Madagascar underwent a prolonged economic crisis and political turmoil that caused the shrinking of the telecoms sector, with smaller spending and intense competition between the three GSM mobile network operators. Recent improvements in the overall state of the economy in Madagascar are generating more consumer confidence and growth in both the mobile and broadband markets in the last few years as customers adopt services based on LTE technology.
The Internet penetration rate was only 5% in 2016. national fibre backbone is being implemented connecting the major cities. Wireless broadband access networks are being rolled out, enabling converged voice, data and entertainment services. DSL2+ broadband services have been introduced and the decline in fixed-line revenue has been successfully reversed.
A national fibre backbone is being implemented connecting the major cities. Wireless broadband access networks are being rolled out, enabling converged voice, data and entertainment services. The launch of third generation (3G) mobile broadband services has enabled the mobile operators to reverse their rapidly declining average revenue per user (ARPU).
The fixed-line sector has been undergoing a revolution following the privatisation of Telma. Major investments have been made and the number of fixed lines has grown steadily, albeit from a very low base. ADSL2+ broadband services have been introduced and the decline in fixed-line revenue has been successfully reversed.
Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing roughly 80% of the population. Deforestation and erosion, aggravated by the use of firewood as the primary source of fuel, are serious concerns.
After discarding socialist economic policies in the mid-1990s, Madagascar followed a World Bank- and IMF-led policy of privatization and liberalization until the onset of a political crisis, which lasted from 2009 to 2013. The free market strategy had placed the country on a slow and steady growth path from an extremely low starting point. Exports of apparel boomed after gaining duty-free access to the US in 2000; however, Madagascar’s failure to comply with the requirements of the African Growth and Opportunity Act (AGOA) led to the termination of the country’s duty-free access in January 2010, a sharp fall in textile production, and a loss of more than 100,000 jobs.
Madagascar regained AGOA access in January 2015 following the democratic election of a new president the previous year. In November 2015, the International Monetary Fund (IMF) approved a Rapid Credit Facility to Madagascar worth about $42.1 million to help the government meet its balance of payments needs. The IMF also approved a staff monitoring program to guide policy implementation and indicated that Madagascar must demonstrate the capability to sustain reforms to qualify for future requests for a credit facility.
Telecom Malagasy, also known as TELMA, Telma Global Net and TGN, is the main telecom operator in Madagascar. The company was privatised in 2004. The company had annual sales of $134 million in 2011, the latest data available, and has invested $230 million since 2004 to build infrastructure such as 8,100 miles of fiber optic cables. In 2016 Groupe Axian, currently the majority shareholder in Telma, committed to a large investment over several years to improve the network infrastructure on the island, particularly fibre cable.