Friday's Telegeography CommsUpdate came with news of a fourth entrant to Gabon's mobile market. Again, I find myself returning to the recent blog post in which I explored the comments of MTN CEO Phuthuma Nhleko, who has recently suggested that we can expect to see a wave of cellular sector consolidation across Africa as this year wears on.So can Gabon, a fairly small country in west Africa, with an estimated population of just 1.5 million, support four profitable mobile operators? On the plus side, the small population together with abundant natural resources and foreign private investment have helped make Gabon one of the most prosperous countries in the region, with the highest Human Development Index score in Sub-Saharan Africa.
While the relative prosperity of the country sounds good in terms of ARPU potential, the new entrant will be arriving well after the subscriber gold rush. Mobile penetration in Gabon stands at over 100%, according to the World Cellular Information Service maintained by Informa Telecoms & Media. The latest entrant then, will need to do a great job in terms of effective differentiation and on the marketing and branding front. This may be a challenge given the deep pockets of two of three incumbent players - Zain Gabon (53.79% market share) and Etisalat-backed Moov (16.49% share) are the two operators backed by well-funded groups from the Middle East. The other operator is Libertis (29.72% share), the mobile unit of national incumbent wireline operator Gabon Telecom, in which Morroco's Maroc Telecom acquired a 51% stake in February 2007. Maroc Telecom is controlled by Vivendi, whose other investments include French mobile operator SFR and various media assets. This looks like a challenging competitive environment.
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Tis very hard indeed to believe anyone would take the risk to invest in such a market, especially with the global downturn just starting and capital at a premium. But I have been wrong before. Regardless, your venture reminds me of my early days at Qualcomm trying to raise capital to build networks in every 3rd world country we visited.
ReplyDeleteBapakgila, thanks for the comment... but I don't have a "venture" as such in emerging markets. This blog just offers a round up of telco sector news arising from these markets.
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