Low 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 has an independent telecom regulator overseeing the further development of the sector. Several key countries in the region have privatised their incumbent telcos, liberalised the use of VoIP Internet telephony and are implementing new competition frameworks, with others to follow in the near future. Advanced technologies and services are being rolled out, promising the long-awaited cost reduction and improved availability of telecommunications.
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 and fixed-line licence and the preparation for privatisation of Camtel which is now scheduled for 2006. Mobile penetration has increased dramatically from 0.02% in 1999 to over 12% in 2005. With the participation of foreign investors in the national operator after privatisation, network expansion and introduction of new services can be expected. Despite full competition in the Internet sub-sector, it is still under-developed with a user penetration of around 1%. The government is committed to the development of the sector and is instituting measures to invite greater participation and investment.
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, from less than 8,000 subscribers in 1996 to almost three million towards the end of 2005. Wireless technologies also serve as a replacement of the obsolete fixed network infrastructure and public payphones. National teledensity remains extremely low, creating enormous potential for the provision of basic services. There is also strong demand for Internet service which is hampered by the underdeveloped telecoms infrastructure.
Ethiopia still practices a monopoly in almost all segments of its telecoms sector. Total telephone line penetration remains very low. However, the government is intent on privatising the national operator, Ethiopian Telecommunications Corporation, and introducing competition in mobile and Internet services. The mobile sector has been growing by 100% or more per annum in recent years, taking the network to its capacity limits and resulting in major infrastructure expansion efforts. Massive broadband initiatives launched during 2004 and 2005 aim at bringing the country closer to the information society and enabling it to leapfrog to a Next-Generation Network. The national operator, ETC, has budgeted a record amount for the financial year 2005/2006 for infrastructure improvements.
2005 has been a year of uncertainty for Kenya’s telecommunications market, but the path of liberalisation taken by the country’s regulator seems irreversible. The planned privatisation of a majority stake in Telkom Kenya has been postponed to 2006, and the validity of the country’s third mobile licence is still uncertain. At the same time, however, Telkom’s monopoly in the provision of Internet backbone and international bandwidth services broken, immediately leading to massive price reductions and better services in these sectors. ADSL and wireless broadband technologies have been introduced, and VoIP Internet telephony has been liberalised. A WiMAX network is being rolled out with the aim of providing converged voice, data and video/broadband TV (triple-play) services. Even though mobile phones already outnumber fixed lines by around 20:1, the introduction of mobile number portability and the permission for mobile networks to operate their own international gateways from 2006 are expected to give further impetus to the market. Enormous further potential remains, with mobile and fixed-line penetration only at around 15% and 1%, respectively.
Tanzania has a fully competitive mobile sector comprising four networks, and two fixed-line operators. The country’s Internet market remains largely untapped owing to limited fixed-line infrastructure. However, following the partial privatisation of the incumbent telco and the end of its monopoly in 2005, more pervasive fixed-line and Internet services can be expected, mainly driven by wireless systems. VoIP Internet telephony was liberalised under a new competition framework in 2005 and ADSL broadband services were introduced. A new submarine fibre optic cable to be launched in 2006 will dramatically improve Tanzania’s international connectivity while the country’s utility companies are preparing to sell capacity on their fibre networks.
The entry of a Second National Operator (SNO) and three mobile networks has revolutionised Uganda’s telecoms sector. All market segments are experiencing strong growth, while total teledensity is still low at less than 7%. Advanced services including ISDN, ADSL, GPRS and wireless broadband access are being offered. 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 has been announced which will include the liberalisation of Voice over Internet Protocol (VoIP) telephony, the licensing of a third national operator, and a fourth mobile operator to operate a Third Generation (3G) mobile network.
This report provides information on Cameroon, Democratic Republic of Congo, Ethiopia, Kenya, Tanzania, and Uganda. Each country has its own chapter and covers the following subjects.