East Africa has huge potential for telecommunications growth and could be a good place for investors to look at.
This is one of the messages that came out of this week's annual regional event for the telecommunications industry, East Africa Com, held in Dar es Salaam.
More than 450 telecommunications professionals, representing 20 countries, gathered at the event.
Keynote speaker Bashar Arafeh, Celtel International's COO for the East Africa region, pointed out that "East African markets, being currently under market average, hold plenty of room for growth".
He explained how Celtel is leveraging its regional presence and international ambitions to improve networks and offer innovative services, such as the "one network" regional roaming plan. He highlighted the importance of a strong brand to take full advantage of market opportunities.
Dietlof Mare, CEO of Vodacom Tanzania, also described the opportunities for telecommunications companies in Tanzania, thanks to political stability, high GDP growth (around 7%, higher than in the rest of Africa), and a penetration rate that is still increasing sharply.
On the other hand, he described the challenges faced by large operators in the rollout of their networks: lack of infrastructure, power issues, and increasing fuel prices.
Despite those challenges, he described what he thought were the key success factors for Vodacom's leadership in the market: building quality networks (including 3G/HSPA and WiMax in the main cities for corporate custoemrs) and developing services that meet the customers' needs. As an example, he announced the launch of Vodafone's M-Pesa payment service (pioneered in Kenya by Safaricom) at the end of the month in Tanzania.
Both speakers mentioned competition and the resulting price decline as a major challenge in the markets.
Mare pointed out that new players dropping prices affect long term profitability and the investment level necessary for future network deployment in a market. Arafeh, on the other hand, welcomed the entry of two new operators in Uganda.