tax affecting mobile revenue; M2M sector gaining traction; T-Mobile Hungary expands HSPA+ network; Tesco and Lidl prepare for mobile services as MVNOs; T-Mobile launches Hungary’s first commercial LTE service; mobile subscribers base falls in H1 2011; Telenor Hungary upgrades HSPA+ network; regulator market data to December 2011; operator data to September 2011.

Companies covered in this report include:

T-Mobile, Telenor, Vodafone Hungary.

For more information see the updated reports:
Hungary – Broadband Market Insights, Statistics and Forecasts;
Hungary – Key Statistics, Regulatory and Fixed-line Telecoms Overviews;
Hungary – Mobile Market Insights, Statistics and Forecasts;
Hungary – Digital Economy and Digital TV – Insights, Statistics and Analysis.