Competition, energy issues pressure Africa telecom in 2010

15.01.2010
Increased competition, demand for newer technologies and a shortage of energy supplies are likely to exert pressure on African telecom this year, according to Syniverse, a mobile applications company working with 45 mobile operators across the continent.

Competition will put pressure on both the small and big operators, although the small operators will be challenged to find new and innovative ways to generate revenue and growth while maintaining a high quality of service on extremely tight margins.

Africa's mobile penetration is still below 30 percent, with plenty of room for growth, but Syniverse says it has favored big operators with large revenue bases. In some cases, smaller operators have been pushed out of business, but there is opportunity for those who have survived, according to Eugene Bergen Henegouwen, executive vice president, Syniverse EMEA.

"Smaller, independent African operators certainly are not in danger of dying; increasing competition in Africa puts pressure on operators of all sizes. Smaller market entrants have excellent opportunities to grow -- in many cases, they are more nimble and better able to react quickly to changing market conditions," said Henegouwen.

The licensing regime in several countries, however, has favored bigger operators by default, by offering unified licenses with few -- if any -- restrictions on services that can be offered.

In Kenya, the unified licensing regime has allowed big companies like Safaricom to enter into mobile content and application provision, which has exerted pressure on smaller mobile content and application service providers that cannot compete with Safaricom's revenue and market base.