The cellular market in Africa and Middle East is set to see an intensified competition with new carrier licenses being made available and late entrants struggling to survive, says a latest report from an IT analyst firm.
“Although third entrants in Africa and the Middle East have gained as much as 37 percent of their markets within three years, the picture for fourth and fifth operators is gloomier: our analysis suggests that market shares of 8.7 percent and 4.7 percent, respectively, are more realistic targets,” said Dearbhla McHenry, author of the report.
In-country consolidation in the mobile market has already begun in Africa and the Middle East, according to the research firm, and will become a more important trend over the next few years, pushing incumbents to find new ways to protect their customer base.
“Several factors determine whether a late entrant to a mobile market in Africa and the Middle East will overcome the odds and gain significant market share, as explained in this report,” says McHenry. “It is often the case that operators entering a market where another operator has recently launched will tend to find it difficult to establish an additional brand,” she explained.
The region’s leading operators, however, are getting better at reducing churn and increasing loyalty, says researcher in the report titled “Three is Company, Four is a Crowd: Mobile Players Proliferate in AME.”
“International and regional operators, in particular, have an advantage in being able to implement best practices learned overseas – MTN, for instance, which experienced growing competition in many of its markets, has maintained a strong position, for instance in Cote d’Ivoire, Ghana and Nigeria,” says McHenry.
At the end of July 2009, one of the first in-country mergers in the region took place in Sierra Leone. Market leader Africell agreed to buy Millicom (News - Alert)-owned operator Tigo for an undisclosed sum.
“We believe that this event may signal the start of a new trend, since several other operators look similarly vulnerable to acquisition,” says McHenry. “As a result, we believe in-country consolidation, as well as operators exiting markets, will be an increasingly common event over the coming five years,” she adds.
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users.
Narayan Bhat is a contributing editor for TMCnet. To read more of Narayan’s articles, please visit his columnist page.Edited by Erin Harrison
Internet Telephony Magazine
Click here to read latest issue
CUSTOMER 
Cloud Computing Magazine
Click here to read latest issue
IoT EVOLUTION MAGAZINE
