Viettel Burundi launches mobile services, claiming 600,000 subscribers
Burundi remains one of the most attractive African telecom markets for investors. The country has seen stable GDP growth for several years, while it enjoys a high population density. The relatively low, yet fast growing, mobile market penetration provides considerable potential in coming years. Nevertheless, investor reticence is still evident given the country's low economic output and the fact that outside the main urban areas fixed-line infrastructure remains poor. To overcome these difficulties, the government, supported by the Word Bank, has backed a joint venture with a number of prominent telcos to build a national fibre backbone network, offering onward connectivity to submarine cable infrastructure landings in Kenya and Tanzania. The first sections of this network were switched on in early 2014.
Since 2012 the country's access to international cables effectively ended its dependence on satellite connections, and has provided it with far more international bandwidth, and at lower prices for consumers.
Market limitations have delayed the launch of services among some players: in late 2012 two GSM licensees had their licenses withdrawn after having failed to launch services. Two of the remaining mobile operators have launched 3G mobile services to capitalise on the growing demand for internet services. The number of mobile subscribers has grown rapidly in recent years, with penetration approaching 40% by mid-2015. Nevertheless, this remains low by regional standards, suggesting considerable room for further growth. A new player, Viettel Group, which received a licence to provide mobile services in early 2014, launched 2G and 3G services in June 2015 and claimed to have signed up 600,000 subscribers within the first month. This placed the operator as the third largest in the country. Trading as Lumitel, Viettel aims to become the largest operator in Burundi, and to complement its mobile operations with fixed-line services. These developments, coupled with the relatively take-up of telecom services thus far, make Burundi is one of the most attractive growth markets in Africa, despite the limited size of the population.
The long-established plans to privatise the national telco Onatel (which also operates one of the mobile networks), have been delayed several times, but the government in mid-2013 again made efforts to kick-start the process.
Estimated market penetration rates in Burundi's telecoms sector end-2015 (e) Market | Penetration rate Mobile | 31% Fixed | 0.1% Internet | 5.7% (Source: BuddeComm based on various sources)
Viettel Group launches mobile services, trading as Lumitel; Africell's interconnection services suspended following failure to pay tax debt and licence renewal fees; Coup against President causing more social unrest; Huawei commissioned to build MAN infrastructure, funded by Chinese government grants; Continuing high growth rate in the low-penetration mobile market; Internet use developing strongly as the national backbone network increases connectivity; Further consolidation among mobile operators expected in the face of competition in a small market; Privatisation of national telco planned rekindled; Backbone network has some 1,000km of cabling completed; Viettel Group awarded a mobile licence, adding to competition in the sector when services are launched; Smart Telecom relaunches as Smart Burundi.