ht market assessment• ht is a trusted partner of the mnos. airtel (congo-b, drc) tigo (ghana,...
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1
Helios Towers:
Sub-Saharan Africa Tower Market Assessment
And Lease Up AnalysisDoc Ref: HTL HT Market Report 2019 31082019 r14
© Hardiman Telecommunications Ltd. 2019 All Rights Reserved
2
Hardiman Telecommunications Limited (hereinafter referred to as “HTL”) was engaged by Helios Towers Africa Limited (hereinafter referred to as “HT”) to
undertake a mobile market and towers market assessment, to forecast HT tenancies in Tanzania, Ghana, the Republic of the Congo and the Democratic
Republic of the Congo and to undertake a mobile market and towers market assessment in South Africa and Nigeria as per our letter of engagement. This report
(hereinafter referred to as the “Report”) presents the findings of our assessment. Our duty of care and sole liability is to HT and to no other party.
In undertaking the assessment HTL was provided with access to information provided by HT management. This Report was prepared by HTL on the basis of
information provided by HT and from third party sources. HTL's remit did not encompass assessment of the veracity or validity of the information provided. While
HTL has satisfied itself that the information contained in the Report is consistent with other information received, HTL makes no representation as to the veracity
or validity of information referenced, assessed and/ or analysed.
Some of the key findings of the Report are based on views of mobile market development, network investment, technology evolution and operating practices as
deduced from information received. HTL accepts no responsibility for the actual realisation of any market or investment forecasts or HT’s performance. Actual
results are likely to be different from those shown in this assessment of the prospective markets because events and circumstances frequently do not occur as
expected and the difference may be material.
This document does not constitute investment or financing advice to any party nor does it make recommendations as to whether HT should or should not
proceed with its intended plans for the business.
Page
3HARDIMAN TELECOMMUNICATIONS LIMITED3
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
4HARDIMAN TELECOMMUNICATIONS LIMITED 4
• Mobile subscriber growth is forecast for each of the markets in which HT has operations.
• Additionally in each of these markets the main MNOs are deploying 3G and 4G technologies to support the growing demand
for mobile data services. The adoption and consumption of mobile data services is increasing across all SSA mobile markets.
• The growing subscriber numbers and demand for mobile data services requires that the MNOs continue to build out network
infrastructure and build new points of service (PoS).
• HT has been operating in Africa since 2010. In that time it has built a portfolio of 6,745 active sites through acquisition and Build
to Suit and by the end of 2018 was hosting 13,014 tenants (not including South Africa).
• In 2018, despite MNO consolidation in two of the markets of operation, HT active sites grew by 3.5% and tenancies grew by
4.2% (not including South Africa).
• HT is a trusted partner of the MNOs. Airtel (Congo-B, DRC) Tigo (Ghana, Tanzania, DRC) and Vodacom (Tanzania) have sold
their tower portfolios to HT.
• Additionally all the major MNOs in their markets of operation use HT to build new sites (“B2S” or Build to Suit) and are colocated
on HT towers.
• In three of HT’s markets of operation (DRC, Tanzania and Congo-B) it is the only independent TowerCo. Ghana has three
independent TowerCos (HT, American Tower and Eaton Towers, nevertheless the potential for lease up on the HT towers in
Ghana is good given its urban weighted portfolio and HT has secured notable B2S contract wins.
• Zonal analysis of the HT towers indicates that they are well located and are good candidates for MNO lease up.
Growing mobile
markets driving the
demand for mobile
towers.
HT is well
established and is
the trusted partner of
all the major MNOs.
Executive Summary – Key Takeaways
Incremental Subscribers 2018-2024 Incremental PoS 2018-2024
Tanzania 14.4m 5,084
DRC 24.9m 3,829
Ghana 5.5m 2,740
Congo-B 1.2m 375
South Africa 8.4m 7,020
Source: HT Management, HTL Analysis
Page
5HARDIMAN TELECOMMUNICATIONS LIMITED5
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
6HARDIMAN TELECOMMUNICATIONS LIMITED 6
40.0
43.5 45.9
48.2 50.7
53.2 55.6
57.9
0
10
20
30
40
50
60
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
Tanzania Mobile Subscriptions Forecast (m)[Hardiman Analysis]
Tanzania – Summary – Mobile Market
Mobile market is forecast to grow to 57.9m by 2024
Tanzania’s mobile market grew strongly during 2018: 3.5 m subscriptions (+9% YoY).
We expect the Mobile market to grow to 57.9m by 2024 (2018-2024 CAGR of +4.9%) – an average of 2.4m new net adds per year over the forecast period.
Continued strong subscriber growth is projected for Vodacom and Tigo.
Source: Regulator, MNO, Hardiman Analysis
9.4 9.4 10.3 11.8 12.7 12.4 12.9 14.1
5.5 6.0 6.08.2
10.4 11.7 11.112.6
1.5 3.1 1.81.7
1.4 1.1 0.91.2
7.08.4 9.0
9.611.0 10.5 10.9
11.01.2
3.4 3.8
3.91.6 0.8 0.1
0.1
0.10.1 0.1
0.2
0.2 0.2 0.30.6
23.526.9 27.1
31.4
38.540.0 40.0 43.5
0
10
20
30
40
50
60
2011 2012 2013 2014 2015 2016 2017 2018
Tanzania Mobile Market Subscriptions (m)
Vodacom TiGO Zantel Mobile Airtel Halotel Smart TTCL Mobile
33%
29%3%
25%
9%
0% 1%
Tanzania Mobile Subscriber Market Share YE2018
Page
7HARDIMAN TELECOMMUNICATIONS LIMITED 7
DRC – Summary – Mobile Market
Mobile market is forecast to grow to 62.6m by 2024
Mobile market is recovering from steep decline in penetration during 2016, when the number of mobile subscriptions declined by 9 m. The integration of
Tigo by Orange is now complete. Both Vodacom and Orange launched 4G services in 2018. We anticipate that Airtel and Africell will deploy 4G
equipment in the future. Assuming no material deterioration in political and macroeconomic conditions in the medium term, we project mobile market to
grow to 63 m by 2024 – an average of 4.2 m new net adds per year.
Decrease due to eeffects of:
• Ddeactivation of inactive SIMs by MNOs
• SIM registration requirements
Source: Regulator, MNO Data, Hardiman Analysis
5.1 7.1 8.811.5 11.8 9.7 12.0 12.8
6.27.4
7.6
9.2 8.16.8
9.310.3
2.4
3.03.9
5.1 5.3
1.5
1.81.8
4.3 5.3
7.3
9.110.6
0.0
0.9
3.7
7.0 5.8
3.9
3.5
4.0
15.3
20.3
25.8
37.1 36.3
27.6
33.8
37.7
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017 2018E
DRC Mobile Subscriptions by Operator (m)
Vodacom Airtel Tigo Orange Africell
Vodacom34%
Orange28%
Airtel27%
Africell10%
DRC Mobile Subscriber Market Share YE 2018 E
12.0 12.8 14.05 15.2 16.4 17.7 19.0 20.4
9.3 10.311.33
12.413.6
14.916.2
17.69.1
10.611.06
12.113.3
14.515.8
17.2
33.8
37.740.9
44.8
48.9
53.3
57.9
62.6
0
10
20
30
40
50
60
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024F
DRC Mobile Market Subscriptions Forecast[HTL Analysis]
Page
8HARDIMAN TELECOMMUNICATIONS LIMITED 8
Ghana – Summary – Mobile Market
Mobile market is forecast to grow to 44m subscriptions by 2024
Mobile penetration in Ghana is among the highest in Sub-Saharan Africa: estimated 129% at YE 2018. It is a vibrant mobile market with four established
international MNOs active. MTN is the market leader. Airtel-Tigo merged in October 2017, creating a strong challenger to Vodafone for 2nd position in
market. The number of subscriptions declined sharply in 2017. However, market growth resumed in 2018 and is forecast to continue – driven by the
demand for data services. This will drive demand for additional operator PoS.
Source: Regulator, MNO, Hardiman Analysis
11.7 12.9 13.916.3
19.315.7 17.7
5.36.0
7.17.6
8.3
9.09.8
3.74.0
4.1
4.9
5.3
3.23.4
3.7
4.8
4.6
9.7
10.3
1.61.5
1.5
1.4
0.7
0.8
0.7
25.628.0
30.4
35.0
38.3
35.2
38.5
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015 2016 2017 2018E
Ghana Mobile Market Subscriptions by Operator (m)[Sources: MNOs, NCA, HTL Analysis]
MTN Vodafone Tigo Airtel AirtelTigo Glo Mobile Expresso
46%
25%
27%
2%
Ghana Mobile Subscriber Market Shares at YE2018E (%)
15.7 17.7 18.5 19.1 19.5 19.7 19.9 20.1
35.2
38.540.1
41.4 42.4 43.0 43.5 44.0
0
5
10
15
20
25
30
35
40
45
50
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024
Ghana Mobile Market Subscriptions Forecast (m)[HTL Analysis]
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024F
Page
9HARDIMAN TELECOMMUNICATIONS LIMITED 9
Congo-B – Summary – Mobile Market
Mobile market is forecast to grow to 6.0m subscriptions by 2024
Azur exited the mobile market in Congo-B in 2018. Prior to Azur’s exit MTN and Airtel had an effective duopoly – the Azur exit had limited impact
Mobile subscriber numbers are forecast to grow by 1.2m between 2018 and 2024.
Source: Regulator, MNO, Hardiman Analysis
1.7 1.8 2.0 2.2 2.4 2.5 2.5
1.7 1.5
2.2 1.92.1
2.3 2.30.6 1.10.2
0.3 0.4 0.30.3
0.24.3
4.74.6 4.4 4.8
5.1 4.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0
1
2
3
4
5
6
2012 2013 2014 2015 2016 2017 2018
Congo B Mobile Subscriptions by Operator (m)
MTN Airtel Warid Azur
MTN51%
Airtel49%
Congo B Mobile Subscriber Market Share (%) YE 2018
2.5 2.5 2.6 2.7 2.8 2.9 3.0 3.1
2.3 2.32.4
2.52.6
2.7 2.8 2.8
5.1 4.85.0
5.2 5.4
5.6 5.86.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0
1
2
3
4
5
6
2017 2018 2019 2020 2021 2022 2023 2024
Congo B Mobile Market Subscriptions Forecast (m)[Hardiman Analysis]
MTN Airtel Azur
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
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10HARDIMAN TELECOMMUNICATIONS LIMITED 10
South Africa – Mobile Market – Overview
Vibrant market, including four major operators. Mobile penetration is high: 179%.
South Africa’s mobile market is highly penetrated: 179% at YE 2018 (103 m subscriptions). There are four significant operators active in South Africa:
Vodacom, MTN, Cell C and Telkom SA. In addition there is an active MVNO segment: currently most MNVOs are hosted on the Cell C network.
