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Dissertation: Sub-Saharan Africa is the new hotspot for mobile network investments

Sub-Saharan Africa is among the hottest playing fields for mobile telecoms firms yet the international investments are not driven by economic factors alone, argues Marcellinus Dike in his doctoral dissertation.

Mobile telecoms contributed roughly 8% (US $110 billion) of Sub-Saharan Africa’s GDP in 2016, generating significant amounts from license and regulatory fees, spectrum auctions, as well as from tax revenues. Marcellinus Dike has studied in his doctoral research the rapid expansion of mobile telecoms industry and competition among Mobile Network Operators (MNOs) across the 49 countries of Sub-Saharan Africa.

‘Mobile telecoms have a huge impact in the economy of Sub-Saharan Africa. The industry provides over 3.5 million jobs and gives the fast-growing population access to entirely new services, for example in education, healthcare delivery, finance and money transfer,’ says Dike, who will defend his dissertation at the Aalto University School of Business on 25 May 2018.

Competitive dynamics of emerging market

Dike’s unique empirical data shows how European, Asian, and African MNOs have intensified their activities in the region since the inception of the mobile telecoms sector in the late 1980s until to date. Level of corruption in the country and colonial ties have a strong influence on how MNOs invest in the regional market.

‘While previous research assumes that international investments are driven by economic reasons, my study rather demonstrates that institutional and historical factors are often much more important,’ says Dike.  

For instance, Vodafone invests in former British colonies such as Nigeria and Kenya, Orange (France Telecom) focuses on the French-speaking countries, including Senegal and the Democratic Republic of Congo, whereas Portugal Telecom (PT) has incentives to invest in Angola and Guinea-Bissau.

‘Yet, this is not all: MNOs enter Sub-Saharan Africa’s country markets also from other emerging markets, such as India and the United Arab Emirates. This is an interesting new phenomenon. Besides, there are strong African players, such as GLO Mobile from Nigeria and MTN from South Africa, which have expanded across national borders in the region,’ Dike says.

Concerning the competitive interaction, Dike found that while some of the firms enter the same markets as their competitors, some also tend to avoid entering markets already occupied by their rivals.

The public defense of Dike’s doctoral dissertation, titled “Cross-border Expansion and Competitive Interactions of Mobile Network Operators in Sub-Saharan Africa” will take place on 25 May 2018 at the Aalto University School of Business.

Doctoral Dissertation (aaltodoc.aalto.fi)

Further information
Marcellinus Dike
[email protected]
tel. +358 50 911 2872

 

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