Mobile Carriers Start Hanging Up on Africa

Issue 07-16-17   |   Reviewer:   Duane Helleloid, Ph.D.

Abstract

Multinational mobile service providers are scaling back their investments in Africa and pulling out of some markets. India-based Bharti Airtel has sold its operations in Burkina Faso and Sierra Leone to France-based Orange. Similarly, Luxembourg-based Millicom has sold its businesses in Senegal and the Democratic Republic of Congo.

While subscriber growrth remains strong, the revernue per user is falling as poorer individuals acquire their first mobile phone. This makes it harder for firms to remain profitable unless they have significant economies of scale. Countries are also adding new regulatory hurdles that add costs and/or result in additional payments to governments. Not all carriers are pulling back, and Orange is committed to investing more than a million euros a year in Africa while expanding services such as mobile banking.





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