Africa Telcom News has released a free report, called the African Mobile Factbook, that gives all of the major numbers on subscribers, penetration rates, profitability and growth potential for every African carrier and country. As anyone who is tries to do research in this space knows, it can be difficult to get some of these mobile phone statistics for Africa, so this is a welcome source for information.

Interesting Facts

  • Nigeria, South Africa and Egypt are the fastest growing markets
  • Africa has become the fastest growing mobile market in the world with mobile penetration in the region ranging from 100% to 30%
  • Pre-paid subscriptions account for nearly 95 percent of total mobile subscriptions in the region
  • Most of the mobile operators are home-grown. In 2005, the continent’s seven largest investors controlled 53% of the African mobile market
  • Across most of Africa, SMS is likely to be the only non-voice value-added service to gain mass market popularity in the immediate future
  • East Africans pay taxes of between 25% and 30% on mobile phone services, compared with an average of 17% across Africa
  • African states with less than 600,000 subscribers and includes Burundi, Cape Verde, Central African Republic, Comoros (Union of the), Djibouti, Equitorial Guinea, Eritrea, Gambia (The), Lesotho, Liberia, Mayotte, Sao Tome and Principe, Seychelles, Somalia, Swaziland and Rwanda.

Subscriber Numbers and Penetration Rates

At the end of 2007 there were 280.7 million mobile phone subscribers in Africa, representing a penetration rate of 30.4%. The chart below shows the historical numbers up until 2007, with projected growth and penetration rates through 2012.

Even more interesting, when you look at the major African markets, is to see the huge growth potential for areas that are already very profitable. As can be seen Nigeria, Kenya and Egypt have the greatest growth potential.

Africa’s Mobile Phone Operators (carriers)

There are (or will be) a staggering 11 mobile phone operators in Nigeria, with 4 in Kenya and South Africa, and 3 in egypt and Morocco.

“MTN dominates the African market with over 73.9 million subscribers in the region as of 4Q 2007 followed by Vodacom (33.4 million), Orascom (32.4 million), Zain (30.6 million) and Orange (27.7 million), respectively.”

Size doesn’t mean everything though, Millicom has the highest growth in revenues, and Orascom has the highest EBITDA margin, primarily due to its strategy of investing in the emerging mobile markets.

The chart below shows five of the leading mobile network operators in Africa in terms of their subscriber base (size of the bubble), revenue growth rate and EBITDA margin for the latest completed financial year.

In Summary

The growth rate in Africa over the last couple of years has been phenomenal, and will likely continue for the next 3-5 years. Major drivers of increased growth include:

  • Subsidization of handsets
  • Pre-paid offerings
  • Continued liberalization of the telcom sector
  • Low penetration rates
  • Expected uptake of 3G services

Growth inhibitors include:

  • Taxation – especially in East Africa
  • Low income across the continent hampers growth
  • Widespread illiteracy decreases the growth of value added services, even SMS
  • Unreliable electricity supplies
  • Corruption

I’m curious to see the uptake of both data services (3G and EDGE) as well as the increased number of low-cost handsets. Just yesterday I read a report of a Malaysian company setting up a mobile phone manufacturing plant in Mozambique, so there very well might be some super low-end phones available soon.