Industry Trend Analysis - Fourth Operator Welcomed But No Room For More - NOV 2017

BMI V iew: A fourth mobile operator would bring in much needed competition , but given the already low revenues, benefits would require a long commitment and significant investments to increase subscribers by expanding into underserved and rural areas. Licensing any more providers would negate those benefits.

The Zambian government has decided to license a fourth mobile operator in an effort to enhance competition and bring down prices. It has also not ruled out the possibility of licensing a fifth player. In response, the Vodafone Group is preparing to make a bid, anticipating that the concession would allow it to add voice services to its existing data offering, which is currently provided through local partner Afrimax. We consider the partnership to be a credible bidder, despite recent disputes with the regulator centred on Vodafone's efforts to provide wireless broadband services through Afrimax.

The measure follows the Ministry of Transport and Telecommunications' June 2017 decision to develop a unified licensing regime for the telecoms sector ( s ee ' MTN, Zamtel Best Placed To Exploit Unified Licensing ' June 26 2017). Reduced licensing fees and the ability to offer a wider range of services would encourage new players to enter the market, and we expect interest in a fourth unified services licence to be high, despite potential investment risks.

No Room For Fifth Player In Saturated Market
Zambia Mobile Market Forecast 2015-2021
f = BMI forecast. Source:ZICTA, BMI

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