Nigeria claims top spot in African mobile market

Nigeria, recording more than 61 million subscribers, has surpassed South Africa as the largest mobile telecommunications market in Africa, according to a report from Pyramid Research.

South Africa, with a population of 45 million, has been Africa's largest mobile service market, with 42.4 million subscribers in 2007, expected to rise to 48.5 million by 2010, according to Market Research Corp. Nigeria is the most populous country in Africa, with 135 million people.

Nigeria's continued growth over the next five years is expected to trigger more intense competition among a growing number of network operators, said Yejide Onabule, analyst at Pyramid Research and author of the report.

The Nigerian telecom market grew by 23 percent in 2008, generating US$8.4 billion in overall telecom service revenue, said Onabule. With mobile subscriber penetration at just 42 percent, Nigeria's total telecom revenue is expected to increase at a rate of 5.7 percent from US$8.42 billion in 2008 to $11.14 billion in 2013.

Since liberalization of the market in 2003, Nigeria's telecom industry has experienced exceptional growth rates, which is attracting new operators.

"The bulk of service revenue will continue to come from mobile, which will generate 83 percent of total service revenue over the next five years," said Onabule.

In a separate report, the research company has predicted that mobile penetration in Kenya will grow by 95 percent over the next five years, reflecting intense competition among network operators and leading to a rapid uptake of mobile data services. The subscriber base is expected to rise to 29.28 million, or 66.7 percent penetration, by year-end 2013.

"Until 2008, the Kenyan mobile market was a duopoly consisting of Safaricom and Zain," said Dearbhla McHenry, analyst at Pyramid Research and author of the report.

"That has now changed with the entry of two new players -- Econet and Orange. Since their entry, there has been a fierce price war with operators slashing tariffs and introducing new airtime promotions, making their services more affordable for the wider population," McHenry said.

The total revenue of Kenya's telecom market is forecast to grow by 42 percent from $1.39 billion in 2008 to $1.98 billion by 2013, with 78 percent of the total revenue to be generated by the mobile sector.

"Mobile data will be the telecom sector's fastest-growing revenue stream, increasing from $62 million in 2008 to $224 million in 2013, partly due to the launch of 3G services but also to the explosive growth of low-tech, low-margin mobile data services, particularly mobile money transfers," added McHenry.