• South Africa has four significant operators: Vodacom, MTN, Cell C and
Telkom SA. All operators are achieving subscriber growth.
• Penetration is extremely high: 174% at YE 2018 (100 m mobile
subscriptions in a population of 58 m).
• Mobile ARPU is high relative to other SSA markets: Vodacom reported
ARPU of ZAR 95 ($US 7.0) in 3Q2018; MTN reported ZAR 98 ($US 7.1)
for the same period.
• Vodacom is market leader by subscriptions: 43.8m subscriptions at YE
2018: +2.2 m net adds YoY (+5.4%).
• MTN has the second largest share. MTN benefited from a very strong final
quarter in 2018. It reported with 29.5m subscriptions at end 3Q2018 but
added 1.7m subscribers in Q4 to finish the year at 31.2m.
• The subscriber base of 3rd MNO Cell C declined steeply during 2015
Modest subscriber growth has resumed. Blue Label Telecoms acquired a
45% stake in Cell C for ZAR 5.5b in mid-2017 as part of the mobile
operator’s recapitalisation plan.
• 4th operator Telkom SA has achieved strong subscriber growth since 2016.
It reported 5.2m subscriptions at end March 2018. Between March 2018
and March 2019 the Telkom mobile customer base increased by 86% to
9.7m. Year end 2018 subscriber estimate is 8.6m
• South Africa features a dynamic MVNO segment, with up to 10 active
players. The most high-profile MVNOs are Virgin Mobile, Hello Mobile,
FNB (First National Bank) Mobile and most recently Lycamobile. To date
most MVNOs in the South African market have been hosted on the Cell C
network.
Source: Regulator, MNO, Hardiman Analysis
68.874.4
83.5 82.588.4
94.8102.6
129%137%
152% 148%157%
167%179%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
0
20
40
60
80
100
120
2012 2013 2014 2015 2016 2017 2018
South Africa Mobile Subscriptions (m) and Penetration (%)
Subscriptions (m) Mobile Penetration (%)
29.5 31.0 31.4 34.1 36.4 41.6 43.8
25.4 25.7 28.030.6 30.8
29.5 31.210.113.6
19.6 12.815.3
16.317.2
1.51.7
2.1 2.63.6
4.98.6
…
2.4
2.4 2.4 2.4
2.5
1.8
68.8
74.48… 82.5
88.494.8
102.6
0
20
40
60
80
100
120
2012 2013 2014 2015 2016 2017 2018
South Africa Market Subscriptions (m)
Vodacom MTN Cell C Telkom SA Other
Page
11HARDIMAN TELECOMMUNICATIONS LIMITED 11
Mobile Market – Unique Subscribers
32%
37%
40%
41%
44%
45%
46%
48%
49%
49%
50%
51%
53%
67%
Niger
DRC
Tanzania
Angola
Uganda
Burkina Faso
Zambia
Rwanda
Nigeria
Congo B
Cameroon
Kenya
Ghana
South Africa
Unique Subscriber Penetration (YE 2018E)Source: GSMA 1Q2019
1.1
1.3
1.3
1.3
1.6
1.6
1.6
1.8
1.8
1.8
2.0
2.2
2.4
2.5
Angola
Uganda
DRC
Niger
Cameroon
Nigeria
Rwanda
Tanzania
Kenya
Zambia
Congo B
Burkina Faso
Ghana
South Africa
SIMs per Unique Subscriber (YE 2018E)Source: GSMA 1Q2019
Page
12HARDIMAN TELECOMMUNICATIONS LIMITED12
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
13HARDIMAN TELECOMMUNICATIONS LIMITED13
Tower Sector – Tanzania, DRC and Congo-B
• An Independent TowerCo has been active in Tanzania since 2010 when
HT acquired 1,020 towers from Tigo. HT subsequently acquired 1,149
towers from Vodacom and has built to suit more that 1,278 towers for
Vodacom and Tigo.
• HT has been active as the sole independent TowerCo in DRC since 2010.
It entered the market by acquiring towers from Tigo.
• HT has further consolidated their market leading position in DRC with the
acquisition of 696 towers from Airtel in 2016. As part of this contract HT
also acquired management rights over an additional 271 Airtel sites. Since
2016 HT has acquired 200 of these sites and expects to fully acquire these
the remaining sites.
• HT entered the Congo B market in 2015 following the acquisition of 369
greenfield towers and 24 rooftop towers from Airtel. HT is the only
independent towerco active in the market.
• Infrastructure sharing was a feature of the market prior to the entry of HT.
34%, 40% and 90% of MTN, Azur and Airtel PoS are colocated on 3rd
party sites – Airtel proportion of colocated PoS is highest as a result of the
HT transaction.
1. Source: HT, MNOs
380, 49%
298, 39%
47, 6%
48, 6%
Marketable Towers Congo-B YE 2018 Estimate
1,773 , 63%
737 , 26%
250, 9%
42, 2%
Marketable Towers DRC 2018
2,802
Marketable
Towers
3,613 , 64%
Tigo, 344 , 6%
1,399 , 25%
200 , 4%Smart, 54 , 1%
Marketable Towers Tanzania 20181
5,610 Marketable
Towers
773
Marketable
Towers
Page
14HARDIMAN TELECOMMUNICATIONS LIMITED14
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
15HARDIMAN TELECOMMUNICATIONS LIMITED 15
HT Tanzania – Market Demand
An additional 5,084 operator PoS estimated to support the forecast subscriber growth
Mobile subscriber numbers are forecast to grow by 14.4 m between 2018 and 2024.
Growing mobile subscribers and site deployment required to support data demand will drive the demand for new operator PoS – 16,920 forecast for
2024
• Tanzania’s mobile market grew
strongly during 2018: 3.5 m
subscriptions (+9% YoY).
• Mobile penetration at YE 2018 was
72% - below the average sub
Saharan African penetration level of
73%.
• Halotel, the most recent entrant,
subscriber growth slowed
significantly in 2018.
• We forecast that subscriber growth
will be sustained throughout the
period 2018 to 2024.
• Mobile penetration is expected to
grow from 72% in 2018 to 81% in
2024.
• Mobile subscriber growth is a driver
of demand for additional Operator
PoS.
• Continued roll-out of 3G and higher
uptake of recently launched 4G
services are projected to drive further
subscriber growth and is expected to
drive some site densification.
11,836 12,50213,203
13,93614,716
15,66716,920
2018 2019 2020 2021 2022 2023 2024
MNO PoS Forecast
12.9 14.1 14.9 15.7 16.5 17.2 18.0 18.7
12.0 13.7 14.5 15.2 16.0 16.6 17.1 17.6
10.9 11.0
11.3 11.7
12.1 12.4
12.8 13.1
3.8 3.9
4.1 4.3
4.5 4.8
5.1 5.4
40.0
43.5 45.9
48.2 50.7
53.2 55.6
57.9
0
10
20
30
40
50
60
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
Tanzania Mobile Subscriptions Forecast (m)[Hardiman Analysis]
Source: Regulator, MNO, Hardiman Analysis
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
16HARDIMAN TELECOMMUNICATIONS LIMITED 16
HT DRC – Market Demand
An additional 3,829 operator PoS estimated to support the forecast subscriber growth
Mobile market subscriber numbers in the DRC grew 6.2 m in 2017 – The 3 largest MNOs all reported large subscriber increases.
Market growth was sustained through 2018 and is forecast to continue. Mobile subscriber numbers are projected to grow by 24.9m between 2018 and
2024.
Growing mobile subscribers and MNO planned network investments are expected to drive the demand for new operator PoS – 9,470 forecast for 2024
• The mobile market in DRC dipped
in 2016 as a result of a number of
factors:
• 2017 witnessed a return to
subscriber growth. Net market
adds of 6.2m were reported for the
year. The 2017 growth was
sustained through 2018.
• Mobile penetration in DRC is very
low – 44% at year end 2017.
• We forecast the mobile penetration
will grow to 61% by 2024.
Source: Hardiman Analysis
8.8
8.0
7.0
33.4
5,6416,168
6,6897,323
7,9348,625
9,470
2018 2019 2020 2021 2022 2023 2024
MNO PoS Forecast
12.0 12.8 14.05 15.2 16.4 17.7 19.0 20.4
9.3 10.311.33
12.413.6
14.916.2
17.69.1
10.611.06
12.113.3
14.515.8
17.2
3.5
3.954.46
5.0
5.6
6.2
6.8
7.5
33.8
37.740.9
44.8
48.9
53.3
57.9
62.6
0
10
20
30
40
50
60
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024F
DRC Mobile Market Subscriptions Forecast[Hardiman Analysis]
Source: Regulator, MNO, Hardiman Analysis
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
17HARDIMAN TELECOMMUNICATIONS LIMITED 17
HT Ghana – Market Demand
An additional 2,740 operator PoS indicated to support the forecast subscriber growth
Mobile subscriber numbers are forecast to grow by 5.5 m between 2018 and 2024.
Growing mobile subscribers and data related site densification will drive the demand for new operator PoS – 10,555 forecast for 2024
• The mobile market is Ghana is
mature and has entered a market
consolidation phase.
• In 2017 Airtel and Tigo announced
that they would merge to form a
single opco Airtel-Tigo.
• The mobile market contracted in
Ghana in 2017.
• Market growth resumed in 2018
and further growth is forecast
• MNO POS numbers were
impacted by the consolidation. The
combined Airtel-Tigo network
reduced POS numbers from 2,441
in 2017 to 1,617 in 2018.
• Much of the MNO network activity
is expected to be driven by the
rollout of 3G and 4G networks
15.7 17.7 18.5 19.1 19.5 19.7 19.9 20.1
9.09.8 10.1 10.4 10.7 10.9 11.1 11.3
9.7
10.310.8 11.1 11.4 11.6 11.8 12.0
35.2
38.540.1
41.4 42.4 43.0 43.5 44.0
0
5
10
15
20
25
30
35
40
45
50
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024
Ghana Mobile Market Subscriptions Forecast (m)[HTL Analysis]
7,8158,251
8,6699,088
9,54410,021
10,555
2018 2019 2020 2021 2022 2023 2024
MNO PoS Forecast
Source: NCA, MNO, Hardiman Analysis
2018 2019F 2020F 2021F 2022F 2023F 2024F
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024F
Page
18HARDIMAN TELECOMMUNICATIONS LIMITED 18
HT Congo-B – Market Demand
Modest market growth will drive the demand for an additional 375 operator PoS
Mobile subscriber numbers are forecast to grow by 1.2m between 2018 and 2024
Growing mobile subscribers will drive the demand for new operator PoS – 1,422 forecast for 2024
• Congo-B is effectively a two-player
mobile market : MTN and Airtel.
• Azur made little impact and exited
the market in 2018.
