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Study: Africa is World's Fastest Growing Mobile Phone Market - 2004-05-06

A new survey on mobile phone usage in Africa has found that the continent is now the fastest growing mobile phone market in the world. Africa is also the first continent to have more mobile phone users than land-line subscribers.

The Africa-wide study was conducted by the Geneva-based International Telecommunications Union, a U.N.-related organization, which coordinates global communications services.

A spokeswoman for the organization, Vanessa Gray, says the survey shows that mobile phone use in Africa has increased at an annual rate of 65 percent for the past five years, or twice the world average.

Last year, some 13 million Africans became new mobile phone subscribers, bringing the total number of subscribers on the continent to about 52 million.

Ms. Gray says the surge has surprised even the most optimistic market watchers. "I think what is important is to see this in contrast to the fixed-line market, which, at the end of 2003, stood at only 25.1 million," she said. "One of the main reasons the mobile has been so successful is that there is effectively a lack of fixed lines in the continent."

Ms. Gray says Africa's mobile phone market has also greatly benefited from several factors. A number of countries have implemented reforms, allowing major African mobile phone service providers, such as Egypt's Orascom and South Africa's Vodacom, to fight for market share and drive down costs.

"A lot of countries have liberalized the market and have introduced competition," said Vanessa Gray. "And also there are a number of strategic investors in Africa, which has contributed to knowledge and to experience in the way mobile services are provided. And also very important is the fact that people can have pre-paid cards so that they do not have to subscribe to the service. People that could not have a fixed line because they do not have the financial backing could now have a pre-paid mobile card."

The survey shows that one of the fastest growing mobile phone markets in Africa is Nigeria, which in recent years has opened its telecommunications market to intense investor competition.

Countries that show little to no growth in mobile phones include war-torn Congo (Kinshasa), the Central African Republic and Burundi. On a continent where some of the world's poorest people live, observers say future growth of mobile phones and services will depend not only on political stability, but on affordability.

They say the next major challenge of mobile phone service providers will be to reach into rural areas, where millions of people still lack the income to afford even the most basic services, such as electricity and running water.