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Wednesday, 5 September, 2001, 14:29 GMT 15:29 UK
Africa set for mobile boom?
Nigeria street scene
Fixed line penetration is low in Africa and mobile usage is expected to boom
Telecoms provider MSI Cellular has raised a further $120m (84m) to finance its expansion in Africa.

The telecoms company which aims to be a pan-African provider is already licensed to provide GSM services in several countries.

Demand for mobile services is starting to take off, its deputy chief executive Terry Rhodes told the BBC's World Business Report.

His belief in the future of the African mobile market is shared by other telecoms companies, even as world telecoms markets continue to crash.

It is now starting to take off and follow the same trend as the rest of the world

Terry Rhodes, deputy chief executive, MSI Cellular

One traditional view of the African telecoms market has been that extreme poverty will prevent penetration from ever exceeding about 1% of the population.

However, MSI's Terry Rhodes disputes this, pointing to Gabon, where in some parts penetration is now close to 10%.

"It is starting to take off and follow the same trends as the rest of the world has done," he said.

Access to crucial services

In the Western world, there may have been poor take-up of new services because of the lack of a "killer application" to boost demand. In Africa, mobile phones may ultimately provide access to crucial services.

Telecoms companies in Nigeria have already seen a strong take-up for new GSM services launched late last month.

While many licences have already been awarded across Africa, the challenge now lies in increasing penetration.

"Much of the demand is in the capital cities...Once we have started there, we start covering as much of the rest of the country as we can," Mr Rhodes said.

Helped by slowdown?

The slowdown in telecoms markets across the world could even help boost sales in Africa.

"The good news is that perhaps as European and other Western markets slowed down, the cost of handsets and infrastructure is coming down as well.

"We will pass all those savings on to make the cost of usage in Africa as cheap as possible, so that we can increase penetration and take-up in Africa," Mr Rhodes said.

In the three years since MSI Cellular set up for business, it has been licensed to operate GSM phone networks in Uganda, Zambia, Malawi, Congo, Gabon, Sierra Leone, Chad, Burkina Faso, Sudan, Niger and Guinea.

These licences cover 175 million people, effectively one quarter of the African population, the company claims.

Shareholders in MSI include IFC, the private sector arm of the World Bank, Citigroup and Mitsui.

MSI Cellular's Terry Rhodes
"It is starting to take off and follow the same trends as the rest of the world"
See also:

22 Aug 01 | Business
African telecoms sales on hold
28 Aug 01 | Business
Nigeria's digital mobile bonanza
19 Jan 01 | Business
Nigeria awards telecoms licences
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