• The mobile market contracted
marginally in 2018 as a result of
the Azur market exit
• Subscriber growth is expected to
resume in 2018 .
• Mobile penetration is expected to
grow from 88% in 2018 to 94% in
2024.
• The forecast subscriber growth is
expected to drive the demand for
additional operator PoS.
Source: Hardiman Analysis
2.5 2.5 2.6 2.7 2.8 2.9 3.0 3.1
2.3 2.32.4
2.52.6 2.7 2.8 2.8
0.215.1 4.8
5.05.2
5.45.6 5.8
6.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0
1
2
3
4
5
6
2017 2018 2019 2020 2021 2022 2023 2024
Congo B Mobile Market Subscriptions Forecast (m)[Hardiman Analysis]
1,0471,101 1,135
1,1931,255
1,3251,422
2018 2019 2020 2021 2022 2023 2024
MNO PoS Forecast
2018 2019F 2020F 2021F 2022F 2023F 2024F
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
19HARDIMAN TELECOMMUNICATIONS LIMITED 19
41.6 43.8 44.2 44.5 44.8 45.1 45.4 45.6
29.531.2 31.3 31.5 31.6 31.8 31.9 32.0
16.317.2 17.4 17.6 17.7 17.9 18.1 18.2
4.98.6 9.9 11.1 12.1 12.6 12.7 12.8
2.5
1.8 1.9 2.0 2.0 2.1 2.2 2.394.8102.6 104.7
106.7 108.3 109.6 110.3 111.0
0.0
20.0
40.0
60.0
80.0
100.0
0
20
40
60
80
100
120
2017 2018 2019 2020 2021 2022 2023 2024
South Africa Mobile Market Subscription Forecast (m)
32,171 33,05834,255 35,364
36,59537,863
39,191
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2018 2019 2020 2021 2022 2023 2024
MNO PoS Forecast
South Africa – Market Demand
Market growth is expected to drive the demand for an additional 7,020 operator PoS by 2024
Mobile penetration is very high in South Africa. Increases in PoS numbers will be driven by demand for high quality data services and increased
utilisation of mobile data services.
Source: Hardiman Analysis
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
• Mobile market subscriptions are
forecast to grow to 111 m by 2024
– an average of 1.4 m new net
adds per year.
• Vodacom, MTN and CellC are
projected to achieve only modest
subscriber growth.
• Telkom is expected to continue to
grow subscribers and market
share albeit at a lower growth rate
that the 49% CAGR achieved
between 2015 and 2018.
• We forecast an additional 8.4m
subscribers will join the South
African mobile market by 2024.
This along with increasing data
usage and infill sites required to
improve data QoS will drive the
demand for an estimated additional
7,020 PoS to accommodate growth
in voice and data traffic..
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
20HARDIMAN TELECOMMUNICATIONS LIMITED20
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
21HARDIMAN TELECOMMUNICATIONS LIMITED 21
11,424 11,879 12,350 12,830 13,331 13,964 14,777
8,0409,571
11,17612,547
13,21713,859
15,236
1,634
3,483
5,356
8,832
11,730
13,453
15,878
21,098
24,933
28,882
34,209
38,278
41,276
45,891
2018 2019 2020 2021 2022 2023 2024
Tanzania Total Market Technology Network PoS Forecast
2G 3G LTE
Tanzania – Market and Tower Forecasts – Network PoS Demand
An additional 24,793 Network PoS are expected to be built between 2018 and 2024
Network PoS growth will be driven primarily by the rollout of 3G and LTE.
Operator PoS growth is expected to come from additional coverage sites and 3G/4G infill sites as MNOs densify their data networks.
Network PoS will grow as MNOs install 3G and 4G equipment on existing 2G sites and on new sites.
Source: Hardiman Analysis
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
22HARDIMAN TELECOMMUNICATIONS LIMITED 22
5,415 5,805 6,174 6,627 7,033 7,462 8,014
4,7815,362
6,1126,843
7,4458,213
9,207
1,047
1,858
3,334
5,840
7,535
8,210
9,017
11,243
13,025
15,620
19,310
22,013
23,885
26,238
2018 2019 2020 2021 2022 2023 2024
DRC Total Market Technology Network PoS Forecast
2G 3G LTE
DRC – Market and Tower Forecasts – Network PoS Demand
An additional 14,995 Network PoS are expected to be built between 2018 and 2024
Network PoS growth will be driven primarily by the rollout of 3G and LTE sites.
Operator PoS growth is expected to come from additional coverage sites and 3G infill sites as MNOs densify their data networks.
Network PoS will grow as MNOs install 3G and 4G equipment on existing 2G sites and on new sites.
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
23HARDIMAN TELECOMMUNICATIONS LIMITED 23
7,536 7,586 7,829 8,070 8,346 8,641 8,987
7,0237,888
8,4168,850
9,1539,487
10,021
1,286
1,846
3,081
5,251
6,4967,120
7,881
15,845
17,320
19,326
22,171
23,995
25,248
26,889
2018 2019 2020 2021 2022 2023 2024
Ghana Total Market Technology Network PoS Forecast
2G 3G LTE
Ghana – Market and Tower Forecasts – Network PoS Demand
An additional 11,044 Network PoS are expected to be built between 2018 and 2024
Network PoS growth is expected to be driven primarily by the rollout of 3G and LTE sites. At year end 2018 there were an estimated 1,286 LTE PoS in
Ghana
Operator PoS growth is expected to come from additional coverage sites and 3G infill sites as MNOs densify their data networks.
Network PoS will grow as MNOs install 3G and 4G equipment on existing 2G sites and on new sites.
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
24HARDIMAN TELECOMMUNICATIONS LIMITED 24
1,022 1,057 1,096 1,136 1,188 1,260 1,345
933 1,001 1,0221,094
1,1571,202
1,305237
368513
669
845
1,069
1,301
2,192
2,426
2,631
2,899
3,190
3,531
3,951
2018 2019 2020 2021 2022 2023 2024
Congo-B Total Market Technology Network PoS Forecast
2G 3G LTE
Congo-B – Market and Tower Forecasts – Network PoS Demand
An additional 1,759 Network PoS are expected to be built between 2018 and 2024
Network PoS growth is likely to driven primarily by the rollout of 3G and LTE sites.
Operator PoS growth is expected to come from additional coverage sites and 3G infill sites as MNOs densify their data networks.
Network PoS will grow as MNOs install 3G and 4G equipment on existing 2G sites and on new sites.
2018 2019F 2020F 2021F 2022F 2023F 2024F
Page
25HARDIMAN TELECOMMUNICATIONS LIMITED25
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
26HARDIMAN TELECOMMUNICATIONS LIMITED 26
DRC – Mobile Market – Operator KPI Summary
4 main operators: market leader has 35% market share, two MNOs have 27-28% each, 4th has 10%.
Item Vodacom Airtel Orange Africell
Licence Date 1999 2000 2001 2012
Number of PoS YE 2018 2,439 1,411 1,491 275
Subscribers YE 2018E 12.8 m 10.3 m 10.6 m 4.0 m
Market Share 35% 28% 27% 10%
Revenue Share (FY 2017) 42% 25% 25% 8%
Technology 900/1800/2100 900/1800/2100 900/1800/2100 900/1800/2100
Comment
Strong subscriber and
network growth.
Claims highest average
3G data download
speeds in market
(5.7Mbit/s). At least 30%
3G coverage.
4G launched in May 2018
– initial roll-out in urban
centres.
Airtel had been market leader
until 2012, but suffered from
market entry of Africell.
Airtel does not yet have a 4G
offering. This puts it at a
competitive disadvantage to
Vodacom and Orange.
Combination of Orange/Tigo
spectrum allocations led to
improved coverage – notably
for mobile broadband
services.
4G launched in May 2018 –
initial roll-out in urban
centres.
Africell’s strategy is built
around “Community
involvement”.
Africell marketing mix
involves intensive use of
social media and mobile data
platforms. Marketing
proposition is strongly
centred on low price and
youth segment.
Source: ARPTC, Hardiman Analysis, MNOs, HT Data
Page
27HARDIMAN TELECOMMUNICATIONS LIMITED 27
Following acquisition of Tigo subscribers by Orange in 2016, the DRC market features four strong players. Vodacom (35% share) is market leader. Airtel
(28%) and Orange (27%) contend for 2nd place. Africell (11%) continues to challenge, but ARPU is lower. Vodacom and Orange have launched 4G.
Subscriber Market Share
• Vodacom is market leader with 35% subscriber share at YE 2018
• Airtel (now 28%) had been market leader prior to Africell’s entry into the
market in November 2012. Airtel’s performance has been static ever since.
• The acquisition of Tigo by Orange from Millicom in 2016 created a player
of significant scale, capable of contending with Airtel for second position in
the DRC mobile market. However, Orange revenues have been static at
€60m per quarter despite growth in customer base:
• Africell entered the mobile market in late 2012. Within 2 years, by YE2014,
Africell had won 7.0m subscribers.
• There is intense competition between the four main operators. At the same
time these operators avoid aggressive competition on price as a response
to the fall in disposable income of their subscriber bases. There is
awareness that this would risk damaging the market over the longer term.
• 3G was launched in 2012, stimulating demand for infill sites in the DRC.
• Both Vodacom and Orange finally obtained 4G licences in May 2018 – after
years of delay by NRA ARPTC. Both had already been testing the service,
and both announced commercial launches of 4G, initially in Kinshasa,
during that same month - May 2018.
Mobile Market Characteristics
DRC – Mobile Market – Operators
Three major MNOs – Vodacom, Orange, Airtel – share 89% of subscriptions. Africell 11%.
Source: Regulator, MNOs, Hardiman Forecasts
Vodacom35%
Orange27%
Airtel28%
Africell11%
DRC Mobile Subscriber Market Share YE 2018 E
34% 35% 34% 31% 33% 35% 35% 35%
40% 36%29%
25% 22%25% 27% 28%
16%15%
15%14% 15%
10%9%
7%12% 15%
26%27% 27%
4%14% 19% 16% 14% 10% 11%
1% 1% 0% 0% 0% 0% 0% 0%
2011 2012 2013 2014 2015 2016 2017 2018E
DRC Mobile Subscriber Market Shares
Vodacom Airtel Tigo Orange Africell Others
Page
28HARDIMAN TELECOMMUNICATIONS LIMITED 28
DRC – Mobile Market – Overview
Recovery in mobile penetration continued during 2018 – scope for further growth, as 4G launched
Mobile market is recovering from steep decline in penetration during 2016, when the number of mobile subscriptions declined by 9 m. SIM registration
process is now more efficient. The integration of Tigo by Orange is now complete. Both Vodacom and Orange launched 4G services in 2018. However,
disposable incomes in DRC remain low: the Congolese Franc continues to depreciates against $US. This acts as a restraint on ARPU growth.
