The number of cellular subscribers in Africa and the Middle East increased 76 percent between 1990 and 1995, reported Pyramid Research Inc. in a recent study. Cellular subscribers totaled 1.8 million at the end of last year, and are expected to count 11.2 million by 2000.
Pyramid said such growth is fueled by increased competition and network launches in Israel, Lebanon, Turkey, Saudi Arabia and South Africa. Turkey and Saudi Arabia are expected to support more than 2.9 million subscribers by 2000, added the Cambridge, Mass-based firm.
Traditionally, African and Middle Eastern nations have opposed private business involvement in public utilities, said Pyramid. But increased liberalization of markets-driven chiefly by financial need-has resulted in 32 private cellular operations licensed since 1990.
Many domestic operators are looking to foreign companies, particularly from Europe, with expertise in all aspects of wireless service and operation. European influence is the primary reason Global System for Mobile communications is the de facto standard for digital service in Africa and the Middle East, said Pyramid.
However, outside of Israel, Lebanon and Turkey-each with two private operators-and Jordan, which has one private operator, countries in the Middle East, including Saudi Arabia, have only one cellular operator owned by the government.
Israel is among the region’s most competitive markets, with two cellular operators and some of the lowest subscriber tariffs in the world, said Pyramid. The country’s second operator won its license through an international tender and a third license is expected to be tendered later this year.
The Israeli telecommunications authority is requiring all operators to migrate to GSM by 1998 and GSM networks have been launched in five Gulf countries. Lebanon bypassed analog altogether, licensing two GSM operators.
Ghana and Tanzania, at one time completely closed off from private investment, each have two private cellular companies, said Pyramid. In 1995, one Zimbabwe company championed private entry into telecommunications, breaking the government’s monopoly on cellular service. In Uganda, plans call for making the Post Telephone and Telegraph private and introducing a second provider for basic and cellular telephony services this year.
In the sub-Saharan southern region of Africa, politics play a large role in privatization, noted Chapelier. Observing successes of two private digital cellular operators in South Africa, nations including Namibia, Lesotho and Malawi have one private GSM operator. South Africa is expected to license a third private operator, of cellular or personal communications services, next year.
Pyramid forecasts the Middle East’s first PCS networks will appear in the next few years in Gulf countries and in Israel.
African companies that are increasing participation in other markets include Vodacom of South Africa, and Bezeq, Telecel International and Celtel of Ghana, said Pyramid. Foreign investors include Millicom International, Vodafone plc, Cable & Wireless plc, Telecom Finland, TRI and Telekom Malaysia. Pyramid added L.M. Ericsson, Motorola Inc. and Siemens AG are leading equipment suppliers to the region.
