Omdia View: April 2024

In the Middle East and Africa, one key highlight in April was the National Communications Authority (NCA) of Ghana awarding an operating license to Starlink, the satellite broadband service by SpaceX, adding to the list of African markets where the satellite service is commercially available.

Meanwhile, in Tanzania, Vodacom acquired Smile Communications – a move that will supply the country's leading network operator with additional spectrum to expand its 4G and 5G network coverage.

In Ethiopia, the telecom industry regulator announced new call and SMS termination rates aimed at boosting competition and growth in the market.

In the Middle East, Bahrain's leading telecom operator, Batelco, initiated discussions to trial sixth-generation (6G) connectivity and Virgin Mobile UAE partnered with UAE PASS to launch a new digital eSIM onboarding process, the first in the UAE.

Here are Omdia's top telecoms highlights for April 2024 across the Middle East and Africa.

Ghana licenses Starlink to provide satellite broadband services

— by Danson Njue, Omdia senior research analyst, Middle East and Africa.

On April 25, 2024, Ghana's regulator, the NCA, approved the application of Starlink GH Ltd, the local subsidiary of US company Starlink, to provide satellite broadband services in the country.

According to the NCA, the move follows the approval of the Satellite Licensing Framework in Ghana by the Ministry of Communications and Digitalisation.

The NCA said that the administrative processes for the issuance of the license are ongoing and will be completed soon.

The licensing of satellite telecom operators in Ghana is part of the measures the government has put in place to enhance the reliability and quality of broadband services following the recent disruption there to Internet connectivity after the failure of subsea fiber-optic cables.

In December 2023, the NCA had warned against the illegal sale and use of Starlink services.

According to Starlink, the service is commercially available in Africa across: Zambia, Malawi, Rwanda, Nigeria, Ghana, Mozambique, Eswatini, Kenya, Mauritius, and Benin – while Botswana is in discussions to bring the service to the country.

Vodacom Tanzania acquires Smile Communications

— by Danson Njue, Omdia senior research analyst, Middle East and Africa.

On April 3, 2024, Tanzania's biggest converged telecoms operator, Vodacom Tanzania, completed the acquisition of Smile Communications Tanzania Limited for 68.8 billion Tanzanian shillings (US$26.5 million).

The acquisition follows an agreement between Vodacom Tanzania, Smile Telecoms Holdings Ltd and Smile Telecoms IP Ltd to acquire 100% of Smile's issued share capital.

The acquisition will add to Vodacom's spectrum assets and boost its 4G and 5G network rollout plans in the country by leveraging Smile's 800MHz and mid-band spectrum and 4G LTE network.

In October 2022, Vodacom spent $63.2 million to acquire spectrum in the 700MHz, 2300MHz and 2600MHz frequency bands through an auction conducted by the regulator. The operator's spectrum holding also includes 900MHz, 1800MHz, 2100MHz and 3500MHz.

According to Omdia market data, Vodacom is Tanzania's leading mobile operator by subscriptions' market share, with 21.3 million subscribers and a 30.4% market share at end of 2023.

Tigo and Airtel follow closely behind, with 19.5 million and 19.2 million, accounting for 27.9% and 27.3% of mobile subscriptions, respectively.

Ethiopia announces new call and SMS termination rates

— by Danson Njue, Omdia senior research analyst, Middle East and Africa.

On April 15, 2024, the Ethiopian Communications Authority (ECA) published new mobile and fixed call and SMS termination rates aimed at boosting competition and growth in the market.

The regulator has set the new termination rates at 0.23 Ethiopian Birr ($0.004) per minute for mobile, ETB0.15 for fixed, and ETB0.05 per SMS. The new rates took effect on May 1, 2024 and will gradually decline over the next five years to ETB0.19, ETB0.12, and ETB0.04 for mobile, fixed and SMS, respectively, by 2029.

According to the ECA, the determination of the new rates is based on a cost study it conducted following an interconnection agreement between Ethio Telecom and Safaricom Ethiopia in 2022 that set mobile and fixed termination rates at ETB0.31 per minute.

The study was implemented based on a top-down, fully allocated cost (TD-FAC) model, and the rates provide a price cap, hence network operators can negotiate lower termination rates where necessary.

The regulator aims to establish a level playing field for all telecom operators in a bid to boost competition and growth.

According to Omdia market data, Ethiopia had 74.8 million mobile subscriptions and a penetration rate of 59.1% at the end of 2023, projected to increase to 111.1 million and 77.8%, respectively, by 2028.

Batelco explores 6G connectivity in Bahrain

— by Walaa Ibrahim, Omdia senior research analyst, Middle East and North Africa.

Batelco, Bahrain's leading telecom operator, has initiated discussions to trial 6G connectivity.

Batelco is focused on achieving speeds exceeding one terabit per second (Tbit/s). This is a significant improvement over 5G, which typically offers speeds in the tens of gigabits per second (Gbit/s) range.

The trial also explored the potential of 6G for applications such as augmented reality (AR) and virtual reality (VR).

Batelco's 6G trials aim to achieve mobile speeds exceeding one terabit per second (Tbit/s). (Source: Image by freepik)

Batelco has a history of being at the forefront of technological advancements in Bahrain. In 2017, Batelco completed the first 5G trial and in 2019 the company launched its 5G network.

Today, Bahrain boasts 5G network coverage in most urban areas, with a 5G mobile penetration rate of more than 73.5%.

Emerging technologies such as smart cities, driverless cars and VR are poised to benefit from 6G and it is expected to lead to a boom in the artificial intelligence (AI) industry.

Virgin Mobile UAE partners with UAE PASS to introduce a digital eSIM service

— by Walaa Ibrahim, Omdia senior analyst for the Middle East and North Africa.

Virgin Mobile UAE has announced a collaboration with UAE PASS to offer a new digital eSIM onboarding process as a market first in the United Arab Emirates as part of the company's strategy to fully digitalize the customer connectivity journey. This initiative eliminates the need for physical store visits.

The new onboarding process utilizes UAE PASS, the country's secure national digital identity solution. Customers can sign up for Virgin Mobile UAE services directly through the app, with verification handled through their existing UAE PASS credentials.

This integration aims to streamline the onboarding process and potentially reduce wait times, while the use of eSIM technology eliminates the need for physical SIM cards, potentially reducing the environmental impact.

By leveraging the capabilities of the UAE PASS, Virgin Mobile UAE enhances its own digital ecosystem and also contributes to the broader digital transformation agenda of the UAE.

This collaboration underscores the potential for public-private partnerships to drive innovation and foster efficiency in service delivery across diverse sectors.

From a customer perspective, this initiative offers added convenience, particularly for tech-savvy individuals who value digital efficiency.

However, the long-term impact on the traditional SIM card model remains to be seen. Factors such as smartphone compatibility with eSIM technology and customer comfort with the digital onboarding process will play a role in determining how widespread is its adoption.

Looking forward, the success of this initiative could influence the practices adopted in future by other operators within the market.

You can find Omdia's full Middle East & Africa News Digest here.

For more information about Omdia's consulting capabilities, contact them directly at [email protected] or reach out to the Omdia analysts by emailing [email protected].

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