African mobile markets are seeing significatn growth as a result of new network investments coupled with the evailability of inexpensive handsets.

The mobile communications markets of Kenya, Tanzania, Uganda and Rwanda are in their growth stages. In 2008, Kenya enjoyed the highest number of active subscribers and revenues among the four countries. Tanzania, Uganda and Rwanda are however likely to witness significant growth over the next seven years due to increasing network investments, continuing product innovation and reduced handset costs.
New analysis from Frost & Sullivan finds that the combined mobile communications markets of Kenya, Tanzania, Uganda and Rwanda earned revenues of $2,62-billion in 2008, and estimates this to reach $8,99-billion in 2015. The technologies covered in this study are code division multiple access (CDMA), global system for mobile communications (GSM), general packet radio service (GPRS), high-speed downlink packet access (HSDPA) and wideband code division multiple access (WCDMA).
"The key drivers in these markets include strong gross domestic product (GDP) growth rates, increasing demand for mobile money transfer services and declining handset costs," says Frost & Sullivan ICT analyst Jiaqi Sun. "East African consumers are spending more on mobile communications due to the low fixed-line network coverage, underdeveloped banking systems, and the current limited availability of inexpensive handsets."
Currently, there are 37,6-million mobile subscribers in east Africa, at a penetration rate of 30,8%. The total number of subscribers is expected to reach 99,5-million in 2015, at a compound annual growth rate (CAGR) of 14,9%.
"The launching of undersea cables is anticipated to reduce the cost of telecommunications by 60% over the next seven years," says Sun. "This will boost the demand for mobile Internet access."
However, there are challenges faced by the market participants such as high tax rates on mobile services, the lack of network rollout in rural areas and the current low demand for data services. Additionally, the demand for data services from corporate clients has dwindled due to the economic downturn.
"Frost & Sullivan expects mobile network operators to enhance their services by continuously investing in infrastructure like call-switching capacity," Sun says. "This will help in developing innovative solutions like mobile money transfer services, and initiate managed services by outsourcing non-core businesses like network maintenances. These strategies will step-up the demand for mobile services, boosting subscriber and revenue growth."