Voice still represents the majority of revenues by a large margin.
A number of countries are seeing an acceleration of voice ARPU decline through competition• Voice still represents the majority of revenues for operators. In the case of this Telecommunication key markets, voice represented over 80% of revenue in 20111• ARPUs have been declining as a natural result of lower price levels, lower income segments being penetrated and customers spreading usage across multiple SIMs to maximise value from various mobile tariffs• In some countries, competition has heightened price pressure, resulting in faster declines, such as in Kenya in 2008-09, in Ghana in 2010, or more recently in Nigeria (1H 2012). In such cases traffic does not compensate for lower revenue per minute, i.e.
volume-price elasticity is lower than 1• The acquisition of Zain by Bharti (2010) triggered several such cases across Africa and resulted in a number of price wars during 2011Regulation also puts pressure on average revenue per minute• Special taxation on telecoms services has increased in some cases (e.g. Tanzania) or is being put in place (e.g.
Egypt)• Mandated declines in mobile termination rates have become steeperWhilst ARPU is pressurised, voice traffic levels continue to increase, pressuring the networks and calling for capacity investments• Aggressive discount policies and lower prices have led to significantly higher traffic levels through volume-price elasticity• Operators have been challenged to maintain minimum service levels and number of them, such as in Ghana, Nigeria or Kenya have breached acceptable congestion levels, sometimes leading to being temporarily barred from selling new SIMs
