Company Trend Analysis - New MVNOs To Drive Market Transformation - AUG 2017

BMI View: New MVNO players will contribute to transforming the Senegalese market from pric e to service-oriented competition. These new entrants will allow n etwork operators to invest further in developing advanced services to grow revenues , when a new network operator would just exacerbate price competition.

The ARTP, the Senegalese telecoms regulator, has issued three MVNO licences to You Mobile, Sirius Telecoms Afrique and Origines SA. The three were selected out of nine applicants, and they will operate on the networks of Orange, Tigo and Expresso respectively. You Mobile offered XOF400mn (USD0.68mn) for the licence, while the other two offered XOF300mn (USD0.51mn). You Mobile is owned by Senegalese musician Youssou Ndour, while Sirius Telecoms Afrique is owned by real estate businessman Mbackiyou Faye and Origines SA is owned by media tycoon El Hadj Ibrahima Ndiaye. We had not expected such success for MVNO licensing, but we still do not believe all three players will be able to establish themselves in the market (See ' MVNO Licensing Best Way Forward For Market ' April 20 2017).

We believe the entry of these MVNOs will be largely beneficial for the Senegalese market. They will use some of the unused network infrastructure and generate extra revenues for the network players, who would in turn be able to invest in development of more advanced services. As MVNOs typically address the low-cost end of the market, mobile network operators (MNO) will have to compete in value-added services rather than pricing. We believe this might be a key reason why the ARTP licensed one MVNO to operate in each network, to allow a shift of their strategy.

Little Room For Organic Growth
Senegal - Mobile Phone Subscriptions
f = BMI forecast. Source: BMI, operators

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