The Telecommunications Cluster
Background
Africa has the world’s fastest-growing telecommunications industry. Between 2002 and 2007, the African telecoms sector grew by 49.3% followed by Asia at 27.4%.
Driven largely by the paucity of fixed-line infrastructure, Africa’s mobile phone subscription growth rate is the highest in the world at 41% between 2007 and 2008. Cellular phones account for approximately 90% of total telephone subscription in Africa.
However, despite substantial investments and growth in its telecoms sector in the last decade, Africa remains largely underserved, with the bulk of the continent’s population still lacking access to basic communications services.
According to the World Cellular Information Service (WCIS) and the International Telecommunication Union (ITU), mobile service penetration in Africa was still a relatively paltry 31.8%, while fixed line penetration stood at 3.5%. Broadband penetration is .2%, prompting AfricaNext Investment Research to project Africa’s broadband market to grow more than fourfold from 2.7 million users in 2007 to 12.7 million in 2012.
This abundance of potential customers makes Africa’s telecoms sector a major attraction to investors, with international heavyweights Vodacom, Vodafone, France Telecom and Portugal Telecom already operating in the continent, rapidly filling this vacuum.
However, as the competition for new customers shifts from urban to low-cost markets in rural Africa, investors’ profit margins are getting slimmer, placing them under increasing pressure to better control the astronomical costs of doing business in Africa. Many of these costs are associated with overexposure to political, economic, security and social risks, including the vandalism of infrastructure, expropriations and a sometimes discriminative regulatory environment.
About the B&M Telecommunications Cluster
The B&M Telecommunications Cluster is a highly specialized research group that provides clients with timely analysis on political, economic, security and social developments affecting the telecoms sector in Africa, and forecasts the impact of these developments on a client’s bottom-line.
The Applications for Business and Investment
Telecommunications Cluster analysts help clients incorporate political risk management into their plans for investing in Africa, especially at the point of entry and expansion.
Our flexible research model and pioneering AfriRisk Index©, the first comparative country risk index modeled to monitor, measure, and forecast political, economic, social, and security risks unique to Africa, can be adapted to track categories of risks prevalent in the telecoms sector in Africa and pertinent to a client’s investment plans, including the risk of expropriation and vandalism.
For example, B&M currently monitors and forecasts risks threatening the multiple municipalities, provinces, states, countries, regions, and sectors represented in a renowned Fund consisting 50 securities of African companies, including several in the telecoms sector.
For more information, please contact the B&M Telecommunications Cluster directly at telecoms@bmconsultancy.net
Telecommunications Cluster Analysts
Our analysts are experts on the telecoms sector, as well as on general African politics, history and business, possessing the requisite multinational language skills.
They monitor all developments affecting the telecoms sector in Africa, including those occurring within and outside of the continent.
The cluster is supported by field research analysts and on-the-ground monitors based in several key producing countries, strategically positioned to help our clients navigate and manage the day-to-day political, security and social risks of doing business on the ground in Africa.
The Space
B&M’s Telecommunications Cluster conducts its research on a continental, sub-regional, national, provincial, municipal, and industry level.
It covers any combination of African cities, states, countries, and regions pertinent to a client’s business plans.
Our analysts work in close collaboration with B&M’s regional and geographic research groups to provide clients with insightful comparative analysis of the telecoms sector across multiple regions.
Sectors Covered
Telecommunications
Coverage Area
B&M’s Telecommunications Cluster measures and forecasts risk in any combination of African cities, states, countries, and regions pertinent to a client’s business plans.
Common Research Topics
Assessing the specific political, economic, social and security risks associated with telecoms companies increasingly penetrating rural areas in Africa.
Will the global financial crisis lead to a surge of nationalizations and expropriations in the telecoms sector?
For more information, please contact the B&M Telecommunications Cluster directly at telecoms@bmconsultancy.net |
