Fibre-Optic Cables Will Drive the Fixed-Line Telecoms in Sub-Saharan Africa, Says Frost & Sullivan

CAPE TOWN, South Africa, May 24, 2010 - Sub-Saharan Africa has the lowest fixed-line penetration rate in the
world. Incumbent operators mainly attribute this to low investments in
copper-wire network infrastructure in the past. However, a series of
fibre-optic cables that are being placed along the east and west coasts of
the continent are expected to give a second life to fixed-line
telecommunications and cater to the rising demand for data and broadband
Internet services.

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New analysis from Frost & Sullivan
(www.ipcommunications.frost.com), Survival Strategies for Fixed-line
Telecommunications Operators in Sub-Saharan Africa, finds that the market
earned revenues of $6.78 billion in 2008 and estimates this to reach $12.25
billion in 2015. The fixed-line technologies covered in this research include
copper-wire network, fibre-optic network, dial-up, asymmetric digital
subscriber line (ADSL), integrated serial digital network (ISDN), worldwide
interoperability for microwave access (WiMAX), code division multiple access
(CDMA) and multi-protocol label switching (MPLS).

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 growth drivers for wire-line telecommunications are the
increasing demand for data and Internet services, cost-effective deployment
of fixed-wireless technologies, and the introduction of fibre-optic cables,"
says Frost & Sullivan Research Analyst Jiaqi Sun. "Corporate customers are
the major revenue contributor for fixed-line services, particularly data and
Internet services and fixed-wireless technologies."

Fixed-wireless technologies such as WiMAX and CDMA have overcome the
requirements of capital-intensive copper-wire infrastructure investments to
achieve less time-to-market of new services. Additionally, fibre-optic cables
will reduce costs and increase the bandwidth capacity of Internet services in
the next three to five years.

"Corporate customers continue to prefer superior fixed-line to mobile
services," Sun notes. "Traditional fixed-line operators are in the process of
deregulating and migrating to fixed and/or fixed-wireless technologies."

He expects that the combination of fixed-line strength with innovative
mobile offerings will help to retain existing customers as well as attract
new ones. In addition, data and Internet services will be the future revenue
generators for fixed-line telecommunications.

However, the dearth of reliable power supply is hampering network
performance. Furthermore, high incremental costs of fixed-line infrastructure
are inhibiting network rollout and market monopoly is restraining
competition.

"The lack of physical infrastructure such as power generation plants in
sub-Saharan Africa limits the expansion of wire-line networks," explains Sun.
"Conventional fixed-line telecommunications also relies on expensive
copper-wire lines. Fixed-line operators find it difficult to improve the
quality of services as there is a lack of private investments to fund the
infrastructure rollouts."

In addition, the majority stakes of incumbent operators are still
controlled by national governments in sub-Saharan African countries.
Therefore, the slow progress in deregulation of national incumbents restricts
the growth of fixed-line telecommunications, because governments have a
limited funding for the development of the capital-intensive fixed-line
network infrastructure.

Frost & Sullivan believes that traditional incumbent operators should
gradually migrate to fixed-wireless and/or mobile technologies to diversify
their service portfolios.

"Combining the quality of fixed-line services with the mobility of
wireless ones will give fixed-line operators a competitive edge to increase
customer loyalty and consequently service uptake," concludes Sun. "It is
imperative for fixed-line operators to enhance the quality of customer
services, which will help retain existing customers and attract new ones."

Survival Strategies for Fixed-line Telecommunications Operators in
Sub-Saharan Africa is part of the Communications Services Growth Partnership
Services programme, which also includes research in the following markets:
Kenya Carrier Ethernet Market, Mozambique Broadband Market, West Africa and
East Africa Carrier Ethernet Market, Sub-Saharan Africa CDMA Market, and
African Transponder Demand Outlook. All research services included in
subscriptions provide detailed market opportunities and industry trends that
have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

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Survival Strategies for Fixed-line Telecommunications Operators in
Sub-Saharan Africa

M514

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

www.frost.com

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