Cellphone sales and subscriber growth in South and West Africa will continue to bolster worldwide mobile connectivity, according to research firms Gartner and BMI-TechKnowledge.
According to Gartner`s latest report, worldwide mobile phone sales totalled 816.6 million units in 2005, a 21% increase from 2004, as the leading six vendors increased their share of the market to the detriment of smaller vendors.
"The industry experienced record sales due to continued strong growth in emerging markets, where falling prices for cellular connectivity (phones and subscriptions) resulted in higher-than-expected sales," says Carolina Milanesi, Gartner principal mobile terminals research analyst.
"In more mature markets, such as Western Europe and North America, replacement sales were driven by users who gave in to the charm of highly fashionable devices."
Basic services
According to Gartner, the Europe, Middle East, and Africa region saw a huge rise in mobile phone sales with many first time subscribers joining the market, especially in Africa.
Mobile subscriber growth rates in Africa are still coming off a low base and basic connectivity services are still the main driver for customers, notes Richard Hurst, analyst at local research firm BMI-TechKnowledge.
"People, especially in rural areas, want to say 'hello`, they want basic voice services," he says.
Low-cost handset products, such as those recently introduced by Motorola, are a good idea as they cater for this introductory market, says Hurst.
"In SA we have elements of both first and third world markets. The first world element is when people desire to have more sophisticated devices that are linked with aspirations. Third world elements include the need for basic connectivity, usually through prepaid contracts. However, this latter group will eventually become high-end users," he says.
BMI-TechKnowledge expects SA`s mobile subscriber base to grow to about 31 million connections in 2009 from the current estimate of 25 million. West Africa`s subscriber base should hit 31 million in 2009 from this year`s 23 million. Nigeria will account for 13 million and 18 million of that market in the respective years.
The problem with estimating the subscriber base is the "double counting" due to subscribers having more than one account with different network operators, says Hurst.
A potential fly in the ointment for South African mobile phone sales could be the move by the regulator, the Independent Communications Authority of SA, to shorten postpaid contract periods to less than 24 months and that would impact on the subsidy of mobile phones, he says.
"I don`t think it will have a real impact, because the network operators will build the cost of the phones into the shorter contract periods. However, it may spur some further package innovation," Hurst says.
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