International investment strengthening telecoms market

MTN, which published its yearly results at the beginning of this month, has also confirmed strong results for 2006, with EBITDA rising 53% on a 73% jump in subscribers, and EBITDA margins rising up 100 basis points to 43.4% leading to an after-tax profit increase of more than 70%.

For East and Central Africa, the effects of this growth are considerable. Kenya, Tanzania and the Democratic Republic of the Congo (DRC) are now among the 10 largest mobile markets in Africa, with DRC's mobile market forecasted to grow by 200%, Tanzania's by 109% and Kenya's by 87% over the five years to December 2011. All of these exceeding the forecast rate of 72% for the African continent as a whole over the same period. At the end of 2006, mobile subscriptions for the region had already exceeded 30 million, representing 16% of Africa's total subscriptions. This is forecasted to rise to 20% by the end of 2011, when more than 67 million users in this African sub-region are anticipated.

Enticing investors

Consequently, East and Central Africa has become a real lure for international investors looking to expand and multiply their profits. MTN has credited its recent financial success in part to a prosperous year in Uganda, where subscription figures for the telco rose 63% from the previous year. Celtel, whose portfolio now spans seven countries in East and Central Africa, is also enjoying considerable success in the region.

Community projects

The benefit of this international investment is also far from one-way - in return for financial gain, both companies are fully committed to aiding East and Central African welfare through targeted community projects.

MTN Rwanda, for example, is now engaged in a partnership with the World Health Organisation to utilise its mobile network as a distributed surveillance system for hospitals in Rwanda.

Celtel's flagship corporate responsibility programme, Build Our Nation, has also been established in support of the United Nations Millennium Development Goal, with the aim that by 2015, children everywhere will be able to complete a full course of primary schooling. In 2006 alone, Celtel has been responsible for spending more than US$1,000,000 across Africa donating books and other school supplies.

And so it seems that international investment is good news for East and Central Africa, with its ability at once to enhance social development and contribute positively to the region's economic growth. It is hardly any wonder that as the telecoms market in the region continues to expand, numerous other investors including Orange Group, MIC and Reliance Communications are also beginning to latch on its potential.