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Mobile Communications is Booming in Africa

Africa is the fastest-growing region in the global mobile phone services market. Cellular connections passed 200 million in the first quarter of 2007 to reach a penetration rate of around 21 percent, reveals Wireless Intelligence -- the joint venture between Ovum and the GSM Association.

"Strong opportunities for growth are expected in the various sub-regions of Africa -- although the Southern region is showing signs of maturity" says Joss Gillet, Senior Analyst at Wireless Intelligence. Orascom, Millicom, Celtel, MTN and Vodacom are competing strongly in such markets, where network coverage and regulation remain challenging.

In 2006, a market growth of 45 percent positioned Africa as the fastest-growing region, ahead of the Middle East (30 percent) and Asia-Pacific (28 percent). The growth in cellular connections is being driven mainly by the deployment of GSM networks and changes in market dynamics in terms of regulation and politics. In 2007, they expect market growth to be just below 30 percent year-on-year.

Algeria is by far the biggest market in Northern Africa, with over 20 million connections at the end of 2006. "Sudan, Egypt and Morocco are expected to be the fastest-growing markets in the sub-region, with annual growth rates above 35 percent," says Gillet.

In early 2006, Western Africa overtook Southern Africa in terms of number of connections; the markets in the Southern part have a higher penetration rate (73 percent). In contrast, the average market penetration in Western Africa is around 25 percent and should reach 30 percent by the end of the year.

Amongst the markets to watch in 2007 are Uganda, Kenya, Tanzania, Mozambique and Zambia. These markets represent 78 percent of total connections in Eastern Africa and are set to grow by 31 percent (weighted average) between 2006 and 2007 to reach a total of 24 million connections.

Finally, South Africa represents 94 percent of the installed base in Southern Africa, with a penetration rate of around 75 percent in 2006. "Although MTN grew its subscriber base at almost the same rate as Vodacom (24 percent) last year, Vodacom has 58 percent of the market and more than 20 million subscribers," concludes Gillet.

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