Rarely has an industry been as celebrated as the African mobile industry over the past decade – and deservedly so. From its unprecedented ability to alter human interaction and communication, change the fabric of entire economic sectors, and attract massive infrastructure investment, the contribution of the telecom sector to African development over the past 15 years has been truly transformational.
But the fundamentals that have long underpinned the success of Africa’s mobile telecom sector are now under significant threat, and the future of individual operators is far from certain. Part of Xalam Analytics’ “Future of Telecoms” series, The Future of African Mobile Profitability provides a comprehensive overview and analysis of the dynamics that underpin mobile profitability in Africa.
View & download the Executive Summary and Table of Contents below!
But the fundamentals that have long underpinned the success of Africa’s mobile telecom sector are now under significant threat, and the future of individual operators is far from certain. Xalam Analytics’ latest research suggests that the African mobile market has entered a phase of acute turbulence, at the exit of which many players will come transformed, no longer mere telecom operators, but full-fledged platforms for digital service innovation. Others will not make this great trek, felled by the combined effect of OTT service cannibalization, destructive competition, regulatory apathy and shortsightedness, voracious and misguided tax policies, weak supporting infrastructure, shareholder impatience, and their own inability to realize they’re in trouble and take appropriate corrective steps.
Part of Xalam Analytics’ “Future of Telecoms” series, The Future of African Mobile Profitability provides a comprehensive overview and analysis of the dynamics that underpin mobile profitability in Africa. Building on extensive quantitative analysis, a dozen interviews with market players and one of the region’s most extensive quantitative databases, the report proposes some answers to some of the most critical questions facing African operators, such as:
In The Future of African Mobile Profitability, Xalam Analytics lays out the roadmap for African mobile operator transformation from mere telcos into full-fledged digital platforms.
EXECUTIVE SUMMARY: AFRICA’S GREAT TECHNOLOGY TREK IS UNDERWAY, FROM
VOICE TO DIGITAL PLATFORMS
I. A MACRO VIEW OF AFRICAN MOBILE: THE REVOLUTION WAS NOT OVERSTATED
– BUT THE GOLDEN AGE IS OVER
1.1 The Africa Mobile SIM Base – 825m in 2014
1.2 Mobile Penetration – The 100% Barrier Is Mythical No Longer
1.3 A 2020 View – Breaking the 1bn Subscription Barrier
1.4 Africa Mobile Revenue: The Golden Age of African Mobile Is Over
II. A MACRO VIEW OF AFRICAN MOBILE PROFITABILITY
2.1 Three Phases of African Mobile Growth – From The Scramble Phase To The Data Phase
2.2 Africa Mobile Profitability: A Macro View – When FX Wreaks Havoc on EBITDA
2.3 Africa Mobile Profitability: Two-Thirds of Non-Top Tier MNOs are Unprofitable
III. THE REVENUE SIDE: CHALLENGING TIMES FOR AFRICAN MOBILE REVENUES
3.1 A Macro-View of African Mobile Revenue: Flat or Declining
3.2 Drivers of Revenue – The Marginal Impact of Subscriber Additions
3.3 Mobile Voice Revenue: Commoditized, or the Core of the Business?
3.4 Mobile Voice Revenue: The Impact of MTRs and International Wholesale
3.5 Mobile Voice Revenue: The OTT Impact
3.6 Mobile Messaging: Falling Towards Zero
3.7 Entering the Data Era
3.8 Waiting for 3G (Somewhat) and 4G (Definitely)
3.9 A $15bn Mobile Data Revenue Target by 2020 – 25% of Revenues
IV. THE COST SIDE: OPEX UP, CAPEX STABLE
4.1 Opex Keeps Going Up, and Up, and Up..
4.2 A Macro-View of the Structure of Operating Expenses
4.3 African Mobile Capex – $75bn Spent Over The Past Ten Years, Trending Flat
4.4 African Mobile Capex – A Conservative Outlook
V. TACKLING AFRICA’S DATA MONETIZATION VORTEX: OF REVENUE CANNIBALIZATION
AND OTT IMPACT
5.1 The Mobile Data Monetization Challenge and the OTT Impact
5.2 The Rise of OTTs In Africa & Implications For CSPs
5.3 OTTs In Africa: Friends or Foes?
5.4 OTT Impact In Africa: Looking for the New Revenue Floor
5.5 Quantifying the Data Cannibalization Effect: Mostly Myth, But Inching Towards Reality
5.6 Messaging Bearing the Brunt of Data Cannibalization
5.7 Defining – and Assessing – the Net Revenue Contribution of Data
5.8 Data cannibalization Effects and Voice/Data Arbitrage
VI. OUR THEORY: A DATA MONETIZATION IN THREE PHASES – THE BAD, THE UGLY,
AND THE VERY GOOD
6.1 A Theory of Data Monetization in African Markets
6.2 Phase 1: The Mobile Data Initial Contribution Phase
6.3 Phase 2: The Mobile Data Negative Contribution Phase
6.4 Phase 3: The Data-Centric Phase: Mobile Data Positive Contribution
6.5 In Focus: Is Safaricom a Model of Digital Transformation?
SECTION VII: TACKLING CRITICAL QUESTIONS
A. Is 4G worth the hassle?
7.1 The African 4G Predicament
7.2 The African 4G Case: Don’t Burn the 3G Bridge Just Yet
B. Do Tower Sales Make a Difference to Operator Performance and Profitability?
7.3 The Triple Case for Tower Outsourcing
7.4 The Opex Case for Tower Sales – We Don’t See It – Yet
7.5 The Capex Case – Collecting Cash and Moving Liabilities off the Balance Sheet
C. Is Mobile Money More than Hype?
7.6 Africa Mobile Money Registered vs. Active Users
7.7 Africa Mobile Money Contribution to Revenue
7.8 Africa Mobile Money: Where Is the Upside?
VIII. AFRICAN MOBILE OPERATOR VALUATIONS: THE END OF THE AFFAIR
8.1 African Mobile Value Is Trending Down
8.2 Transaction Database – 80+ Transactions Since 2000
IX. PAN-AFRICAN PLAYER REVIEW
9.1 Overview: Pan-African Players Still Dominate
9.2 Pan-African Player Overview – Presence and Subscriber Base
9.3 Pan-African Player Overview: Revenue, Profitability and Capex
9.4 Pan-African Player Regional Focus – Pivoting to North Africa
9.5 Pan-African Player Overview: Free Cash Flows Under Strain
9.6 Millicom’s Zantel Acquisition – Beyond the Headlines, a North Africa Pivot, Consolidation
and a Shrewd 4G Play
9.7 They Came, They Saw, But Did Not Conquer: Warid, Lap Green, Essar and Others
9.8 In Focus: What’s Next for Sudatel?