The reduction in prices as a result of intense competition between mobile and fixed operators is fuelling the uptake of broadband services in Southern Africa.
"In Mozambique, the entrance of a third mobile operator, Movitel, is spurring the market by targeting rural areas and low-income groups with lower prices than its competitors," saidFrost & Sullivan Information & Communication Technologies Industry Analyst Naila Govan-Vassen. "Meanwhile, in Namibia, service providers prefer to focus on data services as a new stream of revenue due to the saturation of the voice business."
Namibia is also witnessing the development of a highly integrated broadband market, with fixed operators offering mobile services through code division multiple access (CDMA) and global system for mobiles (GSM) networks, along with fixed broadband using asymmetric digital subscriber line (ADSL) networks. In Mozambique, however, companies must create a need for the service to retain existing users as well as attract new customers.
Infrastructural developments in new regions also bode well for the Southern African market as they enable market participants to bring affordable broadband services to prospective customers. In addition, the laying of submarine fibre cables in Mozambique and Namibia is expected to reduce the price of bandwidth and, therefore, make broadband economical in the long term.
While on the one hand bandwidth prices may decline; on the other, network operators are dealing with escalating operating costs owing to inconsistent power supply, which also affects the quality of service and hampers adoption. High levels of poverty and illiteracy also hamper market growth, although governments' efforts to improve access to education may mitigate this restraint to some extent.
"To survive in this increasingly competitive and integrated market, companies need to place emphasis on product differentiation and innovation," concluded Govan-Vassen. "Service providers in both countries can further expand their subscriber base by providing high-speed internet, enhancing digital awareness, and developing digital devices to meet the demand of the rural masses."
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