Mobile in Southern Africa region

Mobile cellular communications in the Southern African region:Universal access considerations : 

Mobile cellular communications in the Southern African region:Universal access considerations Michael Minges, ITU minges@itu.int The views expressed are those of the author and may not necessarily reflect the opinions of the ITU or its Members. Workshop on Telecommunication Reform Gaborone, Botswana 3-5 May 1999

Topics : 

2 Topics Mobile cellular trends in Southern Africa region Regulatory issues related to mobile cellular

Mobile cellular in the SADC region : 

3 Source: RTR (http://rtr.worldweb.net). Mobile cellular in the SADC region Status Growth Substitution Strategic investment Pre-paid Roaming Southern African Development Community

SADC Mobile Cellular Status : 

4 Mobile cellular start-up SADC countries Angola Feb. 94 Namibia April 95 Botswana June 98 South Africa June 94 Zambia Aug.95 Tanzania Sep. 94 Zim- babwe Sep.96 Malawi Dec. 95 Swazi- land Nov.98 Lesotho May 96 Mauritius May 89 Mozam- bique Nov.97 Source: ITU. SADC Mobile Cellular Status Mobile cellular fairly recent to region All SADC countries now have mobile cellular All except one have GSM Penetration

Mobile growth : 

5 Mobile growth Over 100% growth (excluding South Africa) Almost as many new mobile as fixed subscribers in 1998 Penetration doubling every year Source: ITU.

Substitution : 

6 * Excluding South Africa. Source:ITU. Substitution Mobile cellular quick to implement; less prone to vandalism Low connection fee (compared to fixed); generally little wait for service Mobile functionality advantages

Strategic foreign investors : 

7 Strategic foreign investors Mobile Foreign Country Operator Investor Stake Botswana Vista France Télécom 51% Botswana Mascom Portugal Telecom 49% Lesotho VCL Vodacom (South Africa) 51% Malawi TNM Telekom Malaysia 60% Mauritius Emtel Millicom (Luxembourg) 50% Mozambique TMM Deutsche Telekom 26% Namibia MTC Telia (Sweden) 26% South Africa Vodacom Vodafone 32% Swaziland Swazi MTN MTN (South Africa) 31% Tanzania MIC Millicom (Luxembourg) 57% Tanzania TriTel TRI (Malaysia) 60% Zambia Zamcell Telecel (USA) 70% Zimbabwe Telecel Telecel (USA) 40% Source: ITU.

Prepaid : 

8 Source: Vodafone. Prepaid Provides access to those who might not normally qualify Accounts for majority of new subscriptions in many networks around the world

Roaming : 

9 Roaming Extra revenue source Can help spur regional integration Not yet widely implemented “For countries like Lesotho, roaming makes up much of the total revenue”—Vodacom

Regulatory issues for mobile cellular : 

10 Regulatory issues for mobile cellular Market structure Licensing Universal access obligations Pricing Consumer issues

Market participants & competition : 

11 Market participants & competition Private sector participation All SADC countries except one Competition 6 SADC countries Cellular market structure SADC countries Angola Namibia Botswana South Africa Zambia Tanzania Zim- babwe Malawi Lesotho Mauritius ? ? ? ? ? ? ? ? ? ? ? ? Source: ITU. Swazi- land ? Number of mobile operators Mozam- bique

Strive Masiyiwa:Cellular folk hero : 

12 Strive Masiyiwa:Cellular folk hero Fought 4 years for cellular license in Zimbabwe Finally launched ECONET in June 1998 Part-owner of new Botswana cellular network “We aim to provide telecommunications to all the peoples of Zimbabwe”

Mobile cellular licenses : 

13 Mobile cellular licenses How many How many operators can market bear? How long Time period of license How much License fees will be passed on to consumers How about Coverage obligations Technology Scope “[License fee] is small because we wish to lower the cost of entry, so as to facilitate affordable tariffs” —SATRA

Universal access obligations: coverage : 

14 Universal access obligations: coverage Outside of South Africa, coverage typically limited to major towns Licenses should be linked to population and territorial coverage targets Global mobile satellites may help

Universal accessobligations: payphones : 

15 Universal accessobligations: payphones SADC mobile operators have had few if any universal access obligations Exception is South Africa where they had to install 30’000 cellular payphones in 5 years Source: ITU adapted from Vodacom, MTN.

Tariffs : 

16 Tariffs Still high relative to fixed and compared to other regions Significant regional variation Biggest barrier to mobile access Reasons why “High retention” Interconnect charges Handset & service provider subsidies Source: ITU adapted from published operator tariffs.

Tariffs & competition : 

17 Tariffs & competition Competition can help to lower tariffs Source: Net*ONE (Zimbabwe).

Handsets : 

18 Handsets Factors affecting handset prices: Custom duties Distribution policy Subsidies Minimum prices range from zero (bundled with subscription package) to US$ 400

Affordability : 

19 Affordability With current tariffs, mobile subscriber penetration in SADC (excluding South Africa) will rise over next 5 years to around 1% With best practice tariffs, mobile density can rise to 4.4% Source: ITU.

Other consumer issues : 

20 Other consumer issues Calling Party Pays Mobile Number Portability Quality of Service © MACH

Conclusions : 

21 Conclusions Mobile cellular enhances access to communications Must not be viewed as service for privileged Requires regulatory encouragement to extend access to all ©ITU / A. de Ferron

Slide 22: 

“Mobile will substitute for fixed telephony as the primary form for personal communications” —Vodafone

Slide 23: 

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