• DRC mobile penetration (active SIMs) declined from 47% at YE 2015 to
34% YE 2016, but has recovered steadily to 44% by YE2018E. Remains
among the lowest in Sub-Saharan Africa – regional average is 73% at YE
2017.
• The arrival of Africell in the market from late 2012 added particular
impetus to market subscriber growth – notably to YE2014. During 2016 all
operators reported steep declines in subscription.
• Key factors behind the decline in subscriptions:
• The government’s SIM registration programme: Many SIMs were
deactivated, as required by government policy. New sales were
hindered by operational teething problems of SIM registration process.
• Change by MNOs in methodology of recognising and counting SIMs
• Orange acquisition of Tigo, formally completed in 4Q2016.
Consolidation of the 2 entities resulted in a further reduction in active
SIM numbers, as holders of dual SIMs relinquished one of them.
• The effects of the SIM registration have largely passed. Subscriber
growth has resumed.
• All operators independently report continued subscriber growth during
2018, in line with ARPTC statements.
• We base our analysis on ‘active SIMs’ - SIMs that have had a
chargeable event within an MNO-designated time frame, typically 90
days. In some cases ARPTC quotes a higher figure for subscriptions
than that reported by the MNO. In these cases we adopt the more
conservative MNO figure.
• Subscriber growth rate in DRC exceeds net population growth growth
rate. The mobile penetration rate will increase as a result. We expect it
converge upon average African penetration levels over the medium to
longer term.
• The launch of 4G services by both Vodacom and Orange during 2Q2018
will accelerate data service growth.
Source: Regulator, MNOs, Hardiman Forecasts
5.1 7.1 8.811.5 11.8 9.7
12.0 12.86.2
7.47.6
9.2 8.1
6.8
9.310.3
2.4
3.03.9
5.1 5.3
1.5
1.81.8
4.3 5.3
7.3
9.110.6
0.0
0.9
3.7
7.0 5.8
3.9
3.5
4.0
15.3
20.3
25.8
37.1 36.3
27.6
33.8
37.7
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017 2018E
DRC Mobile Subscriptions by Operator (m)
Vodacom Airtel Tigo Orange Africell
15.3
20.3
25.8
37.1 36.3
27.6
33.837.723%
29%36%
49%47%
34%41% 44%
51%57%
63% 68% 73% 72% 73%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
1
11
21
31
41
51
2011 2012 2013 2014 2015 2016 2017 2018E
DRC Mobile Subscriptions (m) and PenetrationSources: ARPTC, MNOs, ITU, UN
DRC subs m DRC Penetration % SSA Average Penetration %
Page
29HARDIMAN TELECOMMUNICATIONS LIMITED 29
DRC – Mobile Market – Subscriptions and Penetration
Mobile penetration rate of 61% achievable by 2024 – 63 m mobile market subscriptions
Summary of HTL forecast assumptions:
• Population at YE2017 was 82.7m. Projected to
increase to 102.7m by YE2024 (+3.1% CAGR).
[Source: UN Population Division].
• Mobile subscriber penetration at YE2017 was 41%
(33.8m subscriptions). Projected to increase to 62.6m
by 2024 (+9.2% CAGR)
Commentary on Assumptions:
a) Population
• We accept the UN view that the starting point
estimates of DRC’s National Statistics Institute (INS)
are too high. Instead of INS mid-year 2015 85.0m, we
have adopted UN 76.2m. However, there is general
agreement on projected growth rate to 2024: +3.1% -
+3.2% CAGR.
b) Mobile Penetration
• DRC mobile penetration at YE2017 (41%) is well
correlated with GDP per capita ($US 478) when
benchmarked against peer markets.
• The IMF WEO’s most recent forecast (Oct-18) projects
modest growth in Nominal GDP per Capita to $US 525
in 2023 (+1.6% CAGR)
• Mobile penetration in the >60% range has already been
achieved in Sub-Saharan markets with similar (or
lower) levels of GDP per capita, notably:
• Sierra Leone: 2017 Penetration 84%, 2016 GDP per
Capita $US 488,
33.837.7
40.944.8
48.953.3
57.962.6
41%44%
46%49%
52%55%
58%61%
0%
10%
20%
30%
40%
50%
60%
0
10
20
30
40
50
60
70
80
2017 2018E 2019F 2020F 2021F 2022F 2023F 2024F
DRC Mobile Subscriptions (m) and Penetration (%)
Mobile Subscriptions m Penetration (%)
R² = 0.0821
0%
20%
40%
60%
80%
100%
120%
140%
0 500 1000 1500 2000
Mobile
Penetr
atio
n (
World
Bank)
Nominal GDP Per Capita ($US, current prices) [IMF WEO October 2017]
Mobile Penetration in Sub-Saharan Markets at YE 2017 (%)vs. Nominal GDP per Capita ($US, current prices)
DRC 2017
DRC 2020
DRC 2023
Other HTA markets 2017
Source: Regulator, MNOs, World Bank, ITU, UN, Hardiman Forecasts
Page
30HARDIMAN TELECOMMUNICATIONS LIMITED 30
Tanzania – Mobile Market – Operator KPI Summary
11 licensed operators in Tanzania but only 6 are operational
Category Vodacom Airtel Tigo / Zantel Halotel TTCL Smart
Licence Date 2000 2001 1994 2008 2006 2007
Number of POS
(YE 2018 Estimate)3,018 2,127 3,030 2,923 TBC TBC
Subscribers
(YE 2018)14.0m 11.0m
13.7m (12.6m
Tigo, 1.2m Zantel)3.9m 0.6m 0.1m
Market Share
(YE 2018)33% 25%
32% (28.9% Tigo,
2.7% Zantel)9% 1.3% 0.3%
Comment
Vodacom
continues to invest
actively in TZ
market.
25% of company
shares were
floated on DSE in
August 2017,
raising $210m.
Airtel investment in
TZ market has
slowed.
Has lost market
share due to
complex customer
registration
process and strong
price competition.
Tigo investment in
TZ market still
strong despite
uncertain strategic
focus from owner
Millicom Group.
In early 2019
Millicom applied to
Fair Competition
Commission (FCC)
to increase holding
in Zantel to 99.9%.
Halotel continues to
invest actively in TZ
market.
Main focus is on rural
connectivity. Halotel
has stated that it plans
to deploy 300 3G and
500 4G sites during
2019.
100% government-
owned since Jun-
16, when Bharti
Airtel sold own 35%
stake.
Launched 4G LTE
services in 2015
and LTE-A in 2016.
Smart launched as
mobile operator
subsidiary of the
Aga Khan fund for
Economic
Development
(AKFED) in 2014.
Subscriber base
reached 1.6m at YE
2015, but has now
dwindled to near
zero.
Sources: TCRA, MNOs, Hardiman Analysis
Page
31HARDIMAN TELECOMMUNICATIONS LIMITED 31
89% of mobile subscriptions are held by 3 MNOs: Vodacom (33%), Tigo plus acquisition Zantel (32%) and Airtel (25%). Further consolidation in the
market is possible: long-term plans of Millicom and Bharti Airtel are uncertain. 4th player Halotel (Viettel Group) remains committed to the market.
Subscriber Market Share
• Four major international MNOs operate in Tanzania:
• Three of these accounted for 89% of active SIMs at YE 2018: Vodacom
(33% subscriber market share), Tigo/Zantel (32%) and Airtel (25%).
• The 4th significant MNO is Halotel, owned by Viettel Group. Halotel
entered the market in 2015. It rapidly won 9% market share but its
share has stabilised at this level.
• Fixed-line incumbent TTCL has focused on the mobile segment since
2017. Subscriptions have increased from 0.2 m at YE 2016 to 0.6 m at
YE 2018 (1.3% subscriber market share).
• Consolidation has been a key feature of Tanzania’s mobile market:
• Tigo acquired Zantel (main operator on Zanzibar archipelago) during
2015. The two operators continue to operate for the time being under
their former brand identities.
• Of 11 registered operators only 7 are active.
• Mobile market ARPU is low but stable: Vodacom reported average ARPU
of $US 2.7 for 2018. Voice remains the largest component of ARPU, but
data share is growing.
• There is strong uptake of of Mobile financial services (MFS). MFS is a key
driver of mobile subscriber growth. This reflects low penetration of standard
banking facilities in Tanzania. The TCRA reported 23.3 m mobile money
subscriptions at YE 2018 – equivalent to 54% of total mobile subscriptions.
Vodacom M-Pesa is market leader with 9.0m subscriptions (39% market
share); Tigo Pesa / Zantel Ezy Pesa 7.6 m and 0.5 m respectively
(combined share 35%), Airtel Money 4.8 m (21%), Halotel 1.3 m (6%).
Mobile Market Characteristics
Tanzania – Mobile Market – Operators
Three established international MNOs account for 89% of SIMs. Viettel continues to invest.
Source: Regulator, MNO, Hardiman Analysis
40% 35% 38% 38% 33% 31% 32% 33%
23%22% 22% 26%
27% 29% 28% 29%
6%11% 7% 5%
4% 3% 2% 3%
30% 31% 33% 30%29% 26% 27% 25%
3% 9% 10% 9%4% 2% 0.3% 0.3%
0.8%1.3%
2011 2012 2013 2014 2015 2016 2017 2018
Tanzania Mobile Subscriber Market Share (%)
Vodacom TiGO Zantel Mobile Airtel Halotel Smart TTCL Mobile
33%
29%3%
25%
9%
0% 1%
Tanzania Mobile Subscriber Market Share YE2018
Page
32HARDIMAN TELECOMMUNICATIONS LIMITED 32
23.526.9 27.1
31.4
38.5 40.0 40.043.5
49%54% 53%
59%
70% 71% 69%72%
51%
57%
63%68%
73% 72% 73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0.0
0.0
0.0
0.0
0.0
0.1
0.1
0.1
2011 2012 2013 2014 2015 2016 2017 2018
Tanzania Mobile Subscriptions (m) and Penetration (%) [Sources: TCRA, MNOs, ITU, UN Population Division]
TZA Active Subs (m) TZA Penetration % Sub-Saharan Africa Penetration %
Tanzania – Mobile Market – Overview
Market subscriber growth recovered during 2018: +9% YoY
Tanzania’s mobile market grew strongly during 2018: 3.5 m subscriptions (+9% YoY). The effects of the TCRA SIM registration programme have
passed; market rebalancing following aggressive 2015 sales activity; MNOs in process of listing 25% of shares on DSE, as required by government.
Uncertainty among market players as Millicom considers its participation in Africa markets. Azam announced mobile market entry but no date indicated.
• Tanzania mobile penetration reached 72% at YE2018. This remains
slightly below the average penetration rate for the Sub-Saharan Africa
(73% at YE 2017). Further scope for subscriber growth is indicated.
