Who are the Top 10 Cellular Operators in the Mid-east and Africa?

October 21, 2007 • Mobile and Telecoms

The mobile market in the Middle East and Africa seemed to slow down in the second quarter of 2007. Indeed, we have to go back four years, to the second quarter of 2003, to find its equal.

In both periods, the market grew by 8.0%, but while this implied fewer than 5 million new connections in 2003, in 2007, it meant 24 million. Looking across the markets what we see is that most of the fastest growing businesses were in Africa, rather than the Middle East, where markets are characterised by much higher penetration rates.

The ten largest companies in the region account for 43.2% of the region’s customers, marginally down quarter on quarter. The list contains the same names as it did in the last quarter, but there have been a couple of changes in positioning.

Vodacom in South Africa continues to head the list – as it has done for all the last decade – though the gap between it and second placed TCI of Iran continues to narrow. Vodacom SA added 1.55 million new connections in the quarter, to take its total to 21.95 million, equivalent to a regional market share of just over 6.6%. This equates to 6.7% growth on the prior quarter, which is something of an achievement under the circumstances – penetration in South Africa is edging towards 100% and stood at 94.6% at the end of the quarter. This suggests a slower growth rate in future and it would seem that with 59% market share in its home market, the scope for poaching from its competitors must be limited.

Vodacom’s main challenger is TCI, the Telecommunications Company of Iran, one of the few countries in the Middle East region that can be considered under-developed – penetration, at 29%, is below that in neighbouring Iraq where mobile telephony was only introduced four years ago. TCI made 1.86 million new connections in the quarter (an 11.7% growth rate) to reach a total of 17.8 million customers. Logic suggests that as Iran’s population is materially higher than South Africa’s (69m against 44m) TCI must inevitably overtake Vodacom. But if that happens, TCI may not enjoy regional leadership for anywhere near as long as Vodacom has.

The fourth and fifth placed operators in the region are both from Nigeria, a country with nearly twice the population of Iran. Both have around 14 million customers today, which puts them both within striking distance of the top spot. Admittedly, competition is more fierce in the African country, but MTN Nigeria (14.0m customers, 37.6% market share) and Globacom (13.95m and 37.3%) are way out ahead of their two competitors.

STC, the largest operator in Saudi Arabia, is sandwiched between TCI and the Nigerian companies. It closed the quarter with 15.5 million connections, after a gain of just 0.2 million. We can anticipate another growth spurt in the current quarter, due partly to the impact on demand of Ramadan and partly because STC faces the prospect of a third competitor in the shape of Kuwait’s MTC.

MTN South Africa had a quiet time in Q2 2007, with just 0.21 million net additions, to take its total to 13.4 million. This was the second smallest gain of any company on this list and as a result, it has dropped one place this quarter to sixth place.

The four remaining companies in the ranking are all in North Africa. Orascom’s Algerian subsidiary connected a further 0.7 million new customers to end the quarter just shy of the 12 million mark. However, it seems likely to lose this place next quarter to Mobinil, the France Telecom/Orascom venture in Egypt, which closed with 11.90 million customers, having added 1.2 million new connections between March and June. Mobinil and its Vodafone Egypt rival are both piling on customers in an attempt to minimise the impact of the third entrant in the market, a consortium headed by Kuwait’s Etisalat. Vodafone Egypt is in fact the tenth largest business in the region, having added even more customers than Mobinil, to take its total to just under 11 million. Maroc Telecom separates the two, taking ninth place with 11.7 million.

As can be seen, all ten of these operators now have over ten million customers. However, it would be wrong to think that this is where the story ends. The spread of mobile ownership across the region is such that as at the end of June, there were over 60 separate networks with one million or more customers. Between these two statistics, come others. The top 15 operators all have more than five million – numbers eleven to 15 being respectively Algeria Telecom Mobile, V-Mobile in Nigeria, Safaricom Kenya, Mobily in Saudi Arabia and Etisalat. The top 30 all have more than 2.5 million customers in fact and as the accompanying piece on the region’s major operators shows, a large majority of these businesses are owned by one of just eight or nine multinational groupings.

Source: Cellular



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