Mobile and fixed telephony subscriber numbers in the majority of sub-Saharan Africa are expected to grow exponentially by 2015.
This is according to the Frost & Sullivan Sub-Saharan African Communications Quantitative Quarterly Tracker, covering the communications markets of SA, Mozambique, Tanzania, Democratic Republic of Congo, Lesotho, Nigeria and Uganda.
While the majority of countries have penetration levels lower than 5%, says Frost & Sullivan, African countries have experienced a steady uptake of mobile communications.
The market research firm says these countries had 181.7 million mobile and fixed telephony subscribers and 29.8 million Internet subscribers in 2010, and estimates this to reach 266.1 million and 77.5 million, respectively, in 2015.
Vitalis Ozianyi, Frost & Sullivan's information and communication technologies industry analyst, says the growth of mobile voice and Internet markets in Africa is expected to be driven primarily by a decline in retail prices for these services.
“Operators in the region are investing heavily in mobile infrastructure, including base stations and transmission networks, with the aim of making higher network capacity available at a lower cost,” he states.
The analysis points out that operators are at the forefront of spurring market growth by passing savings in network costs to the end-users of services.
“They are investing in shared terrestrial fibre-optic infrastructure, to increase transmission capacities and connect end-users to undersea cables. They are also adopting infrastructure-sharing at base stations in order to minimise the overall cost of delivering services to end-users,” says a statement from Frost & Sullivan.
Ozianyi explains: “Cost minimisation is likely to translate to lower retail prices of voice and Internet services. This will drive the demand and uptake of such services.”
However, according to the firm, the most prominent challenge concerning growth of voice and Internet markets in Africa is the low disposable income of a majority of consumers. The cost of devices required for uptake of Internet services is generally perceived to be high, it adds.
“Operators in Africa are likely to experience challenges in penetrating a market that is largely dominated by consumers with lower living standards,” states Ozianyi. “This is likely to limit the growth of Internet services markets in the short term.”
He also says the trends in the uptake of mobile telephony services in African countries, such as in Kenya, which has experienced significant penetration levels, should provide a template for success.
Engaging governments to offer tax subsidies on mobile phones, laptops and smartphones that are required to access Internet services could also boost penetration levels, he notes, adding that offering an extensive range of Internet access packages would assist in meeting the budget capabilities of a wider base of consumers.
“African operators are likely to analyse models utilised in developing markets in the region to facilitate wider uptake of mobile voice and Internet services,” Ozianyi notes. “Growth of [the] voice and Internet markets is likely to be supported by the availability of low-cost smartphones.”
Share