Dynamic market stunted by demand-side constraint Onkokame Mothobi and Francisco Mabila Research ICT Africa Cape Town, South Africa CPRsouth 2018, Maputo-Mozambique. 3.9.2018

Movitel entry shakes up the market in 2012 Mozambique was one of the first countries to adopt telecommunications reforms Despite the telecom sector being seen as the most open, the fixed line market remains uncompetitive and undeveloped Competition intensified in 2012 following the entry of the third player

Intensive competition in the market Vietnamese backed Movitel has shaken up the Mozambican mobile market with its high investment low cost business model — creating the largest 2G/3G network in the country and winning an unprecedented third entrant share of 37% of subscriber based market share in its first year of operation. Incumbents, Vodacom and MCel have faced intense competition from the late entrant, with mCel being close exiting the market and Vodacom ultimately gaining the giant share of the market with 41% of subscribers compared to Movitel at 29% and MCel down to 30% following the introduction of SIM registration, which took unregistered users off the network.

Pricing competition as a strategy to gain market share Vodacom responded to this pressure by initially responding to pricing pressure while investing heavily in its network and competing against Movitel on quality rather than price. The inability of the incumbent mobile operator, MCel, and the fixed line incumbent, TDM, to respond to these pressures have resulted in a decision by Government to merge the two operations by the end of the year. As of 2017, the two operators were reported to have accumulated a debt of more than MZN 14 billion (USD 230 million)

Revenue share

How does Mozambique compared with other African countries in the RAMP Index Prices for data and voice have fallen dramatically resulting in Mozambique ranking 24th out of 49 countries on the RIA African Mobile Pricing (RAMP) Index and third out of 49 African countries on the RAMP 1G Data Index.

Why then are majority not online?

Nationally representative surveys of ICT access and use by households & individuals aged 15-65; In 16 developing countries; Data represents 30% of the global population; 28,900 face-to-face interviews; +/-3 margin of error Sample sizes

Sample Two sampling frames were available for South Africa based on the 2011 census: Enumerator Areas (EAs) and Small Layers (SAL) Out of 90, 425 EAs, a total of 75 EAs were sampled using SRS 47 urban areas and 32 rural areas were sampled ( 60% urban : 40% rural split) The target sample of 1800 was spilt in to 60% urban and 40% rural, yielding a target of 720 rural and 1080 urban households Household and individual weights were then constructed based on the census and world data on urban and rural, male and female proportions

Individual sample structure Table 1:Sample characteristics After Access survey World Bank Male 44% 48% Female 56% 52% Urban 33% Rural 67% Source: World Bank Population Review, 2018               Instituto Nacional de Estatistica, 2018

Individual sample structure Table2:Main activity during the last 6 months National Female Male Urban  Rural Student/pupil 13% 16% 15% Unpaid housework (e.g. housewife) 38% 19% 53% 27% 43% Retired 1% 0% 0,4% Unemployed, seeking for a job 10% 14% 8% Unemployed, not looking for a job 6% 5% 3% Disabled and unable to work Employed 7% 11% 17% 2% Self-employed 24% 29% 20% 25%

Supply- vs Demand-side indicators Table2:Main activity during the last 6 months National Female Male   After Access Survey ITU Statistics Difference (bias) Ghana 26% 35% +9% Kenya 0% Mozambique 10% 18% +8% Nigeria 30% -4% Rwanda 9% 20% +11% South Africa 53% 54% +1% Tanzania 15% 13% -2% Source: RIA ICT After Access 2017 and ITU Statistics, 2017

Development indicators Table 3:  Electricity and water connection to the household Mozambique Rwanda Tanzania South Africa No electricity 52% 68% 53% 6% Main electricity grid 24% 29% 33% 89% Generator 0.3% 0,3% 1% Solar 22% 3% 18% No piped water 84% 80% 86% 27% Piped water into the yard 14% 10% Piped water into the house 2% 4% 40% Source: RIA After Access Survey, 2017

Households with no electricity

Household ICT use location gap Table 4: Household ICT use National Urban  Rural Location gap Landline 1% 2% 0,1% 95% Desktop 5 0,3% 94% Laptop 7% 4,0% 43% Tablets 8% 15% 73% Television 23% 40% 10% 75% Radio 37% 35% 13%

Household indicator rural-urban gap?

Mobile phone ownership, Internet use and GNI per capita

Mobile phone gender gap

Gender gap in Internet use

Reasons for not using the Internet

Huge urban-rural devide in Internet use in Mozambique and Tanzania

Reasons for not owning a smartphone

Reasons for not owning a smartphone

Digital activities

Activities on the Internet

Mobile money services

Mobile money use

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