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The recent news that Myanmar will soon revamp its telecom market by offering two telecom licenses to either local or foreign players in H12013 will quite possibly be the wireless story of the year for Southeast Asia.
While figures are scarce and unreliable, the country certainly has a single-digit mobile user ratio but is set to soar to upwards of 80% according to government projections.
With the global mobile SIM base projected to surpass 100% over in 2013, there are still a handful of countries in the world where SIM ownership is still relatively uncommon. Ranking the least penetrated markets excluding Myanmar as of the end of 2012 gives us the following order:
1. North Korea – 2012 Mobile Penetration Rate: 6.9%
Although hard to believe, the North Korean market has actually expanded significantly since Orascom entered into a JV with the local government in 2009. Obtaining a phone is still involves a long bureaucratic process which has also reportedly created a rife grey market, but Kyorolink`s exclusivity is ending soon which could lead to even another player in the medium term.
2. Eritrea - 2012 Mobile Penetration Rate: 7.2%
Also located in the Horn of Africa, this market is the least developed in Africa as the fixed and local markets are a total monopoly and there is only limited competition in the ISP space. While the government of Eritrea has taken initial steps to privatize the company by offering shares to local investors.
3. Cuba – 2012 Mobile Penetration Rate: 11.3%
The government allowed all Cubans to purchase mobile phones in 2008 although mobile Internet is not available and postpaid contracts start at $30 per month in a market where the average wage is $19 per month. As the operator is a monopoly and the economy is state-managed the situation is unlikely to change without major political reform.
4. Kiribati - 2012 Mobile Penetration Rate: 16.2%
An archipelago spanning 3.5m square miles with a population of roughly 105,000 people, mobile service was introduced to Kiribati in 2004. However due to the high cost of international bandwidth and corresponding high prices, mobile uptake is low. A deal to bring Oceania operator Digicel to the market fell through in 2010, meaning that international aid is the biggest hope for expanding mobile services.
5. Somalia – 2012 Mobile Penetration Rate: 16.3%
Despite piracy, a civil war and the lack of a functioning regulator, Somalia actually has six mobile operators, although most largely functioning one of the country`s several de-facto autonomous regions. In Somaliland - one of these regions - the local operator claims that 40% of its users use mobile money services, which have filled in for the non-existent banking sector.
6. South Sudan - 2012 Mobile Penetration Rate: 21.2%
The world's newest country also has one of the world's lowest penetration rates. After the partition of Sudan, many mobile networks had to be both physically and financially divided as well and despite the fact that the country faces hostilities with its neighbors and lacks a solid regulatory framework prospects are perhaps the best of all the countries on the list. The market has five players including pan-regional operators such as Zain and MTN, and the fact that it is a distinct geography now means that there is considerably more attention and investment directed towards the country - meaning subscribers could as much as triple in the next five years.
7. Burundi - 2012 Mobile Penetration Rate: 22.3%
Burundi is a sub-Saharan African nation near the center of the continent and is one of the three lowest GDP per capita countries in the world. The country is also hilly and suffers from a lack of infrastructure but like South Sudan, Burundi has high growth potential. The country of 10 million has five mobile operators (although two recently had their licenses suspended) which has pushed down prices and forced operators to expand coverage, hence high growth is expected to continue.
8. Ethiopia - 2012 Mobile Penetration Rate: 23.8%
Ethiopia is by far the largest market on the list with a population of 84 million. The market is controlled by monopoly Ethio Telecom, although since 2010 has been managed by France Telecom. While the situation has improved under foreign management, the government has no immediate plans to either privatize the operator or introduce competition in the market, as ETC is a government cash cow and the second-largest company in the country.
9. Tuvalu - 2012 Mobile Penetration Rate: 24.3%
Tuvalu is an island nation of 12,000 located halfway between Australia and the United States, and hence capacity constraints have severely limited feasibility of providing service. Limited service is backhauled by satellite but - as is true in Kiribati - the economic feasibility of the service is severely limited. Digicel has expressed interest in entering the market, but no deal has been reached as of yet.
10. Djibouti - 2012 Mobile Penetration Rate: 24.8%
The third Horn of Africa country on the list, Djibouti is similar to Eritrea in the fact that the market is a total monopoly under Djibouti Telecom, which has kept prices high in spite of the fact that the country is a major landing site for submarine cables and the country actually resells capacity to its neighbors. While the privatization of DT and the liberalization of the sector have been discussed, there are no firm plans to do so at this point.
Unsurprisingly, all the countries on this list are either dictatorships, isolated islands or located in the impoverished Horn of Africa or Sub-Saharan region, and more often than not monopolies. It is also important that these numbers are SIM-based and unaudited and therefore inflated to begin with. While a few of them do show some signs of hope from a booming mobile money market in Somalia to even a new operator in North Korea. But without serious political, economic and regulatory reforms, the mobile broadband experience won't be enjoyed by everyone for some time to come.
Marc Einstein is a telecom analyst/consultant. He is based in Tokyo.