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The Telecommunications Sector in Africa

The telecommunication sector is another area for your investment in Africa. The rise of business potentials and more foreign investments sparked the telecom revolution. Since more African countries have undergone liberalization and privatization, telecommunication infrastructures have improved drastically. Uganda, Tanzania, Nigeria, Sudan, South Africa and Kenya are the those countries to name a few. Many African governments privatizes their former state-owned enterprises to give way to the growth of the said sector.

As of now, South Africa is the main point of telecommunication in the whole African continent. Although the country has been making an accelerated move into the region, the area is still too big. There is a wide range of people in need of communication links, and the need for better communication system keeps on increasing. To create more progress, Africa needs to connect to the whole world. And for upcoming investments, communication is essential to make business success possible.

According to International Telecommunications Union (ITU), Africa only has two telephone lines per 100 people. A very poor data compared to Europe’s four for every 10 people. They also said that growth in Africa’s telecommunication sector is yet to be experienced. But after five years, the sector is steadily growing. The region showed a considerable development specifically in mobile communications.

While fixed line telecommunication systems are developing at a rather stagnant pace, the development of wireless and mobile communication technologies and the heavy investments made in the telecommunications market have tremendously improved the growth of the sector. In 2004, only 6 percent of the total number of Africans own a cellphone, but now there are a lot of them. There are now more than 82 million mobile users in Africa: Nigeria’s mobile market is growing at over 100% per year. Mobile telephony has a positive and significant impact on economic growth, and this impact may be twice as large in developing countries as in developed countries.

The government was able to address the problems why telecommunication service was then poor. Before the development, low penetrations are caused by: 1. lack of investment, 2. investment inefficiencies, 3.) inadequate private sector involvement, 4. foreign exchange scarcity, 5. poor management incentives and 6. insufficient regional development. But all of these are defunct now. More investments are entering the region, thus, creating more growth in different sectors including the telecommunications.

Africans are not just the group beneficial of this growth, business firms are also absorbing something from it. Communication is a vital factor for one’s growth in business. It connects people and business. This is why telecommunication sector is another opportunity for people who have an interest of investing in Africa.

With the technology being introduced to the continent, a potential huge market is born. In no time, people will embrace these innovations. Instead of a luxury, it will become one of the primary needs, just like what happened to other countries. The demand for better communication will grow and everything else will follow.

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