Senegal’s economic growth has improved steadily in recent years, with GDP having grown at about 7% in 2017 and 2018. This has translated into consistent growth in the telecom market, with the number of mobile subscribers having increased 4.5% in the year to June 2018. Orange Group’s local subsidiary Orange Senegal (Sonatel) is the dominant player in both the fixed-line and mobile sectors, though there is effective competition in the mobile sector from Tigo Senegal (now owned by Saga Africa Holdings) and Sudatel’s local unit Expresso, which have a 24% and 22% market share, respectively.
Competition in the fixed-line sector was introduced when Expresso launched services as the second national operator (SNO) in 2009. The new entrant initially chose CDMA2000 technology to serve both market segments but switched to GSM technology in 2010, including 3G/HSPA mobile broadband. Despite its market entry, Sonatel commands a near monopoly on fixed lines.
The mobile market has prospered, helped in part by poor fixed-line infrastructure in some rural areas. Mobile penetration reached about 106% by mid-2018. A range of value-added services is available to subscribers, including mobile broadband access, which has become by far the dominant internet platform, accounting for about 99% of all internet accesses as of mid-2018.
Recent licensing developments will help propel the LTE sector. In June 2016 Sonatel secured a 17-year LTE licence (reduced from 20 years), as well as an extension to its fixed-line, 2G and 3G operating concessions (which had been due to expire in 2017) for no additional cost. The LTE licence includes the use of 10MHz of spectrum in the 1800MHz band and 10MHz in the 800MHz band. Sonatel must provide 70% population coverage within five years and 90% coverage within ten years.
Development of the internet market until 2007 was hampered by Sonatel’s monopolistic pricing of bandwidth on the only high-capacity international submarine fibre optic cable serving the country. Competition in the DSL sector was also hindered by the lack of local loop unbundling regulations. Shortly after this facility finally became available in July 2018 three ISPs were granted licenses, each with coverage obligations in five regions of the country.
BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Key developments:
Tigo Senegal sold to Saga Africa Holdings;
Tax on telecom services increased to 5%;
Tigo Senegal secured LTE licence;
Expresso launches E-Money platform;
Sonatel delivers LTE to 50% of the population;
Senegal Internet Exchange Point (SENIX) is opened;
Tigo and Sonatel inaugurate Tier III data centres;
Regulator awards more MVNOs licenses, deactivates some five million unregistered SIM cards;
Digital Senegal 2016-2025 programs to cost XOF1,346 billion;
ATOS Senegal replaces the State IT Agency (ADIE) to manage the 3,000km fibre network;
Report update includes the regulator's market data to June 2018, operator data to Q4 2018, Telecom Maturity Index charts and analyses, assssment of the global impact of COVID-19 on the telecoms sector, recent market developments.
