Telecom Industry analysts Frost and Sullivan has said it has become critical for telecom operators in Sub-Saharan Africa to expand into rural areas as subscription in urban areas was fast reaching saturation. This was contained in excerpts of a report on a study Frost and Sullivan conducted on the telecom market in Sub-Saharan Africa. “Rural expansion has become critical for operator strategies and it presents the largest growth potential to help operators address the issues of urban market saturation. "Operators that move into the rural markets, and do so fast, will reap the first mover advantage in the short to medium term," Frost and Sullivan’s ICT Business Unit Leader for Africa, Birgitta Cederstrom was quoted as saying. Mobile subscription in Africa reached 506 million in November 2010 and it has been projected to reach 842 million in the next four years. The report noted that even though the telecom market in the Sub-Saharan Africa continued to be hampered by intensifying competition and near saturation, operators remained hesitant to expand into rural areas. It said the cost of doing business in Sub-Saharan Africa had risen and was likely to increase further with rural expansion, but telecom operators had no choice. Cederstrom also noted that outsourcing, managed services and infrastructure sharing (co-location) were set to become critical aspects of operator strategies. The report also noted that demand for data and wireless service was fast becoming the main cash cow for telecom service providers. “Wireless technology has become the primary mode of communication in Africa and continues to enjoy double-digit growth,” it said. Frost and Sullivan have therefore urged telecom operators in the sub-region to also start considering rejecting strategies aimed at voice subscriber acquisition and focus on developing data strategies for low-cost models, particularly in the urban areas and for enterprises. Broadband susbcription in Africa is estimated to reach 265 million in 2015. The report indicated the telecom market in Sub-Saharan Africa earned revenues of $50 billion in 2009 and that was estimated to reach $88.1 billion in 2016. "The key drivers for growth for the telecommunications sector include exponential growth in wireless and data technologies and services," it said. It said the growing demand for broadband and data services, especially by the enterprise sector, intensifying competition and mass market targeted strategies would define the market landscape. “Enterprise data services had emerged as a key cash cow for telecoms providers,” she said. The report said accelerated growth in data and wireless service had attracted new participants into the market, with the resulting competition compelling operators to become more creative in their product offerings. "Mobile money is the main offering for mobile providers while end-to-end connectivity and communication services have become important differentiators in the internet services market," remarks Cederstrom. "Fixed mobile convergence will be a key future differentiator in both the mobile and fixed line service segments." The report however noted that the market would be confronted by many challenges including the low level of foreign direct investment and its resultant slow development of the broadband market in the region. It said low disposable income levels, paralleled by the high cost of computers, were also limiting consumer demand for broadband services. Story by: Samuel Nii Narku Dowuona/Adom News/Ghana