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The Future of African Mobile Profitability: Stupendous Value, Mobile Darwinism & The Next Phase of Growth

AfricaNext Investment Research, LLC
April 15, 2009
107 Pages - SKU: AFN2223025

Abstract Table of Contents Search inside this report Related Reports

Countries covered: Africa

African mobile operations have long been extremely profitable; stories abound of triple digit subscriber growth, seemingly boundless potential, and an overall environment in which operators need only build it and profits will come. If only things were that simple.

The reality is more complicated. Building on a comprehensive analysis of mobile operator performance in 40 African markets, the report reveals a market that “offers a remarkable blend of stupendous value creation alongside ostensibly misguided value destruction, can’t miss profit machines at the top versus volatile opportunities at the bottom, and pervasive premium valuations for what is increasingly a Darwinist, commodity business.”

In The Future of African Mobile Profitability, the AfricaNext research team goes beyond gaudy top line subscriber and revenue numbers, to provide in depth analysis of the drivers of African mobile profitability, including pricing and usage, OpEx, CapEx, EBITDA and free cash flows dynamics in an increasingly competitive environment and in the face of a severe economic downturn.

List Of Exhibits: Companies Mentioned In This Report; List Of Abbreviations
Executive Summary: All That Glitters Isn’t Gold: The Baseline - Solid Top Line Growth All Around; The Model: A Business In Transition - Commoditized Revenue, Tough Opex, High Capex Requirements; The Bottom Line: Great At The Top, Not So Good At The Bottom; The Players, Valuation And M&A: Inflation, Depression, Consolidation
Report Structure: Some Preliminary Observations; African Markets Are Not Created Equal: From Value To Volume Opportunities
Section I African Mobile Subscriber Review: 1.1 African Mobile Subscriber Base Growth: The Boom Is Not Over; 1.2 Mobile Subscriber Forecasts: How The 100% Penetration Barrier Will Be Smashed; 1.3 The African Business Model Paradigm: Build It And They Will Come - But Will They Stay?
Section II Arpu & Revenue Dynamics: 2.1 Outgoing Voice Revenue: The Path To Commoditization; 2.2 Interconnect Revenue: Will Trend Down; 2.3 From Sms To Mobile Data And Money Transfer - The Wildcard; 2.4 Top-line Revenue: A $44bn Business And A $65bn Target
Section III Opex: Looking For Low-cost Models: 3.1 Top Line Opex: Growing Faster Than Revenue; 3.2 Cost Of Sales: The Interconnect Challenge; 3.3 Operating Expenses: Few Places To Go But Up
Section IV Capex: Le Nerf De La Guerre: 4.1 Capex: The Price To Play; 4.2 Capex Drivers: Nigeria, Capacity, Transmission; 4.3 The Capex Difference: Correlation To Market Share And Revenue; 4.4 The Capex Impact Of The Credit Crunch
Section V The State Of African Mobile Profitability & The Future Of The Model: 5.1 State Of Profitability - A Top Heavy Ebitda Market; 5.2 The Drivers Of African Mobile Profitability - And What Will Happen To Them; 5.3 Can African Markets Support 4+ Operators?; 5.4 How Will The 2009 Credit Crunch Change The Operating Landscape?; 5.5 The Next Business Model: Convergence Vs. Bottom Of Pyramid Models
Section VI African M&A Context & Valuations: From Inflation To Depression?: 6.1 License Valuations; 6.2 Global Recession Effect On License Valuations; 6.3 A Depression In Mobile Operator Valuations: Going Too Hard The Other Way?; 6.4 Breaking Down M&A Catalysts For 2009
Section VII Sizing Up Pan-african Players: From Mtn And Zain To Warid And Sudatel: 7.1 The Weight Of The Pan-african Player; 7.2 Late Entrant Pan-african Players - The Case For (And Against) Warid, Sudatel Or Lap Green Networks; 7.3 Late Entrant Pan-african Review

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The Future of African Mobile Profitability: Stupendous Value, Mobile Darwinism & The Next Phase of Growth

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