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Wednesday, September 19, 2007

Telecom: Africa’s ARPU to drop by 8%

The Average Revenue Per User (ARPU) on the continent of Africa, within the telecommunications sector is expected to drop by eight per cent by December 31, 2007, according to the Principal Analyst at Informa Telecoms & Media, Devine Kofiloto.

Universally, ARPU is used as a financial benchmark in measuring the average monthly or yearly revenue generated for each customer unit, such as a cellular phone or pager, that a carrier has in operation. Thus, it serves as an indicator of a wireless business’ operating performance.

Commenting on the overview of African telecoms market at the weekend, Kofiloto noted that as at end of 2006, that the continent’s yearly ARPU was at $14.50 (about N1,823) and is expected to further drop by eight per cent to $13.42 (about N1,687) by end of 2007.

Kofiloto pointed out that against this backdrop, the growing demand for data, primarily for Internet access service, is predicted as the emerging, especially for wireless operators on the continent.

“Against this backdrop, the growing demand for data is the next growth market for wireless operators to stabilize if not halt the decline in ARPU,” the analyst declared.

The promising corporate sector’s increasing need for high speed broadband data access, the gradually increasing PC penetration among the middle class and the spread of internet cafés across many markets, the analyst said, has begun to create that much anticipated market demand for broadband access.

Kofiloto observed that with fixed line infrastructure relatively undeveloped across the continent, “it goes without saying wireless service providers are best poised to benefit from this growing demand.”

Also speaking, Conference Manager, GSM-3G World Series for Africa at Informa Telecoms & Media, Ms Julie Rey, said that noticeable across the continent is the impact this growing wireless data demand is having on the technological landscape.

The emergence of alternative broadband access technologies such as Flarion, iBurst, TD-CDMA and WiMAX, all claiming to deliver high data rates at lower cost, is opening up new opportunities for operators’ future data strategies and technology choice.

“The most dominant of these, WiMAX, dubbed as having the potential of becoming a disruptive technology to current data delivery technologies has continued to make headlines,” she said.

She pointed out that for the Global System for Mobile communications and Code Division Multiple Access (GSM/CDMA) operators yet to go down the technological evolutionary path of three-in-one variable of Wideband CDMA (WCDMA) and CDMA aligned to Evolution-Data Optimised (CDMA-EVDO) which are viable alternatives have also raised uncertainties as much as opportunities.

As said by her, Informa Telecoms & Media, a leading provider of business intelligence and strategic marketing solutions to the global telecoms and media markets, has concluded plans to host the telecom operators on the continent to AfricaCom 2007, holding in Cape Town, South Africa as part of the entities GSM-3G World Series.

Stressing that this year, over 3000 participants, 70 speakers and 180 exhibitors are expected to attend the event, representing the whole communications value chain, from GSM and CDMA operators, Internet Service Providers (ISPs), regulators and government bodies, telecommunications solutions vendors, investors and more.

She added that the event is supported by the GSM Association, the African CDMA Forum, the World Wide Web Consortium, the Open Mobile Alliance and the Global Mobile Suppliers Association.

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