A colossal disparity exists between fixed and mobile communication penetration rates across Africa, with mobile communications capturing 96.4% of the subscriber market share in 2013, compared to a mere 3.6% by fixed communications.
This is according to telecoms research firm Frost & Sullivan, which attributes the massive gap to the fact that fixed-line communication services are offered solely by state-owned entities across African countries, with limited funds for infrastructure development and investment.
In addition, says the company, a lack of competition within the fixed-line market has resulted in little motivation to improve services. "Customers, therefore, choose to communicate through mobile devices rather than fixed-line modes." Locally, according to Telkom and Neotel's latest figures, there are about 3.8 million fixed-lines in total in SA, which includes consumers and businesses.
Sector saturation
Frost & Sullivan ICT analyst Naila Govan Vassen says mobile penetration is almost saturated in some parts of Africa and mobile network operators are looking for new streams of revenue such as data services.
"In particular, the North African region is on the verge of saturation, with an average mobile penetration rate of 93.4%. South Africa, Namibia, Ghana, Mali and Gabon are also in a similar situation, with a 100%-plus mobile penetration rates."
In most cases, markets approaching mobile saturation point are in this position due to the widespread ownership of double SIM cards, says Frost & Sullivan. "High numbers for business-related visitors and tourists has also led to the purchase of SIM cards for short-term use, contributing to mobile saturation in some markets."
The firm notes that, by the end of 2013, the Seychelles registered a mobile penetration rate of nearly 200% (195.5%) - due to its touristic appeal.
Communication commodity
While robust mobile penetration rates have fuelled the growth of the telecoms market in Africa, other factors have served to hamper market development.
Frost & Sullivan says both fixed and mobile operators will have to invest huge amounts to develop telecoms infrastructure across Africa, largely due to scattered and low population densities.
"Social, economic and political instability as well as governments' prioritisation of issues such as poverty, low levels of education, and poor access to healthcare over telecoms, also slow down development. The market is also consolidating as operators struggle to overcome strict regulations and intense competition within the overall telecoms market."
Vassen says urban dwellers will now become a minority target for telecoms providers, as most have been exposed to technological and communication developments. "To gain market share in the rural areas, participants will have to make communication a commodity."
With the growing popularity of mobile communications, opportunities to create e-government, e-education and e-health platforms have also emerged.
"Already, small and medium enterprises are taking advantage of the proliferation of communication technologies and integrating it in sectors that are crucial for the development of countries across Africa. Such initiatives have given rise to mobile agriculture and mobile banking," says Frost & Sullivan.
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