Executive SummaryLow fixed-line teledensity and Internet penetration and the explosive growth of mobile telephony (particularly prepaid) are the chief characteristics of the telecom markets in the Central and Eastern region of Africa.
Every country in this group now has an independent telecom regulator overseeing the further development of the sector.
The incumbent PTOs in several of the countries have been partially privatised with others to follow in the near future, including major markets such as Kenya.
Following in its footsteps, neighbouring Tanzania and Uganda will also introduce new competition frameworks in 2005, deregulating among other things the use of Voice over Internet Protocol (VoIP) telephony.The telecommunications sector in Cameroon has in the past few years undergone considerable transformations following the privatisation of the mobile subsidiary of the PTO, the award of a second mobile licence and the preparation for privatisation of Camtel.
While the fixed-line network is at a very low level of development with long waiting lists for connections, the country’s two mobile networks have experienced phenomenal growth since the introduction of competition in 2000.
Mobile subscribers now constitute more than 90% of all telephone lines in the country.
Despite full competition in the Internet sub-sector, it is still under-developed with penetration of less than 1%.
With the participation of foreign investors in the national operator after privatisation, network expansion and introduction of new services can be expected.The Democratic Republic of Congo, formerly Zaire, is a mineral-rich country that is recovering from civil strife and many years of pillage by its former leaders which has accounted for the low level of development of its telecommunications and other infrastructure.
While the traditional fixed-line network has deteriorated to almost non-existence, mobile telephony has experienced triple-digit growth figures almost every year since 2000.
There is also strong demand for Internet service which is hampered by the underdeveloped telecoms infrastructure.
Even though wireless technologies also serve as a fast replacement of the obsolete fixed network, national teledensity remains low and vast areas of this large country devoid of any telecommunications infrastructure.Ethiopia is one of the few African countries still practising a monopoly in its telecoms sector though with an independent regulator.
Total telephone line penetration remains very low.
However, the government is intent on privatising the national operator, ETC, and introducing competition in mobile and Internet services.
The mobile sector has been growing by 100% or more per annum in recent years, resulting in major infrastructure expansion efforts.
Several broadband initiatives launched during 2004 promise to bring the country closer to the information society.
ETC has budgeted a record amount for the financial year 2004/2005 for infrastructure improvements.2004 was a big year for Kenya’s telecom sector with Telkom’s monopoly in the fixed-line and international bandwidth sectors coming to an end, the licensing of a regional carrier, a third mobile operator and several new international data carriers.
The licensing of a Second National Operator (SNO) was aborted and may have to be repeated, but in the meantime a new competition framework has been introduced involving, among other things, the liberalisation of VoIP telephony.
These steps, along with the planned sale of a majority stake in the PTO in 2005 will change the telecoms landscape in Kenya dramatically.
Kenya has one of the largest Internet communities in Africa and is also among the fastest growing mobile markets in the region.
Yet, enormous further potential remains, with mobile and fixed-line penetration only at around 10% and 1%, respectively.Tanzania has a fully competitive mobile sector comprising four mobile operators while two fixed-line operators separately cover the mainland and the semi-autonomous island of Zanzibar.
Major advances occurred after 2000 when competition in the mobile sector was introduced and the incumbent PTO was partially privatised.
Mobile subscribers now outnumber fixed-lines by more than 11:1.
The country’s Internet market remains largely untapped owing to limited and poor fixed-line infrastructure.
However, following the end of the PTO’s monopoly on the mainland in 2005, more pervasive fixed-line services and data networks can be expected.
VoIP telephony will also be liberalised under the new competition framework in 2005, following in the footsteps of neighbouring Kenya.Once referred to as the Pearl of Africa, then devastated by civil war, peace and radical economic reforms have transformed Uganda into one of the fastest-growing economies on the continent.
The telecommunications sector has undergone major transformations after the entry of a SNO and the launch of a third mobile network in 2001.
Uganda was the first country on the continent where the number of mobile subscribers passed the number of fixed-line users, now at a ratio of more than 14:1.
Major initiatives have been launched to bring telecommunication services and the Internet to rural areas of the country, partly funded by the highly successful operators through a Universal Service Fund (USF).
A new competition framework is to be introduced in mid-2005 which will include the licensing of a third national operator and the liberalisation of VoIP telephony.