At the onset of 2009, we submit to tradition and examine a number of key questions African telecoms investors will face in the New Year. All major questions for 2009 are underpinned by one common thread: cash. The ability to raise, generate and preserve cash will be arguably the most important determinant of what survives, what struggles and what disappears. We see the key questions as follows:

1.       Can mobile networks withstand the surge in data traffic?

2.       Is the African wholesale business really this great – can all the capacity projects survive?

3.       Will African mobile remain a great fundamentals business?

4.       Can African mobile valuations survive the economic downturn?

5.       Will the market see more consolidation?

A summary of our 2009 outlook: mobile networks will struggle with data traffic but hold steady, African submarine cable projects surely can’t all survive; the fundamentals of mobile are still great but increasingly brutal at the edges; valuations are high and surely can’t keep this up, and we believe the best value-creating acquisitions will be horizontal.

Download full Research Note: Download 010609RN 2009 Outlook