Monday, May 03, 2004
Business is a big focus at the ITU’s Cairo telecoms conference.
CAIRO: Monday, 3rd May. 2004
By Guy Berger
Highway Africa News Agency
Telecoms companies are out in force at the “Africa Telecom 2004” exhibition and forum in Cairo, and their businesses form a key part of the proceedings.
More than 200 groups are exhibiting their wares at the event, convened by the International Telecommunications Union (ITU), in a context where telecoms – especially mobile – are booming on the continent.
Says the ITU: “The challenge for Africa is to sustain its dizzying mobile growth”. It adds that some people think that existing business models will easily sustain the addition of another 250 million cellphone users to the existing 50 million over the next five years.
However, it suggests that cheaper prices and wider coverage may be needed if the market is to grow any further.
Citing the successful example of Morocco, it says that in one year, the number of cellphone users rocketed from 400 000 to 3 million, because of a wide choice of pricing models, including one where users can buy airtime in amounts that allow for just a few minutes of conversation.
Four out of five African users use prepaid services. A concern, however, is that the average revenue per customer remains low.
Another area for growth is in providing information services in addition to voice telephony on mobile platforms. The ITU recognises that “on average, content services contribute less than five percent to an operator’s total average revenue.” But it argues that services like SMS still get consumers accustomed to non-voice services and pave the way for greater use in the future.
The ITU says that it “helps pave the way for investment,” by sharing information about opportunities and companies involved in telecoms. An event like this in Cairo also brings together arch-rivals in business such as the heads of Vodacom and Econet Wireless which have been at war with each other over business in Nigeria. Vodacom’s Allan Knott-Craig, and Econet’s Strive Masiya, fierce competitors in various African markets, are sharing a platform later in the week.
High on the business agenda of the conference is competition. The ITU
points out that almost two of every five African parastatal telecoms companies have now been privatised to one extent or another. And four in ten countries have also opened up for competition – mainly in the mobile telephone arena.
The ITU says that those countries lagging behind on the continent are the ones that do not have competition. It gives the example of the Democratic Republic of Congo (DRC), and Ethiopia.
The two countries have similar per capita incomes. Yet, the DRC has 15 times greater use of cellphones in terms of its population. Says the ITU: “The difference? Whilst Ethiopia has only 1 GSM operator, the DRC has 3 GSM networks…”.
A tiny fraction of Ethiopians use cellphones – about one in 10 000 people. This contrasts with Morocco where it is one in five people, and South Africa which is approaching three in every ten.
According to the ITU, Africa growth in telecoms is predicted at 17% during 2004.
Regulation of the industry is also under the spotlight at the Cairo summit. The ITU argues that regulators need to encourage “competition-friendly policies such as keeping licence fees to a minimum, and that any lack of transparencies in the business climate are addressed.”
It points out that in just over ten years, the number of African countries with licensing and regulatory bodies for telecoms has risen from five to 40. This enables specialised attention to be given to the development of telecoms in these countries.
One area where regulators are urged to act is in making rural roll-out more attractive to telecoms companies. This would be by “including – and enforcing – higher rollout obligations for new market entrances, or by providing incentives …”
Regulators should also encourage operators to share infrastructure to keep their costs down, says the ITU.
Highway Africa reports from Cairo are made possible with support from the Swiss Agency for Development and Cooperation. Editorial decisions are solely the responsibility of Highway Africa.
CAIRO: Monday, 3rd May. 2004
By Guy Berger
Highway Africa News Agency
Telecoms companies are out in force at the “Africa Telecom 2004” exhibition and forum in Cairo, and their businesses form a key part of the proceedings.
More than 200 groups are exhibiting their wares at the event, convened by the International Telecommunications Union (ITU), in a context where telecoms – especially mobile – are booming on the continent.
Says the ITU: “The challenge for Africa is to sustain its dizzying mobile growth”. It adds that some people think that existing business models will easily sustain the addition of another 250 million cellphone users to the existing 50 million over the next five years.
However, it suggests that cheaper prices and wider coverage may be needed if the market is to grow any further.
Citing the successful example of Morocco, it says that in one year, the number of cellphone users rocketed from 400 000 to 3 million, because of a wide choice of pricing models, including one where users can buy airtime in amounts that allow for just a few minutes of conversation.
Four out of five African users use prepaid services. A concern, however, is that the average revenue per customer remains low.
Another area for growth is in providing information services in addition to voice telephony on mobile platforms. The ITU recognises that “on average, content services contribute less than five percent to an operator’s total average revenue.” But it argues that services like SMS still get consumers accustomed to non-voice services and pave the way for greater use in the future.
The ITU says that it “helps pave the way for investment,” by sharing information about opportunities and companies involved in telecoms. An event like this in Cairo also brings together arch-rivals in business such as the heads of Vodacom and Econet Wireless which have been at war with each other over business in Nigeria. Vodacom’s Allan Knott-Craig, and Econet’s Strive Masiya, fierce competitors in various African markets, are sharing a platform later in the week.
High on the business agenda of the conference is competition. The ITU
points out that almost two of every five African parastatal telecoms companies have now been privatised to one extent or another. And four in ten countries have also opened up for competition – mainly in the mobile telephone arena.
The ITU says that those countries lagging behind on the continent are the ones that do not have competition. It gives the example of the Democratic Republic of Congo (DRC), and Ethiopia.
The two countries have similar per capita incomes. Yet, the DRC has 15 times greater use of cellphones in terms of its population. Says the ITU: “The difference? Whilst Ethiopia has only 1 GSM operator, the DRC has 3 GSM networks…”.
A tiny fraction of Ethiopians use cellphones – about one in 10 000 people. This contrasts with Morocco where it is one in five people, and South Africa which is approaching three in every ten.
According to the ITU, Africa growth in telecoms is predicted at 17% during 2004.
Regulation of the industry is also under the spotlight at the Cairo summit. The ITU argues that regulators need to encourage “competition-friendly policies such as keeping licence fees to a minimum, and that any lack of transparencies in the business climate are addressed.”
It points out that in just over ten years, the number of African countries with licensing and regulatory bodies for telecoms has risen from five to 40. This enables specialised attention to be given to the development of telecoms in these countries.
One area where regulators are urged to act is in making rural roll-out more attractive to telecoms companies. This would be by “including – and enforcing – higher rollout obligations for new market entrances, or by providing incentives …”
Regulators should also encourage operators to share infrastructure to keep their costs down, says the ITU.
Highway Africa reports from Cairo are made possible with support from the Swiss Agency for Development and Cooperation. Editorial decisions are solely the responsibility of Highway Africa.
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