Tuesday, 10 July 2012

H1 2012 African telecoms investment

I've completed my analysis of the trends in African telecoms for the first half of the year and thereby amended my forecast for the remainder of 2012.

Overall, investment was up 54% over the same period last year, however it remains 33% down on H1 2010.

As the table shows, much of this decline is due to the destabilising effects of the Arab Spring, which has almost completely halted investment in North Africa. In 2010 and 2009 countries in this region accounted for a third of all investment in the continent. In 2011 they represented 3% of the total and are on track to be the same this year.
Overall only Central African countries are likely to show an uptick in investment from 2010, driven by the nascent emergence of the continent's third most populous country - the DRC - and coincident investment by telecoms groups who are keen to find a non-Nigerian market to focus on.

The market I'm most worried about is Kenya, so long a leader in digital Africa, but now, thanks to ill judged market interventions by government and regulator an increasingly unattractive destination for inbound investment in vital infrastructure.

Any growth is good growth. That said, there are warning signs about the readiness of African countries to create conditions suitable for large scale infrastructure investments. With more and more bandwidth landing on their shores, barriers to digital economies are falling and opportunities to lead are rife.

The location of the next "silicon savannah" is not predetermined. In my view, countries like Namibia, Tanzania and Rwanda are taking over from Kenya as the likely leaders in the next phase of African tech' emergence.

Nairobi needs to loosen the reins before the horse bolts from under them.

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