Mobile communications markets in the Democratic Republic of the Congo (DRC) and Ethiopia face challenges due to lack of competition, poor economic conditions and limited infrastructure availability, says a new report from Frost & Sullivan.Additionally, mobile operators in these markets are largely focusing on subscriber acquisition and network expansion for voice services. This causes delay in the rollout of advanced networks such as Long Term Evolution (LTE) compared to other developed market, the report said.The two markets earned revenues of $1.78 billion in 2013 which is expected to reach $3.27 billion by 2018, says a new report from Frost & Sullivan.
While population densities of both countries are among the highest in Sub-Saharan Africa, their active mobile penetration rates in 2013 were 36.4 percent and 24.1 percent respectively, well below Sub-Saharan Africa’s average of 61 percent, the research said.
The markets will see substantial growth in the next three to five years, mainly driven by the growing infrastructure investment in the region.
Data services and mobile money solutions are the key drivers of the market. Data revenue will be driven by the proliferation of low-cost mobile devices and the growing popularity of social media platforms. Mobile money will gain prominence as the number of Ethiopia and DRC’s unbanked populations have prompted their respective governments to place financial inclusion at the forefront of their socio-economic plans.
“While voice is still by far the dominant contributor to service revenue, data services and mobile money solutions are expected to fuel growth in the long term,” said Frost & Sullivan Information & Communication Technologies Research Analyst Lehlohonolo Mokenela.
Frost & Sullivan also finds that the growth of Ethiopia’s mobile communications market has been mostly been limited by a lack of competition; state-owned Ethio Telecoms is still the only provider in the market owing to tight regulatory protection.
Upon the completion of the country’s Growth and Transformation Plan (GTP), it is expected that the regulator will gradually open the market to competitors, Mokenela added.
In order to grow customer base in rural areas, mobile operators need to consider cost-effective network expansion strategies in the DRC, added Mokenela. “Leveraging infrastructure-sharing models and using hybrid base stations can help operators lower their operational site costs and mitigate the country’s intermittent electricity supply.”
picture source: cnn