While being the worlds most rapidly growing market for mobile telephony, Africa is also home to some of the fastest growing fixed-line markets in the world, albeit from a small base. The continent still has some of the world's lowest penetration rates in both market sectors.

The difficulties of rolling out fixed-line networks across its vast land mass have meant that by early 2007 mobile users constituted almost 90% of all African telephone subscribers. However, as lower and lower income groups are being targeted, a price-sensitive market for lower-cost fixed or limited-mobility services is emerging.

A surge in demand for Internet access and broadband capabilities is accelerating this fixed-line renaissance in some of Africa's more advanced markets. Despite reasonable growth of the traditional fixed-line markets in some countries, subscriber access to both voice and data services is shifting more and more to fixed-wireless solutions as a substitute for inadequate fixed-line infrastructure.

Several international fibre projects currently under development will deliver the necessary bandwidth to Africa, increase competition in this sector and bring down costs. Several countries have embarked on national fibre backbone rollouts to take new services beyond the capital cities. However, satellite will continue to play a significant role in reaching Africa's extensive rural and remote areas.

Foreign investors are scrambling for positions in this very lucrative market as liberalisation continues, national telcos are being privatised and new operating licenses issued.

Key highlights:
Fixed-line market forecasts to 2010 and 2015 for 16 African countries;
Converged licensing regimes increase competition in the fixed-line sector;
Several new submarine fibre projects currently under development will improve the supply of international bandwidth at drastically reduced prices;
Privatised national telcos are highly profitable;
Fixed-line incumbents are expanding WLL systems and pushing fixed-mobile convergence;
Major WiMAX launches planned for 2008;
Morocco's second and third fixed-line operators gain 34% market share within six months after launch.
Fixed lines in service and teledensity in Morocco - 1994 - 2007

Year Fixed lines (MT) FWA (Meditel, Wana) Teledensity
1994 1,007,000 n/a 3.9%
1995 1,128,000 n/a 4.2%
1996 1,208,000 n/a 4.5%
1997 1,301,000 n/a 4.7%
1998 1,393,000 n/a 5.0%
1999 1,471,000 n/a 5.3%
2000 1,425,000 n/a 5.0%
2001 1,191,300 n/a 4.1%
2002 1,127,400 n/a 3.8%
2003 1,219,200 n/a 4.0%
2004 1,308,600 n/a 4.2%
2005 1,341,200 n/a 4.3%
2006 1,266,100 100,000 4.4%
2007 (Jun) 1,280,000 660,900 6.0%

(Source: BuddeComm based on ITU, ANRT and industry data)