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DRC’s mobile market consolidation with sale of Tigo Congo to Orange
Saturday, August 20, 2016 7:14:42 AM America/New_York
Following a 30-year dictatorship between 1967 and 1997, the Democratic Republic of Congo (formerly Zaire) has suffered from several wars and considerable social upheaval. There remain violent conflicts in the eastern part of the country, exacerbated by considerable corruption within the government as well as by ethnic tensions resulting from disputes among and within bordering countries which have spilled over in the DRC itself. These circumstances have made it difficult for the government to extend its control effectively in these regions.
The economy is heavily dependent on revenue from the mining sector though much economic activity occurs informally and is not reflected in GDP data. The global economic crisis reduced GDP growth to around 3% in 2009, but it has returned to above 8%. It is expected to remain stable at that level for the next two to three years, largely supported by mining, though the accuracy of monitored economic growth is questionable.
Largely due to the country’s troubled history, the national telecom system remains one of the least developed in the region. The national operator, SCPT, theoretically has monopoly rights under 1970 legislation. However, recognising the need for telecommunications infrastructure, the government is only loosely regulating the sector. SCPT has little capital to invest, and so much of the investment in infrastructure is from donor countries or from the efforts of foreign (particularly Chinese) companies and banks.
Mobile network operators are the principal providers of basic telecom services. By 2001, some 16 private operators had been granted mobile telephony licences and the subscriber base grew rapidly. The proliferation of networks, and the poor monitoring of also spectrum assets, caused frequent problems with spectrum shortages, interference and compatibility issues. As a result, the mobile sector has since consolidated. In the latest round of consolidation, Orange Congo completed its acquisition of Tigo Congo in April 2016, which greatly increased its market share. In late 2015 Yozma Timeturns eventually launched services, having been awarded a mobile licence in 2009.
Development of the DRC’s internet and broadband market has been held back by the poorly developed national and international infrastructure. However, the country was finally connected to low-cost, high-quality international bandwidth through the WACS submarine fibre optic cable in 2013, and SCPT is rolling out a fibre optic national backbone network with support from China. International bandwidth is still limited, and as a result internet pricing is high and backhaul capacity (for both fixed and mobile internet services) is low. An alternative terrestrial international fibre connection exists via neighbouring countries. Broadband access is provided by 3G mobile services and wireless networks using WiMAX and EV-DO technology. The country’s first commercial LTE networks are imminent. Mobile operators are keen to develop mobile data services, capitalising on the growth of smartphones usage, but in mid-2016 their attempts to dramatically increase mobile internet pricing was criticised by the regulator.
For more information see – Democratic Republic of Congo - Telecoms, Mobile and Broadband - Statistics and Analyses