Cheaper Handsets and Network Investments Boost East African Mobile Market, Finds Frost & Sullivan

CAPE TOWN, South Africa, January 14 - The mobile communications markets of Kenya, Tanzania, Uganda and Rwanda
are in their growth stages. In 2008, Kenya enjoyed the highest number of
active subscribers and revenues among the four countries. Tanzania, Uganda
and Rwanda are however likely to witness significant growth over the next
seven years due to increasing network investments, continuing product
innovation and reduced handset costs.

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New analysis from Frost & Sullivan (www.wireless.frost.com), East
African Mobile Communications Markets, finds that the market earned revenues
of US$2.62 billion in 2008, and estimates this to reach US$8.99 billion in
2015. The technologies covered in this study are code division multiple
access (CDMA), global system for mobile communications (GSM), general packet
radio service (GPRS), high-speed downlink packet access (HSDPA) and wideband
code division multiple access (WCDMA).

If you are interested in more information on this study, please send an
e-mail to Patrick Cairns, Corporate Communications, at
patrick.cairns@frost.com, with your full name, company name, title, telephone
number, company e-mail address, company website, city, state and country.

"The key drivers in these markets include strong gross domestic product
(GDP) growth rates, increasing demand for mobile money transfer services and
declining handset costs," says Frost & Sullivan Research Analyst Jiaqi Sun.
"East African consumers are spending more on mobile communications due to the
low fixed-line network coverage, underdeveloped banking systems, and the
current limited availability of inexpensive handsets."

Currently, there are 37.6 million mobile subscribers in east Africa, at a
penetration rate of 30.8 per cent. The total number of subscribers is
expected to reach 99.5 million in 2015, at a compound annual growth rate
(CAGR) of 14.9 per cent.

"The launching of undersea cables is anticipated to reduce the cost of
telecommunications by 60.0 per cent over the next 7 years," says Sun. "This
will boost the demand for mobile Internet access."

However, there are challenges faced by the market participants such as
high tax rates on mobile services, the lack of network rollout in rural areas
and the current low demand for data services. Additionally, the demand for
data services from corporate clients has dwindled due to the economic
downturn.

"Frost & Sullivan expects mobile network operators to enhance their
services by continuously investing in infrastructure like call-switching
capacity," Sun says. "This will help in developing innovative solutions like
mobile money transfer services, and initiate managed services by outsourcing
non-core businesses like network maintenances. These strategies will step-up
the demand for mobile services, boosting subscriber and revenue growth."

East African Mobile Communications Markets is part of the Mobile &
Wireless Growth Partnership Services programme, which also includes research
in the following markets: Southern African Mobile Communications Market, West
African Mobile Communications Market, Central African Mobile Communications
Market, and Mozambican Mobile Communications Market. All research services
included in subscriptions provide detailed market opportunities and industry
trends that have been evaluated following extensive interviews with market
participants.

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    East African Mobile Communications Markets
    M48D

    Contact:
    Patrick Cairns
    Corporate Communications
    P: +27-18-464-2402
    E: patrick.cairns@frost.com

Patrick Cairns, Corporate Communications of Frost & Sullivan, +27-18-464-2402, patrick.cairns at frost.com