• 2015 had seen exceptional subscriber growth: +7.1m (+23% YoY). This
was driven by market entry of Halotel (Viettel Group) and Smart.
Attractive promotions drove take-up of new SIMs.
• Subscriber growth slowed in 2016 (1.5m net adds or +4% YoY) and
stalled completely in 2017. Reasons for slowdown include: cancellation
of unregistered SIMs; consolidation of Tigo and Zantel subscriber bases
after 2015 merger; blocking of nearly 2 m counterfeit handsets by TCRA;
higher than usual churn as a result of aggressive promotions.
• Strong subscriber growth resumed in 2018: +3.5 m (+8.9% YoY). This
growth was shared between two MNOs: market leader Vodacom and
Tigo/Zantel. Tigo/Zantel achieved strongest YoY growth (+1.7m), vs.
Vodacom +1.3m. Airtel’s subscriber base is stable - c. 11m since 2015.
• All MNOs are required by a 2016 law to float at least 25% of stock on the
Dar Stock Exchange (DSE). The rationale is to improve transparency, as
well as given citizens the opportunity to invest in a rising sector. Vodacom
is the only MNO to have complied to date. Tigo’s flotation was delayed by
an ownership dispute, but is due to take place in 2019. Airtel’s IPO is
problematic due to the company’s high level of accumulated losses.
• Continued roll-out of 3G and higher uptake of recently launched 4G
services are projected to drive further subscriber growth. Tigo 4G LTE
services have been available in 24 urban locations since 2015 – Tigo
announced LTE-A launch (4G+) in September 2018. Vodacom formally
received its 4G licence in July 2018 – it will deploy in the 700MHz band.
• In June 2018 Bakhresa Group, operator of AzamTV, announced intention
to enter the mobile market under the Azam brand, promising “high quality
services at very affordable rates for all Tanzanians”. Azam plans to use
2x10 MHz in 700 MHz band for which Bakhresa paid $US 10 m at
auction. However, no further details re launch date have been provided.
Source: Regulator, MNO, Hardiman Analysis
9.4 9.4 10.3 11.8 12.7 12.4 12.9 14.1
5.5 6.0 6.08.2
10.4 11.7 11.112.6
1.5 3.1 1.81.7
1.4 1.1 0.91.2
7.08.4 9.0
9.611.0 10.5 10.9
11.01.2
3.4 3.8
3.91.6 0.8 0.1
0.1
0.10.1 0.1
0.2
0.2 0.2 0.30.6
23.526.9 27.1
31.4
38.540.0 40.0 43.5
0
10
20
30
40
50
60
2011 2012 2013 2014 2015 2016 2017 2018
Tanzania Mobile Market Subscriptions (m)
Vodacom TiGO Zantel Mobile Airtel Halotel Smart TTCL Mobile
Page
33HARDIMAN TELECOMMUNICATIONS LIMITED 33
Tanzania – Mobile Market – Subscriptions and Penetration
Mobile penetration rate of 80% achievable by 2024 – over 57m mobile market subscriptions
Summary of HTL forecast assumptions:
• Population at YE2017 - 58.2m. Projected to increase to
71.6m by YE2024 (+3.0% CAGR) [Source: UN]
• Mobile subscriber penetration at YE2017 was 69%
(40.0 m subscriptions). Projected to increase to 81%
(57.9 m subscriptions) by 2024 (+5.5% CAGR)
Commentary on Assumptions:
a) Population
• The last census was conducted in 2012. National
Bureau of Statistics (NBS) reported a mid-year 2012
population of 44.9m. However, the UN Population
Division restated this as 49.1m, citing methodological
issues with NBS approach.
• We adopt the UN estimates and forecasts, which
envisage an annual growth rate of 3.1% in 2017
reducing gradually to 3.0% by 2024.
b) Mobile Penetration
• Tanzania’s current mobile penetration (69% at YE2017,
72% at YE2018) is well correlated with GDP per capita
($US 1,034) when benchmarked against peer markets.
• IMF forecasts Tanzania GDP per capita to grow to
$US1,481 by 2023 (+6.2% CAGR), with mobile
penetration growing to 79% by 2023.
• Mobile penetration above 80% has already been
achieved in some sub-Saharan markets with similar (or
lower) levels of GDP per capita, notably:
• Mauritania: 2017 Penetration 83%, 2017 GDP per
Capita $US 1,243
• Zimbabwe : 2017 Penetration 84%, 2017 GDP per
Capita $US 1,185
40.0 40.043.5
45.948.2 50.7
53.255.6
57.971% 69%72% 74% 76% 77% 79% 80% 81%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
10
20
30
40
50
60
70
2016 2017 2018 2019 2020 2021 2022 2023 2024
Tanzania Mobile Market Subscriber and Penetration Forecast (m, %)[HTL Analysis]
Mobile Subscribers m Penetration (%)
R² = 0.0762
0%
20%
40%
60%
80%
100%
120%
140%
0 1000 2000 3000 4000 5000 6000
Mobile
Penetr
atio
n (
World
Bank)
GDP Per Capita ($US, current prices) [IMF WEO Oct-18]
Mobile Penetration in Sub-Saharan Markets 2017 (%)vs. GDP per Capita ($US, current prices)
Tanzania 2017
Tanzania 2020
Tanzania 2023
2016 2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
Source: Regulator, MNOs, ITU, IMF-WEO, Hardiman Analysis
Page
34HARDIMAN TELECOMMUNICATIONS LIMITED 34
Tanzania – Mobile Market – Mobile Broadband
Mobile broadband penetration growing strongly – 33% at YE 2017 – well above SSA average (26%)
Over 22 m mobile wireless internet users at YE 2018 – equivalent to 51% of total mobile subscriptions (up from 48% at YE 2017)
MBB population coverage in Tanzania is now among the highest in the region at 85% (3G) at YE 2017. 4G coverage still low, however, at 13%.
• Tanzania’s NRA TCRA reports 23.1 m Internet users (connections) at YE
2018. Of these 96% (22.3 m) were mobile wireless.
• Mobile broadband user numbers grew at a 5-year CAGR of +24% from
2013 to 2018. 2018 YoY growth was +17% (+3.3 m users)
• Continued roll out of 3G and 4G networks will drive further take-up, subject
to availability of affordable smartphones
• Subscriptions to other Internet technologies had declined to YE2015 but
recovered during 2016, in line with the demand for fixed broadband and the
availability of LTE:
• Fixed wireless: from 1.2m at YE 2016 to 3.5m at YE 2017: +184% YoY.
• Fixed wired: from 0.6m at YE 2016 to 0.5m at YE 2016: -18% CAGR.
3.76.0 7.5
11.316.3 18.0 19.0
22.3
16%22%
28%
36%42% 45% 48%
51%
5%10%
16%19%
26%31% 33%
8%12%
15%21%
30%32%
33%37%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2011 2012 2013 2014 2015 2016 2017 2018
Tanzania Mobile Broadband Subscriptions (m) and MBB Penetration (%) [Sources: TCRA, ITU]
TNZ MBB subs (000s) TNZ MBB as % Mobile Subs
Africa MBB as % Mobile Subs TNZ MBB Penetration (%)
4%4%5%
9%12%12%13%13%13%14%15%16%17%18%
20%23%23%25%26%26%26%26%27%27%
29%31%
33%34%35%
41%45%
49%52%
54%56%
59%67%
70%82%
84%
South SudanNigerCAR
Guinea-BissauLiberiaBenin
BurundiMadagascar
EswatiniEthiopiaAngola
DRCCongo B
CameroonNigeria
ChadUgandaGuineaMalawi
Sierra LeoneMozambiqueSSA Average
SenegalGambia
Burkina FasoMali
TanzaniaKenya
RwandaZimbabwe
ZambiaLesotho
TogoCôte d'Ivoire
NamibiaMauritius
BotswanaSouth Africa
GhanaGabon
MBB Penetration (% Population) at YE 2017Source: ITU, Hardiman analysis
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35HARDIMAN TELECOMMUNICATIONS LIMITED 35
Congo-B – Mobile Market – Operator KPI Summary
Two MNOs – MTN and Airtel. Both are subsidiaries of major international groups
Item MTN Airtel
Licence Date 2000 1999
Number of PoS 474 495
Subscriptions at YE 2018 2.5 m 2.3 m
Market Share 51% 49%
Estimated Revenue Share >55% <45%
Technologies 2G/3G/4G 2G/3G/4G
Comment
Market leader with good coverage and high value
customer base.
MTN 4G population coverage is reported as 50% at YE
2018.
MTN reported 149 4G sites at end 1H2018 – 14% of total
sites (1,079 – of which 50% 2G and 36% 3G).
Aspires to outperform MTN in terms of coverage.
At launch of 4G service in December 2018 Airtel already claimed
83% population coverage. It reported 250 4G sites at launch.
Airtel markets the Airtel 4G network as “the largest and most
stable in Congo”. This has not been independently verified,
however.
Subscribers are invited to present their 3G SIMs at any Airtel store
and receive a 4G SIM free of charge, including 5 GB of free credit.
Source: Regulator, MNO, Hardiman Analysis
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36HARDIMAN TELECOMMUNICATIONS LIMITED 36
MTN is market leader with 51% subscriber market share. MTN benefited from the exit of Warid from the market in 2014 – it immediately increased market
share from 38% at YE 2013 to 44% at YE 2014. MTN further increased market share in 2015 but Airtel has responded with progressive increases in
market share. With the exit of Azur in 2Q2018 the Congo-B market is a duopoly: 51% MTN, 49% Airtel.
Subscriber Market Share
• Congo-B now has tow active MNOs: MTN and Airtel.
• The number of active mobile subscriptions declined by -5% during 2018 –
mainly due to the exit of Azur.
• MTN is market leader – MTN market share was 51% at YE 2018.
Subscriptions declined slightly during 2018: -2.8% YoY. MTN reported
0.4m active mobile data users at end 1H2018 (19% of total MTN
subscriptions); equal to 49% of MTN’s 0.9m smartphone owners during the
period.
• Airtel achieved modest subscriber growth during 2018: +0.7% YoY. The
slight decline in MTN subscriptions and the exit of Azur meant that Airtel
market share increased to 49% by YE 2018. The launch of 4G services
during December 2018 means that Airtel can continue to compete strongly
with MTN in the area of mobile data services. .
Mobile Market Characteristics
Congo-B – Mobile Market – Operators
Two established international MNOs – MTN and Airtel – share 100% of all mobile subscriptions.
Source: Regulator, MNO, Hardiman Analysis
MTN51%
Airtel49%
Congo B Mobile Subscriber Market Share (%) YE 2018
41% 38%44%
51% 50% 50% 51%
39%32%
48%42% 43% 46% 49%
15%24%
5% 6% 8% 7% 7% 4%
2012 2013 2014 2015 2016 2017 2018
Congo B Mobile Subscriber Market Share (%)
MTN Airtel Warid Azur
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37HARDIMAN TELECOMMUNICATIONS LIMITED 37
Congo-B – Mobile Market – Overview
Stable market with two main international players. Mobile penetration high: 88% at YE 2018.
