AFRICA is the second largest continent in the world, with a population of more than one billion people. The social and economic impact that telecommunications have had on Africa over the past decade are astounding. The sector has bought billions of dollars from international investors.
BY PATSON CHAPEYAMA
Africa’s communications marketplace has now passed the tipping point from high potential to high growth. Unburdened by a legacy of installed telecoms infrastructure, Africa has leapfrogged the fixed-line phase of development to mass-market mobile networks and services.
Even as Africa’s total mobile subscriptions soar past 500 million. There is a huge, untapped market which is still up for grabs by a wide range of local, regional and global players. In addition to being one of the world’s most dynamic telecoms markets, markets for mobile-enabled applications in areas like payments, commerce, health and education are vast. Major players in this sector include telecom groups as France Telecom, Vodafone, MTN, Bharti Airtel, Econet Wireless and Millicom amongst others.
Growth driven by mobile market
The African mobile market is increasing at an alarming rate, mobile retail connectivity revenues are expected to rise to $71,33 billion in 2020. Mobile voice revenues will decline slightly over the forecast period, but mobile data revenues will grow at a Compound Annual Growth Rate of 18,2% between 2018 and 2020, reaching $25,83 billion in 2020.
Data revenue will account for 36,2% of mobile retail connectivity revenue in 2020, up from 17,1% in 2018. The South African mobile market is nearing saturation, with mobile penetration approaching 110%. The number of subscribers or active SIM cards reached 52,2 million at the end of 2016, representing a mobile penetration of 107,2%. Fixed-line connections continued to stagnate, at 4,3 million during the same period. According to All Media Products Survey statistics, 76% of South Africans over the age of 15 personally owned, rented or had use of a cell phone in 2010. Nigeria Mobile market is growing at more than 100% per year.
Rapid growth in mobile payments
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Mobile payments are radically changing the shape of personal and business banking in Africa. With a number of success stories already established, mobile operators and banks are seeking to replicate these in other countries where the gap between banking and mobile penetration levels provides vast potential for further expansion.
Africa’s population of unbanked people is in urgent need of access to vital financial services, and operators are ideally placed to service this need. African consumers’ strong appetite for mobile payment and retailing services was highlighted in a recent study by the mobile ad network InMobi. It found that 59% of South African users have now purchased at least one digital product through their mobile device.
The study found that more mobile Internet users in Africa prefer to shop for clothes, electronics and entertainment products, like tickets and music, from their mobile devices (46%) than from their desktop computers (10%) or even in a store (44%).
Mobile payments using a mobile device to make payments electronically are radically changing the shape of personal and business banking in Africa. The results of a 2012 PwC survey highlighted mobile payments as an accelerating trend, and already a number of success stories have been established, notably in Kenya.
Mobile operators and banks are now trying to replicate those successes in other countries where the gap between banking and mobile penetration levels means much potential for expanding.
The rise of Broadband penetration
According to Ovum’s Broadband Development Index (BDI), which measures the level of adoption of fast broadband services, Africa is the second-lowest-ranked region in the world in terms of its overall combined fixed and mobile broadband development, with a BDI score of 236 out of 1 000.
Mauritius is the highest-ranked country in Africa in the BDI for 2016, with a score of 279 out of 1 000. In 2015, Mauritius is in 94th place among the 191 countries around the world ranked by the BDI. In Africa, Mauritius is followed in the BDI rankings for 2016 by South Africa, Tunisia, Namibia, and Kenya.
The take-up of mobile broadband services which are principally composed of 3G W-CDMA and 4G LTE will grow strongly in Africa over the coming few years, driven by the continuing rollout of mobile broadband networks, the availability of increasingly affordable smartphones and other data devices, operator strategy to encourage data use, and changing customer behaviour.
The number of fixed broadband connections in Africa is expected is expected to increase significantly in the coming year and expected to reach 19,97 million at the end of 2021.
Digital service developments
Digital service is a general term for services other than voice and data connectivity, such as e-commerce, digital media and machine-to-machine. Most major African operators have deployed music streaming services as part of their plans to encourage the use of mobile data. Millicom has launched its Tigo Music service in Ghana and Tanzania.
The MTN Music Plus service, along with other lifestyle services, has made a significant contribution to the growth of digital revenues at MTN Nigeria, according to MTN Group. Social media platforms are advancing media platforms for example live streaming and television platforms on Facebook.
Patson Chapeyama is a young cutting edge writer and business growth-preneur. He is the author of best selling success books and columnist in international news platforms. He is also an editor for a number of local magazines. He can be reached on +263733551626/ [email protected].
