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Africa Mobile Trend Analysis

Africa remains focused on data market growth

For further details about the data in these slides, click on the URL links to the live sites below each data set If you have any requests or suggestions for other data sets to be included, please contact us at Analyst Support analystsupport@informa.com Informa UK Limited 2011. All rights reserved.

Africa Highlights

By end 4Q11, Africas mobile subscriptions reached at 645.98 million translating to a penetration of 60.45% and a year-on-year growth of 19.12%. Nigeria maintained the market lead in the African continent with 95.22 million mobile subscribers and a penetration of 58.22% in 4Q11. MTN Nigeria continues to be Africas biggest operator with 41.64 million mobile subscribers as of 4Q11. Ethiopia to have a CAGR of 17.1% by 2017, the highest in the region.

Africas mobile broadband subscriptions reached 15.4 million in 4Q11 with South Africa leading with 7 million. Vodacom South Africa remained the top African mobile broadband operator in 4Q11 with 3.5 million subscribers HSPA to dominate Africas mobile subscription by 2017 representing 74.2% of the total. Africa see three commercial LTE network launches

Mobile subscription data

Increased growth rate in 2H11 see the regions penetration rate surpass 60%
African subscriptions vs quarterly growth
660 Subscriptions (mn) Quarterly growth (%)
7.00% 6.00% Growth (%) 5.00%

Share of African subscriptions, 4Q11

Nigeria 15% Egypt 12%

Subscriptions (millions)

640

620
600 580 560 540 520 500 480
4Q10 1Q11 2Q11 3Q11 4Q11

4.00%
3.00% 2.00% 1.00% 0.00%

Others 48%

South Africa 9%

Morocco 7%

African Summary Subscriptions (m) Net adds (m) Quarterly growth (%) Penetration (%)

4Q10 542,5 31,1 6,09 51,93

1Q11 566,6 24,2 4,45 53,93

2Q11 589,5 22,9 4,05 55,80

3Q11 616,3 26,8 4,54 58,00

4Q11 645,5 29,2 4,74 60,41

Others 44%

Kenya 4%

Algeria 6%

Share of African net additions, 4Q11

Egypt 13%

Subscription net additions

6,000 5,000 Thousands 4,000 3,000 2,000 1,000 0

Quarterly net additions comparison 4Q10 and 4Q11

Ethiopia 13%

4Q10 4Q11 Uganda 4% Egypt Egypt Mali Ethiopia Morocco Uganda

Nigeria 11%

Sudan 7%
South Africa 6%

Subscriptions

Country Focus: Nigeria

Nigeria recovers from negative growth brought about by SIM card registration in 1H11
Subscriptions (million) 100 Subscriptions (million) 80 60 40 20 0 4Q10 1Q11 2Q11 3Q11 4Q11 -5 5 Quarterly Growth (%) 10 Growth (%)

Share of Nigerian subscriptions, 4Q11

Etisalat 11% Airtel 19% Rest 5%

Glo Mobile 21% MTN 44%

By end 4Q11, Nigeria had a total of 95.22 million mobile subscribers and a total penetration of 58.22%. The country experienced a positive growth rate of 3.44% as operators recover from the negative growth rates brought about by SIM card registration in 1H11.

Share of Nigerian net additions, 4Q11

Increased competition in 2H11 saw MTN lose its market share from 45.2% in 2Q11 to 44% in 4Q11. However, it continued to maintain the market lead with over 41 million subscribers Etisalat registered the highest number of new subscribers in 4Q11, amounting to 1.87 million and representing 49% of the total net additions over the quarter.

Airtel 36% Glo Mobile 1%

MTN 14%

Etisalat 49%

Country Focus: Egypt

Egypt sees increased mobile penetration in 2H11
Egypt subscription and quarterly growth, 4Q10-4Q11
100 Subscriptions (m) Subscriptions Quarterly growth (%) 10 8

By the end of 4Q11, Egypt had 80.82 million mobile subscribers representing a penetration of 93.26%. The year on-year growth rate for the quarter stood at 18.32% compared with 23.4% in 4Q10.