Congo-B’s mobile market is well penetrated: 4.9 m subscriptions at YE 2018, equivalent to 88% penetration, assuming 5.5 m population.
Subscriptions declined in 2018, following exit of Azur from market. Market is now a duopoly between MTN and Airtel. Both operators have launched 4G.
• Congo-B is a two-player mobile market : MTN and Airtel. Azur exited the
market during 2018.
• Penetration was 94% at the end of October 2017 (4.7 m mobile
subscriptions, assuming population of 5.3 m per UN Population Division
estimates). This is considerably higher than the Sub-Saharan African
average (73%).
• MTN is market leader: 2.5m subscriptions at YE 2018. MTN was the first
operator in Congo-B to offer 4G services – it launched ‘4G Turbo’ in parts
of the capital Brazzaville and in Congo’s second city Pointe Noire late in
2016.
• Airtel is the second player. Airtel acquired the subscribers of Warid in
2014. Subscriptions increased to 2.3 m by YE 2017 and remained at this
level during 2018. Airtel announced the launch of 4G services in
December 2018. It claims already to offer the broadest 4G coverage, via
250 dedicated 4G sites (83% population coverage).
• Azur exited the market during 2Q2018. It had struggled to make an
impact on the market and was in financial difficulty: subscriptions had
already declined steadily to 0.2 m at YE2017.
• Market ARPU is high relative to that of Sub-Saharan African peer
markets. However, it has followed a steady declining trend since 2014.
• MTN reported ARPU of $US 6.7 or XAF 3,789 for 3Q2018 – down from
$US 11.2 in 2Q2014. However ARPU had been below $6.0 in each
quarter since 3Q2017, so some recovery in falling trend is indicated.
• Regulator ARPCE reports voice and SMS ARPU on a quarterly basis.
Average market ARPU in 2018 was XAF 2,400 ($US 4.4): a decline of -
21% YoY. Average MOU also declined during 2018 to 63 minutes per
month (-11% YoY). No information is provided on traffic volumes or
ARPU from mobile data or VAS services (including mobile money).
Source: Regulator, MNO, Hardiman Analysis
1.7 1.8 2.0 2.2 2.4 2.5 2.5
1.7 1.5
2.2 1.92.1
2.3 2.30.6 1.10.2
0.3 0.4 0.30.3
0.24.3
4.7 4.64.4
4.85.1
4.8
0
1
2
3
4
5
6
2012 2013 2014 2015 2016 2017 2018
Congo B Mobile Subscriptions by Operator (m)
MTN Airtel Warid Azur
4.34.7 4.6 4.4
4.85.1
4.8
91% 97% 93% 87% 92% 95% 88%
57% 63% 68% 73% 72% 73%
-200%
-150%
-100%
-50%
0%
50%
100%
0
1
2
3
4
5
6
7
8
2012 2013 2014 2015 2016 2017 2018
Congo B Mobile Subscribers (m) and Penetration (%)
COG Subscriptions (m) COG Penetration % SSA av. penetration (%)
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38HARDIMAN TELECOMMUNICATIONS LIMITED 38
Congo-B – Mobile Market – Subscriptions and Penetration (Base Case)
Mobile penetration rate of 94% achievable by 2024 – 6.0 m mobile market subscriptions
Summary of HTL forecast assumptions:
• Population: Our year end population estimates (5.3m
at YE2017) are based on the mid-year values of the UN
Population Division. This is 21% higher than IMF
estimate and 11% higher than the estimate of Congo’s
National Statistics Centre (CNSEE). Following the UN,
we project population to increase to 6.4m by YE2024
(+2.6% CAGR).
• Mobile subscriber penetration at YE2017, using UN
population values, was 95% (5.1m subscriptions),
falling to 88% at YE2018 (4.8 m subscriptions).
Projected to increase to 6.0 m by 2024 (+3.7% CAGR)
Commentary on Assumptions:
a) Population
• The UN Population Division appears to view the 2007
census results as incomplete – some areas were
undercounted. Congo’s population is heavily
concentrated around Brazzaville and Pointe Noire.
Accurate counting in rural areas is a challenge.
b) Mobile Penetration
• Congo B’s mobile penetration at YE2017 (88%) shows
reasonable correlation with Nominal GDP per capita
when benchmarked against peer markets.
• IMF forecasts Congo-B Nominal GDP per capita to
decline from 2020, and to achieve only +0.4% CAGR
growth from $US 2,005 in 2016 to $US 2,043 in 2023 .
• Mobile penetration in the 90-100% range has already
been achieved in some sub-Saharan markets with
similar (or lower) levels of GDP per capita, notably:
• Senegal: 2017 Penetration 98%, 2017 GDP per
Capita $US 1,331
Source: Regulator, IMF WEO, ITU, Hardiman Model
5.14.8
5.0 5.2 5.4 5.6 5.8 6.0
95%88% 89% 91% 92% 93% 93% 94%
0%
20%
40%
60%
80%
100%
0
1
2
3
4
5
6
7
8
2017 2018 2019 2020 2021 2022 2023 2024
Congo B Mobile Market Subscriber and Penetration Forecast (m, %)
Mobile Subscribers m Penetration (%)
R² = 0.0774
0%
20%
40%
60%
80%
100%
120%
140%
0 500 1000 1500 2000 2500 3000
Mobile
Penetr
atio
n Y
E 2
017 (I
TU
, U
N)
Nominal GDP Per Capita ($US, current prices) [Source: IMF WEO October 2018]
Mobile Penetration in Sub-Saharan Markets 2017 (%)vs. Nominal GDP per Capita ($US, current prices)
Congo_B 2017
Congo_B 2020
Congo_B 2023
Other HTA markets 2017
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
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39HARDIMAN TELECOMMUNICATIONS LIMITED 39
Congo-B – Mobile Market – 3G and Mobile Broadband
MBB adoption within coverage area is high – however, coverage still low: 17% 3G, 5% 4G.
Source: GSMA, Hardiman
MBB penetration in Congo-B is increasing steadily. ITU reported 18% at YE 2018. GSMA reported that 44% of mobile subscriptions were MBB-enabled
at YE 2018 – a similar level to Tanzania. The main restraint on MBB adoption is low population coverage of both 3G and especially 4G. The number of
active data users reported by MTN is around half of the total number of smartphone users. Users cannot avail of full data functionality of handsets.
107% 104% 103% 101%90% 85%
71% 65% 65%53% 52%
41% 40% 40% 39% 37% 35%27% 24% 21% 19% 18% 17%
-10%
10%
30%
50%
70%
90%
110%
Mobile Broadband Adoption as % of MBB Coverage at YE 2017 Sources: ITU January 2019 edition, MTN, Hardiman analysis
Based on MBB penetration of 17% and 3G coverage
of 17%. 4G coverage at YE 2017 was 5%.
Algeria
Angola
Burkina Faso
Cameroon
Congo B
DRC
Gambia
Ghana
Kenya
Niger
NigeriaRwanda
Sierra Leone
South Africa
Tanzania
Tunisia
Uganda Zambia
R² = 0.40730%
10%
20%
30%
40%
50%
60%
70%
400 1,400 2,400 3,400 4,400 5,400 6,400
MBB (3G/4G) share of Mobile Connections
vs Nominal GDP per Capita ($US) 2018(IMF, ITU, UN, We Are Social)
Algeria
AngolaBurkina Faso
Cameroon
Congo B
DRC
Egypt
Gambia
Ghana
Kenya
Niger
NigeriaRwanda
Sierra Leone
South Africa
Tanzania
Tunisia
Uganda Zambia
R² = 0.5593
0%
20%
40%
60%
80%
100%
400 1,400 2,400 3,400 4,400 5,400 6,400
MBB (3G/4G) Penetration (% Pop) vs Nominal GDP per Capita ($US) 2018
(IMF, ITU, UN, We Are Social)
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40HARDIMAN TELECOMMUNICATIONS LIMITED 40
Ghana – Mobile Market – Operator KPI Summary
Following Airtel-Tigo merger Ghana mobile market has three major players
Item MTN Vodafone Airtel-Tigo Glo Mobile
Licence Date 1996 2000 1994 (Tigo), 1997 (Airtel) 2008
Number of PoS YE2018 3,168 1,730 1,617 1,100
Subscriptions (m)
YE2018E17.7m 9.8m 10.3m 0.7m
Market Share (%)
YE2018E46% 25% 27% 2%
Subscribers / PoS 5,587 5,665 6,364 672
ARPU 2018 $US 3.7 NA NA NA
Revenue Share >50% >22% >27% >1%
Comment
Market leader with high
value customer base.
IPO for 35% of MTN Ghana
shares was completed
during September 2018 -
$US 237 m raised.
Attempting to match MTN in
terms of coverage.
Immediate focus is on
launch and roll-out of 4G
services, planned for
1H2019.
In 2010 Vodafone
concluded a ten-year
Operation and Maintenance
(O&M) agreement with
Eaton Towers for up to 750
towers.
It is not yet clear if or under
what terms this agreement
will be renewed upon expiry
in 2020.
Fewer subs / PoS than
MTN, but still suffering from
congestion.
50:50 JV between Bharti
Airtel and Tigo, branded
Airtel-Tigo.
Network merger still in
progress. To be completed
by end 2019.
Launched in 2012 with
aggressive marketing and
pricing strategy.
Some initial success
achieved (1.6m subscribers
during first year).
However, subscriber base
reduced by nearly 50%
during 2016 and has
remained flat at this low
level.
Source: Regulator, MNO, Hardiman Analysis
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41HARDIMAN TELECOMMUNICATIONS LIMITED 41
MTN is clear market leader: it has used first-mover advantage in 4G to maintain market share at 46%. MTN continues to reinforce leadership position by
deploying a 4-play strategy. Vodafone had benefited from former incumbent status but is now the third largest MNO: launch of 4G planned for 2Q2019.
A strong challenge is being provided by the new Airtel-Tigo entity, after merger of Bharti Airtel and Millicom Tigo’s Ghanaian operations at YE 2017.
Subscriber Market Share
• During the last five years the relative market shares of the four main
players have remained relatively stable. However, Airtel and Tigo merged
operations at the end of 2017, meaning that Ghana is effectively a three-
player market.
• MTN is market leader with a 46% share of subscriptions at YE2018E.
Subscriber growth has resumed following the removal of inactive
subscribers in 1Q2017. MTN’s LTE service has been live in all 10 regional
capitals since June 2016. MTN is also developing a 4-play offering: fibre
broadband has already been launched in selected commercial and
residential districts; IPTV and fixed telephony to be added.
