In this quarter's update on Ghana's telecoms market, we have incorporated the latest data from the National Communications Authority (NCA) and extended our forecast period to 2016. We envisage that the country's mobile sector will have 27.281mn mobile subscribers by 2016, up from 21.518mn at the end of 2011. We believe that the strong performance by mobile operators in 2011 was due to promotional deals offers introduced by offered by companies in a bid to defend their market shares amid downside risks from SIM registration and mobile number portability. Meanwhile, the outlook in the country's fixed-line remains unclear, given that operators' subscriber bases continue to fluctuate without a distinct short-term trend. With regard to the broadband market, we have largely retained our forecast, with mobile broadband subscriptions driving growth inover the next few years.
An announcement that Globacom Ghana has earmarked November 17 2011 as the to launch date of its commercial mobile voice and data services and was one of the most important developments in the country's telecoms industry, in addition to the SIM card registration and mobile number portability (MNP) exercise. This came more than three years after the operator won the sixth mobile licence in Ghana. BMI has a positive outlook for Globacom's mobile operations in Ghana despite its seemingly late arrival to the market. We are encouraged by market strategies announced so far by the company, including extensive 3G network coverage and the provision of a facility that would enable prospective customers to reserve their preferred numbers. However, we caution that the operator would need to minimise its roll-out expenses in order to become profitable in a reasonable timeframe, considering the increasing downward pressure on ARPUs and voice revenues. However, Globacom failed to launch its operations on schedule, citing logistics constraints beyond its control. A new launch date was not disclosed at the time of writing, but the firm said that 'it will be very soon.'
Meanwhile, the NCA reported that a total of 138,458 mobile subscribers have used the MNP system at the end of October 2011, four months after commencement. The regulator also noted that the time taken to complete a port fell to less than three hours in October 2011, down from more than three hours in September 2011 and more than four hours in August 2011.
In terms of regulatory developments, the NCA announced in late October 2011 that it will release as many as four broadband wireless access (BWA) licences in the 2500-2690MHz band. The regulator will use a multi-stage selection and award process (a combination of "beauty contest" and negotiations) to select prospective applicants for the award of a BWA License. The minimum reserve price for a 30MHz lot or 2 X15 MHz lot is US$5.5mn.
BMI's Q411 update on Ghana's telecoms market contains revised forecast figures for the country's mobile telephony, broadband and internet sectors. Our forecast is based on June 2011 data as published by Ghana's telecoms regulator, the National Communications Authority (NCA), as well as half- year data published by leading mobile network operators, including MTN Ghana, part of South Africa's MTN Group, Vodafone of the UK and Tigo Ghana, owned by Luxembourg's Millicom International Cellular. It also contains ARPU forecast for the mobile sector based on the weighted average of available ARPU data published by the operators.
The major developments in the Ghanaian telecoms sector as contained in this quarter's update include the extension of the deadline for the completion of mandatory SIM card registration by 90 days from the original date of June 30 2011 and the implementation of mobile number portability (MNP) on July 7 2011. Both developments were expected to temper subscriber growth during 2011 and the remainder of our forecast period through to 2015. However, intensive market and promotional activities by operators in the run-up to the original deadline for SIM registration resulted in better than expected subscriber growth during H111.
According to the NCA, there were net additions of 1.763mn subscribers in H111, bringing the total subscriber base to 19.199mn and mobile penetration to 77.4% by June 30 2011. About 1.208mn subscribers or 68.5% of H111 net additions were in Q211, supporting our view of the impact of promotional activities before the original deadline of SIM registration on subscriber net additions. MTN and Vodafone accounted for 87.6% of net additions during H111. Considering the rapid subscriber growth during H111 and the strong likelihood of a repeat in H211 as operators prepare for a new deadline to be announced by the regulator, we revised our subscriber growth expectations for 2011 and 2012. We expect the market to have about 20.835 mobile subscribers by the end of 2011, reflecting a penetration rate of 84%. We expect growth to slow down into single digits in the latter part of our forecast period, with mobile penetration forecast to reach 95.7% by 2015.
Meanwhile, MNP seems to have taken off in Ghana. According to the NCA, 21,059 subscribers ported their numbers to other mobile operators byJuly 31 2011 following the launch of the MNP service on July 7. Third-ranked Vodafone claimed as many as 43% of ported numbers switched to its network during that period.BMI welcomes the implementation of MNP considering its positive impact on competition in the mobile market and the choice operators have over changing service providers. However, we believe its long-term impact on market dynamics will be limited as the majority of net additions are through new subscriber acquisitions.
We revised down our fixed line forecast this quarter to reflect the continued fluctuation in the fixed-line subscriber base. We forecast slower growth in the fixed-line sector over the next five years, with market penetration reaching 1.3% by 2015. There is no new data on the broadband and internet sector, therefore our forecast for that sector is unchanged this quarter. We maintain our view that wireless access technologies as well as the increase in international bandwidth from submarine cables, will be major growth drivers of internet penetration in Ghana.Ghana moved up to fourth position in BMI's latest Risk Reward Ratings (previously Business Environment Ratings) for Sub-Saharan Africa in spite of a slight downgrade in its Country Risk score.
Ghana's political risk profile is relatively favourable at present, at least in the context of West Africa. However, oil revenues will require careful management and , presenting a will be formidable test for the government over the over the coming next decade. We also note that, in general terms, the political system is relatively young and untested. Multi-party democracy has only existed since 1992, prior to which Ghana suffered a string of coups. Against this backdrop, continued political stability is by no means assured over the coming years. Moreover, Ghana is now producing its own oil, and the management of the attendant revenues is likely to prove a critical test of the political system.
Click for Report details:Ghana Telecommunications Report Q1 2012
