Site sharing and outsourcing enable MEA mobile service providers to reduce costs and expand services, states new Analysys Mason research programme
LONDON, 21 June 2011: Building on the emerging opportunities in the Middle East and Africa (MEA) region presents significant challenges for telecoms and media market players and investors, highlights latest research from telecoms adviser Analysys Mason’s newly launched The Middle East and Africa regional research programme (http://www.analysysmason.com/Research/Programmes/MEA/).
“The extreme price sensitivity of a large portion of the population, the limited fixed network infrastructure, and the political and regulatory complexity in many MEA countries means that developing successful telecoms offerings is more challenging than in more mature markets,” states Roz Roseboro, lead analyst for The Middle East and Africa regional research programme.
Network and site sharing, as well as outsourcing of key elements of network operations, are becoming critical tools for MEA mobile service providers looking to combat margin squeeze. Analysys Mason estimates that in a passive tower-site sharing model, the potential capex and opex saving compared with building new sites can range from 25% to 50%, after site-build, rental and infrastructure-related cost savings are taken into account.
“These strategies allow operators to focus on the customer, and to compete on service and quality. Mobile network operators that quickly secure sharing agreements will be able to redirect time and resources to focus on differentiation at the service level. By freeing up capital, operators can introduce more sophisticated and targeted services to stimulate sales within specific customer segments, allowing them to cope with the lower average revenue per user (ARPU) rates that will inevitably result from the extension of the subscriber base beyond middle-class urban populations,” explains Roseboro.
According to analysis in The Middle East and Africa programme, keeping service pricing at a level that supports profitability is also presenting a challenge in many African countries – particularly for basic mobile voice and messaging services.
The high price-sensitivity of the user base in most parts of the region has driven many mobile operators to resort to severe price competition as their primary method of building the subscriber base, regardless of its implications for cost structure and long-term sustainability from a commercial point of view. Operators in the region face more limited margins for providing these basic services, but also have requirements to expand geographical coverage and capacity. In addition, in countries such as Kenya and Uganda, regulators are reducing mobile termination rates in order to make mobile services more affordable, while the operators contend that doing so will put severe pressure on their already slim profit margins.
Site sharing and outsourcing are but two of the strategies Analysys Mason’s new regional research programme will explore. The programme offers quantitative and qualitative analysis of service provider strategies, infrastructure investment initiatives, technology and services trends, regulatory issues, key mobile and fixed metrics and five-year forecasts at country and regional level.
Focus areas for our expert analysts include:
- opex and capex reduction strategies (such as site and network sharing, and outsourcing)
- evaluating the impact of increased submarine and fibre connectivity on broadband pricing and availability in the MEA region
- innovative approaches to content and applications services in Sub-Saharan Africa (such as mobile payments and banking, mobile marketing and m-health initiatives)
- driving customer loyalty in heavily prepaid markets
- mobile device trends, such as subsidisation, bundling, channels and the USD50 smartphone
- extending the access network effectively: urban versus rural strategies, and key considerations
- FTTx in the Middle East – strategies and the forward view
- building successful SME offerings in Sub-Saharan Africa.
If you would like to arrange an interview with Roz Roseboro or learn more about The Middle East and Africa regional research programme, contact the press office, Kate Brown kate.brown. Alternatively, you can visit our website http://www.analysysmason.com/Research/Programmes/MEA/.
For all press enquiries, contact Gina Ghensi or Kate Brown at press or telephone +44 (0)845 600 5244.
About Analysys Mason (www.analysysmason.com)
Analysys Mason delivers strategy advice, operations support, and market intelligence worldwide to leading commercial and public-sector organisations in telecoms, IT, and media. Analysys Mason consistently delivers significant and sustainable business benefits. We are respected worldwide for the exceptional quality of our work, our independence and the flexibility of our teams in responding to client needs. The company has over 250 staff worldwide, with headquarters in London and offices in Cambridge, Dubai, Dublin, Edinburgh, Madrid, Manchester, Milan, New Delhi, Paris, Singapore and Washington DC.
Gina Ghensi / Kate Brown
Tel: +44 (0)845 600 5244
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