• MTN Group is in the process of divesting 35% of MTN Ghana to Ghanaian
investors. This was a condition of the award to MTN of 2x10MHz of
800Mhz spectrum for LTE services.
• Airtel and Tigo merged late in 2017. The NCA reported that Airtel-Tigo had
10.3m subscriptions at YE2018: 28% market share, +0.5 m net adds YoY
• Glo Mobile market share declined sharply in 2016 from 1.4m subscribers
at YE2015 (3.9% market share) to 0.7m at YE2016 (1.8%). Glo’s weak
market position has persisted. At YE2018 NCA reports that Glo had only
0.7m subscriptions (2% market share).
• 6th MNO Expresso ceased operations during 2018. At YE2017 it already
had only 23k subscribers (0.06% market share).
Mobile Market Characteristics
Ghana – Mobile Market – Operators
Three operators – MTN, Vodafone and the Airtel-Tigo JV – share 98% of all active SIMs.
Source: Regulator, MNO, Hardiman Analysis
46%
25%
27%
2%
Ghana Mobile Subscriber Market Shares at YE2018E (%)
MTN Vodafone AirtelTigo Glo Mobile
46% 46% 46% 46% 50% 44% 46%
21% 22% 23% 22%22%
26% 25%
14% 14% 14% 14%14%
28% 27%
6% 5% 5% 4% 2% 2% 2%
1% 0% 0% 0% 0% 0% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018E
Ghana Mobile Subscriber Market Shares (%)[MNOs, NCA, Hardiman Analysis]
MTN Vodafone Tigo Airtel AirtelTigo Glo Mobile Expresso
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42HARDIMAN TELECOMMUNICATIONS LIMITED 42
Ghana – Mobile Market – Mobile Broadband
Mobile broadband adoption growing strongly, but scope exists for further improvement in coverage
MNOs continue to grow data usage among subscriber base – NCA reports that 59% of mobile market subscriptions were active data users at end
3Q2018. MBB penetration was 82% at YE 2017 – one of the highest penetration levels in Sub-Saharan Africa.
• Voice-only subscription is slowing: voice and traditional messaging
services are no longer the key driver of demand. Growth in Ghana’s mobile
sector is now being driven mainly by adoption of mobile data services.
• The Ghanaian regulator, NCA, reports that the number of mobile data
subscriptions increased from 8.3m at YE2012 to 23.5m at end 3Q2018
(+23% 5-year CAGR). Most of the growth is in 4G (MTN).
• Thus growth in the number of mobile data users is higher than the growth
of mobile phone subscriptions (+11% CAGR).
• The share of mobile subscribers which are data users has increased from
33% in 2012 to 59% at end 3Q2018. We expect this share to increase
further as old handsets are replaced by smartphones, as MNOs improve
mobile broadband coverage, and when Vodafone and Airtel-Tigo obtain 4G
licences and roll-out own 4G services.
25.628.0
30.4
35.038.3 37.4
40.0
8.310.3
15.818.0
19.622.1 23.5
33%
37%
52% 52% 51%
59% 59%
0%
10%
20%
30%
40%
50%
60%
70%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
YE 2012 YE 2013 YE 2014 YE 2015 YE 2016 3Q2017 3Q2018
Ghana Active Data Users (m), and as Share of Total Market Mobile Subscriptions (%)
Total mobile subs (m) Mobile data users (m) Data users as % total
4%4%5%
9%12%12%13%13%13%14%15%16%17%18%
20%23%23%25%26%26%26%26%27%27%
29%31%
33%34%35%
41%45%
49%52%
54%56%
59%67%
70%82%
84%
South SudanNigerCAR
Guinea-BissauLiberiaBenin
BurundiMadagascar
EswatiniEthiopiaAngola
DRCCongo B
CameroonNigeria
ChadUgandaGuineaMalawi
Sierra LeoneMozambiqueSSA Average
SenegalGambia
Burkina FasoMali
TanzaniaKenya
RwandaZimbabwe
ZambiaLesotho
TogoCôte d'Ivoire
NamibiaMauritius
BotswanaSouth Africa
GhanaGabon
MBB Penetration (% Population) at YE 2017Source: ITU, Hardiman analysis
Sources: NCA, ITU, Hardiman Analysis
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43HARDIMAN TELECOMMUNICATIONS LIMITED 43
Ghana – Mobile Market – Subscriptions and Penetration
Mobile penetration rate to stabilise at 131% by 2024 – 44 m mobile market subscriptions
Summary of HTL forecast assumptions:
• Population at YE2017 was 29.1m. Projected to
increase to 33.0m by YE2023 and 33.m by YE2024
(+2.1% CAGR). [Source: UN Population Division].
• Mobile subscriber penetration at YE2017 was 121%
(35.2m subscriptions). Decline during 2017 was du
mainly to the downward restatement of active
subscriber numbers by MTN. Penetration is projected
to recover, however, to above 130% by 2019 and to
stabilise around 131% by 2024 (44.0m subscriptions:
+3.2% CAGR 2017-24)
Commentary on Assumptions:
a) Population
• All sources are in broad agreement about Tanzania’s
current population and growth rate.
• We assume continued population growth at +2.1%
CAGR to 2023 in line with the forecasts of the UN
Population Division.
b) Mobile Penetration
• Ghana mobile penetration at YE2017 (121%) was
higher than that of other Sub-Saharan African markets
with similar levels of Nominal GDP per capita.
• The IMF forecasts Ghana Nominal GDP per capita to
grow strongly from $US 1,663 in 2017 to $US 2,275 in
2023 (+5.4% CAGR)
• Mobile penetration above 120% has already been
achieved in some sub-Saharan markets with similar (or
lower) levels of GDP per capita, notably:
• Cote d’Ivoire: 2017 Penetration 129%, 2017 GDP
per capita $US 1,621.
• Gambia: 2017 Penetration 137%, 2017 GDP per
capita $US 705.
R² = 0.072
0%
20%
40%
60%
80%
100%
120%
140%
0 1000 2000 3000 4000 5000 6000
Mobile
Penetr
atio
n (
World
Bank)
Nominal GDP Per Capita ($US, current prices) [IMF WEO October 2018]
Mobile Penetration in Sub-Saharan Markets 2017 (%)vs. Nominal GDP per Capita ($US, current prices)
Ghana 2017
Ghana 2020
Ghana 2023
Other HTA markets 2017
38.335.2
38.5 40.1 41.4 42.4 43.043.5 44.0
134%
121%129% 132% 133% 134% 133% 132% 131%
0%
20%
40%
60%
80%
100%
120%
140%
0
10
20
30
40
50
60
2016 2017 2018E 2019 2020 2021 2022 2023 2024
Ghana Mobile Market Subscription and Penetration Forecast (m, %)[NCA, UN, Hardiman Analysis]
Mobile Subscriptions (m) Mobile Penetration (%)
2016 2017 2018E 2019F 2020F 2021F 2022F 2023F 2024F
Source: NCA, ITU, UN, MNO, Hardiman Model
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44HARDIMAN TELECOMMUNICATIONS LIMITED 44
Ghana – Mobile Market – 3G and Mobile Broadband
MBB adoption in Ghana is among highest in Sub-Saharan Africa
Source: GSMA ITU,UN, We Are Social Hardiman
MBB take-up in Ghana is high relative to other Sub-Saharan African markets. MBB-enabled subscriptions (3G/4G) represented 62% of total Ghana
mobile market subscriptions at YE 2018 – equivalent to 78% population penetration. This correlates with the 82% MBB penetration and 80% MBB
coverage values reported by the ITU for YE 2017. MNOs are investing heavily in mobile broadband. 4G population coverage already exceeds 35%.
Algeria
Angola
Burkina Faso
Cameroon
Congo B
DRCGambia
Ghana
Kenya
Niger
NigeriaRwanda
Sierra Leone
South Africa
Tanzania
Tunisia
Uganda Zambia
R² = 0.4073
0%
10%
20%
30%
40%
50%
60%
70%
400 1,400 2,400 3,400 4,400 5,400 6,400
MBB-enabled (3G/4G) share of Mobile Connections
vs Nominal GDP per Capita ($US) 2018(IMF, ITU, UN, We Are Social)
Algeria
Angola
Burkina FasoCameroon
Congo B
DRC
Egypt
Gambia
Ghana
Kenya
Niger
NigeriaRwanda
Sierra Leone
South Africa
Tanzania
Tunisia
Uganda Zambia
R² = 0.5593
0%
20%
40%
60%
80%
100%
400 1,400 2,400 3,400 4,400 5,400 6,400
MBB-enabled (3G/4G) Penetration (% Pop) vs Nominal GDP per Capita ($US) 2018
(IMF, ITU, UN, We Are Social)
107% 104% 103% 101%90% 85%
71% 65% 65%53% 52%
41% 40% 40% 39% 37% 35%27% 24% 21% 19% 18% 17%
-10%
10%
30%
50%
70%
90%
110%
Mobile Broadband Adoption as % of MBB Coverage at YE 2017 Sources: ITU January 2019 edition, MTN, Hardiman analysis
Based on MBB penetration of 82% and 3G coverage
of 80%. 4G coverage at YE 2017 was 35%.
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45HARDIMAN TELECOMMUNICATIONS LIMITED 45
Vodacom is clear market leader, with a subscriber market share of 44% at YE 2018. MTN is a strong 2nd throughout the country. The 2 smaller operators,
Cell C and Telkom SA make up only 25% of the market but have been increasing their market share consistently over past 4 years. 3G technologies
cover 98% of the population of South Africa.
Subscriber Market Share
• During the last five years the relative market shares of the four main
players have remained relatively stable:
• Vodacom is market leader with a 43% share of subscriptions at YE 2018.
Vodacom is perceived to have the highest quality offering, and is first
choice for business users. Vodacom offers the broadest and deepest
coverage of all South Africa’s MNOs across all technology types: GSM 2G,
3G UMTS, 4G LTE.
• MTN is a strong 2nd position throughout the country, but has recently lost
market share to smaller operators Cell C and Telkom SA. MTN’s network
coverage is similar to that of Vodacom
• Cell C Since 2015 Cell C has achieved consistent subscriber and market
share growth. We estimate that subscriber market share at YE 2018 was
17%. This does not include Cell C’s significant MVNO base – industry
sources report over 2m active MVNO SIMs.
• Telkom SA is smallest significant operator. Telkom has reported 9.7m
mobile subscribers at the end of March 2019 and had an estimated market
share of 8% at year end 2018.
Mobile Market Characteristics
South Africa – Mobile Market – Operators
Four established MNOs – Vodacom, MTN, Cell C, Telkom SA –share 97% of all active SIMs.
