The introduction of 3G will expand the already dynamic mobile market

Text size +-

After several years of delays, Gabon issued two 3G/4G licences in the first half of 2014 and saw the tentative launch of the country’s first 3G service in April. The absence of high-speed mobile and fixed internet connections has been an obstacle to the development of the country’s economy and, most notably, the government’s goal of transitioning to a digital economy by 2016. With Airtel already providing faster data connections in Libreville and Gabon Telecom to follow before the end of 2014, the telecoms sector stands to see considerable growth in the near term.

First Up

Airtel, a subsidiary of India’s Bharti Airtel and the largest telecoms operator by market share, obtained the first 3G/4G operating licence in January at a cost of CFA5.5bn (€8.3m). Part of the delay in issuing the licence tender was due to the state’s reflection over whether to move directly to 4G technology, and the joint licence awarded will allow companies to do so without a second licensing process. Gabon Telecom, majority-owned by Maroc Telecom, won its 3G/4G licence in March 2014 on the sidelines of a bilateral investment conference with Morocco, and the firm plans to launch service before year-end 2014. Meanwhile, Airtel announced it will introduce 3G coverage in stages. The first tranche service began on April 18, 2014, covering northern Libreville from the city centre to the northern suburb of Angondjé, the location of new housing construction projects and the capital’s main stadium and conference centre. Airtel plans to launch service in the rest of Libreville and the port town of Owendo by the end of the second quarter, and Port-Gentil and other provincial capitals by the end of 2014.

Market Impact

The introduction of 3G will allow more sophisticated data services, which are necessary to create new sources of revenue. With a gross penetration rate almost 194% and a real mobile penetration rate at nearly 100%, Gabonese operators will have to deepen the market to maintain strong growth rates. Mobile internet usage has grown exponentially, even before the introduction of 3G. Subscribers increased by nearly 80% in 2012 as prices began to fall, and by another 26.3% in 2013 to reach 582, 964 by year-end.

Growth Opportunity

Services such as voice over internet protocol, videoconferencing, mobile television and data sharing currently represent less than 5% of revenue, according to industry estimates, leaving significant room for growth in these services. And yet, all four mobile operators saw the share of their revenue from mobile internet increase by up to nearly two percentage points in 2013. For the smallest operator, Azur, it accounted for 1.48% of total revenue, up from almost nothing in 2012. Data revenues hit 5.45% of Airtel’s annual revenue, up from 3.6% in 2012, according to the Regulatory Agency for Electronic Communications and Postal Services. As connection speeds rise and access prices fall, higher-value data services are likely to drive sector turnover in the coming years.

The 3G launch will also pave the way for services with potential for social and economic development such as mobile banking, health, education and insurance offerings. With an urbanisation rate of 86%, rural populations often have insufficient access to basic social programmes and financial services, so moving these tools onto mobile platforms will be the best way to ensure more inclusive economic growth.

Increasing Bandwidth

However, widespread usage of these services will require a much larger bandwidth than is currently available in Gabon. The Africa Coast to Europe (ACE) submarine fibre-optic cable has doubled national capacity to 4.9 Gbps, providing the necessary bandwidth for Gabon’s digital economy goals.

Before 3G service can fully take off at a national level, the country will need to effectively commercialise access to the ACE cable, extend the fibre-optic backbone outside of major urban centres, and complete its transition to digital television in order to free up existing spectrum for mobile data transfers. These efforts do demand large-scale public and private investment, but once these are in place, they create the space needed for 3G to realise its significant economic potential.

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Gabon 2014

Telecoms & IT chapter from The Report: Gabon 2014

Cover of The Report: Gabon 2014

The Report

This article is from the Telecoms & IT chapter of The Report: Gabon 2014. Explore other chapters from this report.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart