Africa - Mobile data services on the rise
Mobile phones represent around 90% of all telephone lines in Africa. The continent’s mobile market has been growing consistently at around 50 to 60% every year. Enormous further potential remains, with market penetration standing at only around 30%. However, in some of the leading markets the growth curve has started to flatten.
A steady decline in tariffs and the introduction of prepaid services has meant that almost 30% of Africa’s close to one billion people can now afford a mobile phone. However, as lower and lower income groups are being targeted, the declining ARPU is putting pressure on the network operators’ profit margins. Despite this, international investors are still paying record prices for new mobile licences or shares in existing mobile operations in Africa, which shows the huge potential that is still seen in this market.
There are now more than a quarter of a billion mobile subscribers in Africa, and revenues have passed the $20 billion barrier with profits estimated at around $2 billion. Governments have collected close to $10 billion in operator licence fees since 2000. Newly introduced converged licensing regimes have increased the competitive pressure in a number of key markets but also allow the mobile operators to branch out into new service segments.
Although the greatest demand is in the capital cities, cellular solutions are also being employed to increase accessibility in rural and other disadvantaged areas.
The Ultra Low-Cost Handset program forms a major part of the GSMA Emerging Markets Initiative and is expected to help accelerate market growth even further by reaching lower-income customer groups with $30 handsets.
Due to the continent’s poor fixed-line infrastructure, the mobile networks are beginning to play an increasing role in Internet service provision as well, following the launch of 3G services in a number of markets – a welcome new revenue stream in an environment of low ARPU levels.
The development and introduction of mobile data services and content is expected to speed up in the coming years as subscriber growth peaks and operators seek alternative ways to grow their revenues. As the market becomes more educated, new value-added products are being more widely adopted.
As elsewhere in the world, SMS still accounts for the bulk of Africa’s mobile data traffic, but since 2003 there has been an emerging interest in third party services such as the downloading of ring tones and logos, as well as MMS.
In South Africa, mobile data revenue (including SMS) now accounts for close to 10% of total mobile revenues.
IIR’s Mobile Banking & Financial Services Africa event is designed to highlight the potential business models and revenue opportunities that are available to mobile operators and financial institutions seeking to profit from the use of the mobile device as a channel to support payment, banking and financial services.
For more information on IIR’s Mobile Banking & Financial Services Africa event – see http://www.iir-events.com/IIR-conf/Telecoms/EventView.aspx?EventID=1667
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