Growth (%)

6
80 4 2 60 4Q10 1Q11 2Q11 3Q11 4Q11 0

Vodafone maintained the market lead in 4Q11 with 44% market share and 36.36 million subscribers. Total net additions for the quarter stood at 3.74 million

Share of Egypt subscriptions, 4Q11

Vodafone 44% ECMS 36% Vodafone Egypt 64%

Share Egypt net additions, 4Q11

ECMS 1%

Etisalat 17%

Etisalat 35%

Country Focus: South Africa

South Africa records positive growth in 2H11
Share of South Africa subscriptions, 4Q11
South Africa subscription and quarterly growth, 4Q10-4Q11
60 Subscriptions (m) 50 40 30 20 10 0 4Q10 1Q11 2Q11 3Q11 4Q11 Subscriptions Quarterly growth (%) 8 7 6 Growth (%) 5 4 3 2 1 0 MTN 38% Vodacom 44% 8ta 2% Cell C 16%

Share of South Africa net additions, 4Q11

8ta 15% Vodacom 16%

At the end of 4Q11, South Africa had 58.24 million mobile subscribers representing a penetration of 114.53%. The quarterly growth rate stood at 3.43% compared to 0.55% in 2Q11. Vodacom maintained the market leader position with 44% market share and 25.35 million subscribers. However, it is closely followed by MTN with 22.03 million subscriber.
MTN 55% Cell C 14%

MTN registered the highest net additions for the quarter amounting to 1.07 million. This represented 55% of the total net additions in 4Q11

Top 20 markets by net additions in the year to end 4Q11

Top 20 markets by % growth in the year to end 4Q11

* Markets with more than 4 million subscriptions

Subscription forecasts, 2012-2017

Ethiopia to record highest CAGR growth by 2017
Africa by CAGR, 2012-2017 (countries with subs +10 million)
18 16 14 CAGR (%) 12 10 8 6 4 2 0 Cameroon Uganda Democratic Rep of Congo Cte d'Ivoire Nigeria Ghana Sudan Kenya Mali Tanzania Morocco Egypt Senegal Ethiopia 2016 Morocco

14 12

Africa top ten net addition 2012-2017

1,200 Subscriptions (millions) 1,000 800 600 400 200 0 2012 2017

Africa Subscription Forecast 2012-2017

10
Millions 8 6 4 2 0

2012 Nigeria

2013 Egypt

2014 South Africa

2015 Algeria

2017 Rest

Forecasts

3G/4G trends
Africas mobile data segment grows as more operators launch 3G+ networks
700 600 Subscriptions (millions) 3Q11 500 3Q11 400 3Q11 3Q11 3Q11 3Q11 2012 2013 2014 W-CDMA 1xEV-DO 2015 HSPA 2016 LTE 2017 4Q11 4Q11 Ghana Kenya Sierra Leone Tunisia Nigeria Burundi Congo Tigo Orange Africell Tunisie Telecom Etisalat UCom Bharti Airtel W-CDMA-2100 W-CDMA-2100 W-CDMA-2100 W-CDMA-2100 W-CDMA-2100 W-CDMA-2100 W-CDMA-2100 WiMAX-Mobile2300 W-CDMA-2100 W-CDMA-2100 GSM-900 W-CDMA-2100 W-CDMA-2100 Burundi Econet W-CDMA-2100

Africa 3G/4G subscriptions forecast by technology

Network deployments 2H11

Start date Country Operator Technology

300
200 100 0

3G subscriptions by country, 4Q10 vs 4Q11

14.0 Subscriptions (millions) 12.0 10.0 8.0 6.0 4.0 2.0 0.0
South Africa Egypt Nigeria Kenya Morocco Zimbabwe Tunisia Tanzania Angola Ethiopia

