Mobile saturation in Africa

I’ve been saying it for awhile, but in different ways that the rich mobile fields so many want to tap in Africa aren’t actually all that rich after all. In fact, this article claims that they’re at a saturation point, which I would agree with.

A decade ago, an African GSM license was an attractive ticket for international investors to enter a market with huge profit potential. But most regulators on the continent have found ways to raise money by licensing more GSM spectrum and fixed line operators, with the argument that competition would drive down cost of services. It has done that, but has also meant continued struggles for smaller, newer companies.

There’s also the fact that if you can’t cut costs any further, then you cut service and supposedly government are working to make sure that network operators maintain a quality level of service for the customers. To this I have to say, “Yeah. Right.” Dropped calls and weak call quality are the norm wherever I’ve been in Ghana, Côte d’Ivoire, and Mali. Yeah, I always have a signal wherever I go, but as to being able to actually use that signal, often is a mixed bag of results.

Some observes say that even with the sector in flux, international investments are not likely to dry up, as some have feared.

This I completely agree with. The mobile market in Africa is a tasty market for investors. They’re able to outlay a smallish amount of cash for a tremendous return that just keeps coming. It is an extraction economy. You don’t have to work to really build out that much (just a cell tower here and there). There is no development of a brick and mortar business selling a product, just a few splashy billboards around town. You’re selling a signal and that’s it. So naturally investors will still want to pour money in to African mobile projects. It’s just that all that hype you hear about this work is just that and at some point very soon, the market will indeed be tapped out and investors might actually have to look for real, sustainable businesses to work with as opposed to non-essential things like mobile. I’m just glad to see that I’m not the only one saying this.