Frost & Sullivan: Increasing Competition Boosts the West African Mobile Communications Market

CAPE TOWN, South Africa, June 21, 2010 - West Africa is one of the most dynamic regions in sub-Saharan Africa. The
region's telecommunications markets are increasingly opening up to
competition and therefore experiencing significant growth.

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"This has been driven by the operators' network plans that have made
mobile services available to a greater number of people," explains Frost &
Sullivan ICT Programme Manager Birgitta Cederstrom. "The limited presence of
fixed-line infrastructure has also created a favourable environment for
mobile operators to thrive."

New analysis from Frost & Sullivan (www.wireless.frost.com), West
African Mobile Communications Market, finds that the market earned revenues
of US$12.0 billion in 2008 and estimates this to reach US$22.6 billion in
2015, growing at a compound annual growth rate (CAGR) of 9.4 per cent. The
technologies covered in this research are 2G (CDMA/TDMA/GSM), 2.5G (GPRS), 3G
(CDMA 2000/WCDMA), and 4G (fully IP-based integrated system).

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.

"Fixed-line penetration in West Africa is considerably low at an average
of about 2.0 per cent across the region," Cederstrom says. "This is because
fixed-line communications services are usually provided through a
government-owned incumbent, where the services tend to be limited, of poor
quality, and unreliable. Mobile communications services are an attractive
alternative and offer a wider range of options and services."

Liberalisation policies and favourable regulatory conditions have
encouraged the entry of new mobile operators with an extensive offering of
products and services, targeted at different market segments.

However, the West African region is characterised by abject poverty and
low disposable incomes, particularly in the rural areas. Hence, there is an
increasing need for low-cost communication services. Further, the average
revenue per user (ARPU) has been declining year-on-year due to price-based
competition. Mobile operators face the challenge of finding alternative means
of differentiating themselves in such a fiercely competitive environment.

"In the midst of the global economic downturn, subscribers reduced
spending on basic communication services," explains Cederstrom. "This exerted
downward pressure on mobile market revenues as well as profit margins,
thereby slackening the market growth."

The introduction of unified licensing regimes or global licenses
operators has paved the way for operators to provide converged services. The
emergence of advanced IP technology enables the provision of data, voice,
broadcasting, fixed, and mobile services over one network and creates
opportunities for bundled service offerings. Consequently, operators are
expanding their product portfolios and gradually positioning themselves as
converged services providers, more in order to offset the decline in voice
airtime sales, which has historically constituted the bulk of their revenues.

"Operators are mitigating the decline in voice revenues due to price
based competition by providing diversified product portfolios," concludes
Cederstrom. "Additionally, they should provide value-added service offerings
targeted at different market segments to spur further growth."

West African Mobile Communications Market is part of the Mobile &
Wireless Growth Partnership Services programme, which also includes research
in the following markets: East African Mobile Communications Market, Analysis
of selected Central African Mobile Communications Markets, Southern African
Mobile Communications Market, and West African Broadband 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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West African Mobile Communications Market

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    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