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Almost two decades of peace and radical reforms have transformed Mozambique into one of the fastest and most consistently growing economies in the world. It is expected to escape the global economic crisis with only a mild drop of GDP growth in 2009 and 2010, before achieving 6% or more again from 2011.

The country was one of the first in the region to reform its telecommunications landscape, immediately after a long civil war ended in 1992. The mobile sub-sector has experienced excellent growth rates following the introduction of competition in 2003 between Vodacom Mozambique and mCel, the incumbent mobile subsidiary of the national telco, TDM. However, market penetration is still well below the African average. The planned licensing of a third mobile network in 2010 is expected to deliver a boost in subscriber growth to the sector but also drive the average revenue per user (ARPU) lower again which had already stabilised following the introduction of mobile broadband services.

The government is intent on introducing competition to the fixed-line sector as well, but it is hesitating to privatise TDM. All other services are open to competition but subject to licensing by the industry regulator, INCM.

Internet usage in the country has been hampered by the inadequate fixed-line infrastructure and the high cost of international bandwidth, but this market sector has started to accelerate following the introduction of various kinds of broadband services including ADSL, cable modems, WiMAX wireless broadband and mobile data services. Further improvements can be expected from the ongoing rollout of 3G mobile services and a national fibre backbone network as well as the arrival of the first international submarine fibre optic cable to the country’s shores in July 2009.

The lower cost of bandwidth has already started to trickle down to lower consumer prices in some service segments, which others have remained unchanged. The arrival of a second international submarine fibre in 2010 is expected to bring further improvements.

TDM financial results – 2006 – 2008

(Source: BuddeComm based on company data)

For more information see new BuddeComm report: Mozambique – Telecoms, Mobile and Broadband.

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This entry was posted on Wednesday, November 11th, 2009 at 11:13 am and is filed under From Paul's Desk. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.