Policy Brief 6, 2016
Vietnamese backed Motivel has shaken up the Mozambican mobile market with its high investment, low user cost business model — creating the largest 2G/3G network in the country and winning 37% of subscriber-based market share in its first three years of operation. Incumbents, Vodacom and mCel, have resultantly faced increased competition; prices for data and voice have fallen; and mCel has struggled to maintain market share. The Mozambican mobile market is now more dynamic than ever before.
Highlights:
1. Movitel’s impact has led to substantial pricing pressure in the retail voice and data markets. mCel has reacted by undercutting Movitel’s low prices. Vodacom has matched Movitel’s low data prices but charges the highest voice prices.
2. Competitive pricing has expanded the overall market but mCel has consistently lost market share while Vodacom and Movitel continuously grow. Mobile bundled offerings with shorter data expiration times than voice are being offered by Movitel and mCel with up to 200% additional onnet minutes in an attempt to stimulate voice use.
3. While Movitel has the largest market share by number of SIM cards, it has the smallest revenue, lowest minutes of use and lowest ARPUs. It remains a vulnerable new entrant requiring regulatory sensitivity.
