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The Malagasy telecoms market will have the freedom to grow in line with regional trends as the long-delayed October 2005 Telecommunications Law is finally implemented. Market liberalisation, increased competition and a new regulatory body will be key to unlocking Madagascar's potential and increasing its appeal to investors.
•Mobile penetration in Madagascar remained below 40% at the end of 2013 following a market correction during the year.
•Our five-year forecast expects broadband penetration to remain below 1% by 2018, partly due to the high-cost of PCs and the overreliance on data-enabled handsets for internet access.
•Although we forecast positive growth in the fixed-line sector during our forecast period, we expect the effects of mobile substitution to become more pronounced over the medium term as wireless network coverage expands and mobile voice and data tariffs decline.
Key Trends And Developments
In October 2014, the government of Madagascar announced plans to reform the telecoms sector, replacing the regulator OMERT with the Agency for Regulation of Technology and Telecommunication (ARTEC). Implementation of Law No. 2005-023 will see operators pay EUR5mn to renew licences, over eight times the price under previous regulations. New entrants to the market will be expected to pay EUR40mn for a new licence. However, operators will be allowed to offer 4G services, as the government is keen to encourage new technology development.
A focus on the environment under the new law also means that network infrastructure sharing will be a requirement to reduce the impact on local areas. It will reduce costs, which BMI believes will appeal to the three mobile operators Airtel, TELMA and Orange, particularly with relation to rolling out next generation networks and extending coverage to underserved areas.