Balancing Act releases new EA telecoms report

Balancing Act points out each of these three markets as a laboratory for competition. Tanzania has issued seven mobile licences and Uganda has issued six. The number of operators, according to the report, has resulted in increased investment and marketing spend in the top three markets. And in all three countries, this competition has benefited African consumers as the cost of owning and using a mobile phone has fallen.

Tanzania and Uganda have a unified licensing framework and this has apparently encouraged operators to offer mobile broadband to their subscribers. Each country now has several hundred thousand subscribers who access the Internet using their mobile phone.

Based on data gathered for a new report from Balancing Act called "African Telecoms and Internet Markets - Part 3: East Africa", there have been dramatic drops in mobile charges, opening the market to a wider number of users. For example in Kenya, between Q3, 2007 and Q4,2008, calls to other subscribers on the same network fell by over half, from KS18.10 to KS8.98. Over the same period, SMS text messages to subscribers on another network fell from KS5.03 to KS3.69.

Amongst the 15 countries in the report, there are five with a high population: Ethiopia (83 million), Tanzania
(39.5 million), Kenya (38 million), Uganda (29.5 million) and Madagascar (20 million). There are five countries and territories - Comoros, Djibouti, Mayotte, Reunion and Seychelles - with populations of below 1 million.

However, it is in the Indian Ocean Islands with small populations that have much higher GDP per capita than the more populous countries: Reunion (US$23,501), Seychelles (US$18,700), Mauritius (US$11,300) with a population of 1.27 million, Mayotte (US$4,900) and Djibouti (US$3,700).

Tourism has driven growth in Mauritius and Seychelles and the connection to France for the territories of Mayotte and Reunion has had a similar effect. All the other countries in the report range between US$160 (Ethiopia) to US$1,100 (Comoros). None of these countries has oil but Tanzania has natural gas reserves.

This, according to Balancing Act, is due to the Seacom international cable starting operation on 23 July 2009 and the Kenyan government's initiation of the TEAMS project which will follow shortly thereafter, and in Q3, 2010 will come EASSy.

In addition, France Telecom has a project called LION that plans to connect various Indian Ocean islands into these new international cable connections in October 2009: the building has been completed and it now awaits licensing approval.

The mainland East African countries currently connected by satellite may see a large increase in international bandwidth used as prices come down from around US$5,000 per mbps to approximately US$500 on the new fibre connections. This cheaper bandwidth price should lead to cheaper Internet prices for consumers.