Africa and the Middle East (AME) — a region in which we include Africa, the Gulf, the Levant, Iran and Turkey — is an area with limited-to-no wireline connectivity, especially in rural areas, while cellular operators actively provide their services. Broadband adoption lags other regions, but we project that broadband Internet lines (including wireless technologies) in AME will reach a total of 81.8m lines by the end of 2014.
AME has the lowest broadband penetration rates on the globe. North America and Western Europe lead, followed by Central and Eastern Europe (CEE). However, in terms of forecast subscriber growth rates, AME represents an attractive opportunity: We project the region’s CAGR between 2009 and 2014 to be 20.4% (see Exhibit 1). Furthermore, AME is outpacing all developed regions in terms of growth in adoption of wireless technologies. Although the mobile broadband markets in Latin America and CEE, with their comparatively higher GDP, will be growing slightly faster than that of AME, AME’s growth rate over the next four years will still exceed that of Western Europe and North America.
We expect broadband penetration in AME to rise from 2.6% in 2009 to 6.2% in 2014, driven primarily by slow but steady economic growth and the region’s favorable demographic environment, in which more than 40% of the population is under the age of 15. The growth will be driven by wireless technologies, such as WiMAX and 3G, in order to compensate for the weak wireline infrastructure. This Insider examines the current and forecast broadband landscape in AME in terms of subscribers and revenue and then looks more closely at the technologies that will enable this evolution on both the mobile and fixed sides. Finally, we look at three key markets in more detail: the UAE, which exemplifies the most-developed parts of AME; Nigeria, which illustrates the underdeveloped, sub-Saharan region; and Turkey, which represents the region’s middle-income markets.
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