Source: Regulator, MNO, Hardiman Analysis
Vodacom43%
MTN30%
Cell C17%
Telkom SA8%
Other2%
South Africa Subscriber Market Share YE 2018
43% 42% 38% 41% 41% 44% 43%
37% 35%34%
37% 35% 31% 30%
15% 18% 23%16% 17% 17% 17%
3% 4% 5% 8%
3% 3% 3% 3% 3% 3% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018
South Africa Mobile Subscriber Market Share (%)
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46HARDIMAN TELECOMMUNICATIONS LIMITED 46
South Africa – Tower Market SummaryBoth Helios Towers and American Tower are active in South Africa
• South Africa has the largest tower market in Sub Saharan Africa with
an estimated 28,977 towers.
• The majority of the towers, 18,200 of the 28,581 are owned by the
MNOs.
• The independent towerco space is vibrant. There are a number of
small independent towercos, including Atlas Towers and Eagle
Towers, building and operating towers for the MNOs and developing
small cell solutions.
• Both American Tower and Helios Towers are active in South Africa.
• American Tower has 2,608 active towers in South Africa.
• In January 2019 Helios Towers acquired a controlling interest in SA
Towers
• Eaton Towers sold its 300 towers in South Africa to American
Tower in 2016
• American Tower entered the market by acquiring Cell C’s portfolio of
towers
• Gyro Group was created when Corporate Real Estate Services,
Telkom’s internal property division, was separated from the Telkom
Group.
• Independent towercos own and operate an estimated 15% of towers
Source: TowerXchange, Hardiman Analysis
, 10500, 36%
24%
23%
, 2608, 9%
Cell C2%
Sentech1%
Atlas Towers3%
SA Towers1%
Other Independent
TowerCo1%
Towers By Owner
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47HARDIMAN TELECOMMUNICATIONS LIMITED 47
94.8102.6 104.7 106.7 108.3 109.6 110.3 111.0
166%178% 179% 181% 182% 182% 181% 180%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
0
20
40
60
80
100
120
140
2017 2018 2019 2020 2021 2022 2023 2024
Mobile Subscribers (m) and Penetration (%)(Hardiman Analysis)
Mobile Subscriptions (m) Mobile Penetration (%)
South Africa – Mobile Market – Subscriptions and Penetration Forecast
Mobile penetration rate to remain exceptionally high, reflecting multi-SIM use: 180% in 2024
Summary of HTL forecast assumptions:
• Population at YE2017 was 57.1m Projected to
increase to 61.5m by YE2024 (+1.1% CAGR). [Source:
UN Population Division].
• Mobile subscriber penetration at YE2018 was 178%
(103 m subscriptions). Telkom’s subscriber growth has
been maintained. It added a further 1.1m subscribers in
Q1 2019. This run rate indicates that the year end
forecast of 179% mobile penetration may be achieved.
• We expect mobile subscriptions to increase to 111m
subscriptions by 2024 (+1.3% CAGR) – equivalent to
180% population penetration
Commentary on Assumptions:
a) Population
• We assume population growth in line with UN
forecasts: +1.1% CAGR during the period 2017 to
2024.
b) Mobile Penetration
• South Africa mobile penetration at YE2018 (178%) was
already exceptionally high in relation to nominal GDP
per capita. There are no true peer markets on the South
African continent. Thus benchmarking is difficult.
• IMF forecasts that South Africa Nominal GDP per
capita will grow from $US 6,180 in 2017 to $US 7,346 in
2023 (+2.9% CAGR).
• We project that this increase in GDP per capita will be
sufficient to support additional market SIM net adds of
around 1m per annum from 2019 to 2024. Mobile
penetration is likely to stabilise around 180%. This
assumes that multi-SIM ownership and use will
continue to be a feature of the market.
2017 2018 2019F 2020F 2021F 2022F 2023F 2024F
Source: Regulator, ITU, UN, World Bank, Hardiman Model
R² = 0.1749
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Mobile
Penetr
atio
n (
World
Bank)
GDP Per Capita ($US, current prices) [IMF]
Mobile Penetration in Sub-Saharan Markets at YE 2017 (%)vs. Nominal GDP per Capita ($US, current prices)
South Africa 2017
South Africa 2020
South Africa 2023
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48HARDIMAN TELECOMMUNICATIONS LIMITED 48
South Africa – Mobile Market – Mobile Broadband
Mobile broadband adoption growing strongly.
40m mobile broadband users at YE 2017 – 42% of total mobile subscriptions, equivalent to 70% MBB penetration of population. This may be a
reasonable proxy for unique mobile subscriptions. MBB coverage in South Africa is high, at 99% of population – versus SSA average of around 60%.
• Mobile broadband users grew from 29m at YE 2016 to 40m at YE 2017:
+40% YoY. Mobile accounts for over 95% of all broadband connections in
South Africa.
• Continued roll out of 3G networks and launch of 4G services will drive
further take-up of mobile broadband services.
• The ITU reports that MBB coverage in RSA is nearly complete: 3G –
99%; 4G – 78% at YE 2017
• However, affordability and access to smartphones remain key issues:
• The increased availability of cheap smartphones in South Africa will act
as a stimulus to mobile broadband uptake, notably among youth -
although South Africa’s exceptionally high rate of youth unemployment
is to be noted.
22.4
28.5
39.9
27%
32%
42%40%
51%
70%
25%
31%36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
10
20
30
40
50
2015 2016 2017
South Africa Mobile Broadband Subscriptions (m) and MBB Penetration (%) [Sources: ITU, Hardiman analysis]
MBB connections (m) RSA MBB as % mobile subs
RSA MBB penetration SSA MBB as % mobile subs
4%4%5%
9%12%12%13%13%13%14%15%16%17%18%
20%23%23%25%26%26%26%26%27%27%
29%31%
33%34%35%
41%45%
49%52%
54%56%
59%67%
70%82%
84%
South SudanNigerCAR
Guinea-BissauLiberiaBenin
BurundiMadagascar
EswatiniEthiopiaAngola
DRCCongo B
CameroonNigeria
ChadUgandaGuineaMalawi
Sierra LeoneMozambiqueSSA Average
SenegalGambia
Burkina FasoMali
TanzaniaKenya
RwandaZimbabwe
ZambiaLesotho
TogoCôte d'Ivoire
NamibiaMauritius
BotswanaSouth Africa
GhanaGabon
MBB Penetration (% Population) at YE 2017Source: ITU, Hardiman analysis
Source: ITU, NRAs, Hardiman Analysis
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49HARDIMAN TELECOMMUNICATIONS LIMITED 49
South Africa – Mobile Market – Mobile Broadband (3G and 4G)
Mobile Broadband demand well established – nearly two thirds of subscriptions actively use MBB
Sources: ITU, We Are Social, Hardiman Analysis
MBB take-up rate in South Africa is among the strongest in the region. MBB-enabled subscriptions (3G/4G) represented 62% of total mobile market
subscriptions at YE 2018 – equivalent to 100% population penetration. Focus now is on further extension of 4G coverage. 78% of population was
already covered by 4G at YE2017 – one of the highest rates in Sub-Saharan Africa.
107% 104% 103% 101%90% 85%
71% 65% 65%53% 52%
41% 40% 40% 39% 37% 35%27% 24% 21% 19% 18% 17%
-10%
10%
30%
50%
70%
90%
110%
Mobile Broadband Adoption as % of MBB Coverage at YE 2017 Sources: ITU January 2019 edition, MTN, Hardiman analysis
Based on MBB penetration of 70% and 3G coverage of
99%. 4G population coverage at YE 2017 was 78%.
Algeria
AngolaBurkina Faso
Cameroon
Congo B
DRC
Egypt
Gambia
Ghana
Kenya
Niger
NigeriaRwanda
Sierra Leone
South Africa
Tanzania
Tunisia
Uganda Zambia
R² = 0.5593
0%
20%
40%
60%
80%
100%
400 1,400 2,400 3,400 4,400 5,400 6,400
MBB (3G/4G) Penetration (% Pop) vs Nominal GDP per Capita ($US) 2018
(IMF, ITU, UN, We Are Social)
Algeria
Angola
Burkina Faso
Cameroon
Congo B
DRCGambia
Ghana
Kenya
Niger
NigeriaRwanda
Sierra Leone
South Africa
Tanzania
Tunisia
Uganda Zambia
R² = 0.40730%
10%
20%
30%
40%
50%
60%
70%
400 1,400 2,400 3,400 4,400 5,400 6,400
MBB (3G/4G) share of Mobile Connections
vs Nominal GDP per Capita ($US) 2018(IMF, ITU, UN, We Are Social)
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50HARDIMAN TELECOMMUNICATIONS LIMITED50
I Executive Summary Page 3
II HT – Mobile Markets Overview Page 5
III Estimated Market Size Page 12
IV Forecast Market Demand Page 14
V Technology Forecasts Page 20
VI Deep Dive By Market Page 250.36
VII Glossary Page 50
Page
51HARDIMAN TELECOMMUNICATIONS LIMITED 51
Glossary
Glossary
3G 3rd Generation Mobile (UMTS) MFS Mobile Financial Services
4G 4th Generation Mobile (LTE) MNO Mobile Network Operator
4-Play Bundle of 4 products MVNO Mobile Virtual Network Operator
ARPTCAutorité de Régulation de la Poste et des
Télécommunications du CongoNCA National Communications Authority
ARPU Average Revenue Per User NRA National Regulatory Authority
B2S Build To Suit O&M Operations and Maintenance
DSE Dar Es Salaam Stock Exchange PoS Point of Service
GB Giga Byte SIM Subscriber Identity Module
HT Helios Towers SSA Sub Saharan Africa
IPTV Internet Protocol Television TCRA Tanzania Communications Regulatory Authority
LTE Long Term Evolution (4G) UMTS Universal Mobile Telecommunications Service
Mbit/s Mega bits per second
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52HARDIMAN TELECOMMUNICATIONS LIMITED 52
• A single tower can host multiple Operator tenants. Each Operator tenant can be considered an Operator PoS – a tenancy on a HT site
• A single Operator tenant can have equipment for multiple networks 2G, 3G and 4Gdeployed under a single rental agreement. Each network served can be
considered to be a Network PoS. HT is technology agnostic, it sells tower capacity to the Operator. It does not charge based on the technology deployed.
• In the HT markets the Operators generally colocate 3G and 4G equipment on 2G sites.
• When an Operator installs 3G equipment on a 2G site this is an additional Network PoS. This may generate additional income for the TowerCo as additional
tower capacity will be required. There is no increase in Operator PoS (tenancy).
• In this report the term PoS refers to Operator PoS
PoS Definition
MNO 1
MNO 2
MNO 3Tower
2G
3G
4G
TRX 1
TRX N
Operator PoS Network PoS TRX1 PoS
Microwave
Antennae for
Backhaul
2G/3G Sector Antennae
with associated RRUs
2G/3G Sector Antennae
with associated RRUs
Brackets for expansion
(1) TRX is a physical transmitter / receiver unit