Developing Telecoms | Cameroon: low penetration and ARPU could be solved by increasing competition

17 May 2012

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Cameroon: low penetration and ARPU could be solved by increasing competition

Thursday, 24 March 2011 10:16 | James Barton

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Cameroon's economic growth has lagged behind other countries in the region, and this is mirrored by the development of its telecommunications sector, according to new information from Research & Markets. It is one of only a few countries in Africa left with only two competing mobile networks, MTN and Orange. The re-entry into the mobile market by fixed-line incumbent Camtel as the third player has been delayed by controversy regarding its licence.

The result is a mobile market penetration rate that is below the African average and also below that of other countries with similar GDP per capita levels. Third generation (3G) mobile service has still not been introduced apart from Camtel's EV-DO fixed-wireless service. Fixed-line penetration is extremely low, and the privatisation of Camtel's fixed-line business has failed several times.

Mirroring a trend throughout developing markets, the average revenue per user in Cameroon's mobile sector has fallen continuously as lower income groups gain access to services. The operators are trying to generate new revenue streams from the virtually untapped Internet and broadband market by introducing mobile data and WiMAX wireless broadband services.

Camtel has been allowed to monopolise access to the SAT-3/WASC international fibre optic submarine cable, which has led to extremely high prices and a grey market of unlicensed satellite gateway operators offering Internet access and Voice over Internet Protocol services. A major expansion program for international fibre connections and a national fibre backbone network is underway with funding from the World Bank and China.

Under a more liberal regulatory regime, Cameroon's telecommunications market could catch up very quickly with its peers in the region. The industry regulator has indicated it plans to complete the privatisation of Camtel and increase competition by licensing more operators.

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