4Q11

Nigeria

Spectranet

4Q11 4Q11 4Q11 4Q11 4Q11 4Q11

Swaziland Uganda Mauritius Cape Verde Guinea Republic Togo

MTN Warid Mahanagar Telephone T+ Orange Guinee TogoCel

4Q10

4Q11

W-CDMA-900

3G defined as W-CDMA, HSPA, EV-DO and EV-DO Rev A 3G/HSPA subscriptions Network launches

Technology forecast, 2012-2017

HSPA to dominate Africas mobile subscriptions by 2017
Africa Country share of HSPA subscriptions, 2012

Africa subscription forecast by technology

1,400 1,200 Subscriptions (millions) 1,000 Morocco 6% Egypt 7% Kenya 7%

Others 25% South Africa 40%

800
600 400

Nigeria 15% Africa Country share of HSPA subscriptions, 2017

200
0 2012 2013 2014 2015 2016 2017

South Africa 13% Nigeria 11% Others 52%

Egypt 11%
Morocco 6% Kenya 7%

2G and 2.5G(GSM, GPRS, EDGE, 1xRTT) 3.5G (HSPA, EV-DO Rev. A)

3G (WCDMA, EV-DO) 4G (LTE)

Forecast for 3G Split WCDMA-only HSPA 1x EV-DO

2012 40,714,700 36,977,300 3,478,600

2013 54,829,100

2014 70,211,100

2015 85,961,900

2016

2017

99,306,600 108,669,800

68,373,700 118,733,100 191,638,000 289,757,000 408,749,000 5,275,300 8,624,300 14,786,300 23,269,800 33,185,800

Forecasts

Mobile broadband summary

South Africa leads Africas mobile broadband market
Africas mobile broadband subscriptions 4Q10-4Q11
18,000 Subscriptions (thousands) 16,000 14,000 12,000 10,000 8,000 MTN Nigeria Globacom Nigeria Wana Morocco Safaricom Kenya Etisalat Egypt Vodacom South Africa MTN South Africa

Top African mobile broadband operators, 4Q11

0 Subscriptions (thousands) 500 1,000 1,500 2,000 2,500

6,000
4,000 2,000 0 4Q10 1Q11 2Q11 3Q11 4Q11

Top mobile broadband markets, 4Q11

8,000 Subscriptions (thousands) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Kenya Ghana South Africa Namibia Nigeria Botswana Morocco Runion Egypt Angola

Mdi Tlcom Morocco Ittissalat Al-Maghrib Unitel Angola

Note: Mobile broadband subscriptions refer to the number of active subscriptions used in a device enabled for HSPA, EV-DO, or EV-DO Rev A covering all device types (data-cards, USB modems, embedded notebooks and handsets).

http://www.informatm.com/itmgcontent/icoms/reports/3000004726.xls

Data market
Africa sees 13.5% y-o-y growth in data revenues in 4Q11
Data revenues by operator, 3Q11
400 350 Data revenues (US$ m) 300

250
200 150 100 50 0
Vodacom SA MTN SA Safaricom MTN Nigeria Ittissalat Al-Maghrib Unitel Angola Libyana Orascom Algeria ECMS Egypt Vodafone Egypt

Africa continues to register growth in data revenues as operators shift their focus to mobile data as the key revenue driver amid dwindling voice service revenues. In 4Q11, total data revenues amounted to over US$1.4 billion representing a 13.5% increase over 4Q10. South Africa lead the Africas data market in 4Q11 generating a total of US$612.46 million. However, Starcomms Nigeria posted the highest data revenue (40%) as a percentage of total revenue over the quarter. The growth in data revenues is largely attributed to adoption of 3G+ networks by more operators in region as well as aggressive marketing campaigns data products. In 2H11, 13 operators launched services to their customers. the the for 3G

Data revenues as a percentage of service revenues by operator, 3Q11

45% 40% Data revenues (%) 35% 30% 25% 20% 40%

As of 2Q12, Africa has seen three commercial LTE network launches. Angolas Movicel became the first operator to launch LTE services in Africa. It was followed closely Namibias MTC and Mauritiuss Emcel.

28%
22% 22% 21% 14%

15%
10% 5%

13%

13%

13%

12%

0%

Starcomms Safaricom Vodacom SA

MTC Namibia

MTN SA

Airtel Zambia

Unitel Angola

Vodacom TZ

Vodacom Lesotho

Tigo TZ

World Cellular Data Metrics

Data usage summary

Non-SMS data has become the main data revenues contributor in key markets
Top 10 operators by non-SMS data revenues as % of total data revenues, 3Q11
0.0 MTN South Africa 10.0 20.0 30.0 40.0 50.0 60.0 70.0 61.9%

Africa continues to register growth in non-SMS data segment. In 3Q11, the contribution of non-SMS data to total data revenues in Africa remained way beyond 50% as demand for mobile Internet increase. The availability of low-cost smartphones has increased adoption in the continent. Informa Telecoms & Media forecasts a penetration of 11% by 2016.

Vodacom South Africa

61.9%

MTN Ghana

50.0%

MTN Nigeria

Smartphone connections forecast Africa, 2012 - 2016

50.0%

Smartphone connections
Safaricom Kenya

Smartphones penetration rate

46.0%
Millions

80

10.00%

Globacom Nigeria

46.0%

60

7.50%

Airtel Nigeria

43.0% 40 5.00%

MTC Namibia

34.0%

20
Airtel Kenya 28.7% Airtel Zambia 20.0% 2012 2013 2014 2015 2016

2.50%

0.00%

World Cellular Data Metrics

Operator performance indicators

Increased competition in Africa sees a decline in operators blended ARPU
Average blended ARPU by country, 4Q10-4Q11
35.00 30.00 25.00 ARPU (US$) 20.00 15.00 10.00 5.00 0.00 4Q10 1Q11 2Q11 3Q11 4Q11 Angola South Africa Cape Verde Botswana Mauritius Tunisia Morocco Swaziland Gabon Equitorial Guinea Congo

http://www.wcisplus.com/xls/GlobalARPU.xls

Highest ARPU by operator, 4Q11

Country Operator

Lowest ARPU by operator, 4Q11

Blended ARPU (US$)
Country Operator Etisalat Benin Tigo Rwanda Orange Madagascar Kasapa Bell Benin Communications Onatel Burundi Blended ARPU (US$) 3.40 3.31 3.04 2.74 2.40 2.20

Reunion
Cape Verde Mauritius Equitorial Guinea Reunion Angola Libya

SFR Reunion
Cabo Verde Telecom Mahanagar Telephone Mauritius Getesa Outremer Telecom Reunion Unitel Angola Libyana

40.00
31.52 28.50 28.00 24.50 23.00 23.00

Benin Rwanda Madagascar Ghana Benin Burundi

Guinea Republic Sotelgul

1.35

KPI's

Key Outlook

According to Informa Telecoms & Media forecast, African will have 1.12 billion subscriptions by end-2017 up from 649.7 million in end-2011, representing a 72.3% increase.

Africas mobile broadband market continues to be dominated by 3G+ connections. This is expected to be the case in the near future despite the great interest in LTE by operators in the region.
The data market is expected to grow in double digits in the region as competition among operators intensifies. The availability of low-cost smartphones such as Huawei Ideos and Samsung Galaxy Pocket will also see a surge in data usage. More operators in the region continue to adopt mobile money transfer services as key revenue channels. However, the service has evolved from a mere P2P to more integrated mobile financial service that will require necessary security measures to prevent fraud.

Telecom regulators in the region continue to outline various measures to ensure quality of service provision by operators. Nigeria, Ghana and Uganda are a few markets where operators have been served with hefty penalties for poor quality of service. This is expected to spread in other markets and will force operators to invest heavily in improving the quality of services they provide to their customers
The commercial launch of LTE services by Movicel, MTC and Emcel is expected to lead the way for other operators in Africa. Several operators in Africa have already completed LTE trials and are only awaiting spectrum auctions for them to roll out the networks .