As African markets open up to private-sector involvement and competition, the opportunities for investors can arguably offset the risks involved. A perfect case in point is the growth of the mobile data market in Africa, according to Paul McKibbin, the managing director of Carrier Solutions, a division of Siemens Telecommunications.
"Although high revenue generators of mobile data services in Africa are currently aimed at top-end and advanced business users, the uptake is nevertheless substantial. Since information based services and business services such as remote dial-in are currently lacking in the mass African market, this uptake of the niche user sector is significant when compared to the number of cellular subscribers in these markets. As far as feasibility goes, in Africa there is a two-phased approach, phase one targeting the high-end user with access to WAP enabled phones and phase two being mass market penetration."
Late adopter bridges digital divide
McKibbin said an increasingly deregulated market in Africa enhances competition, which in turn accentuates the need to differentiate the market, with pricing and services oriented strategies.
"Deregulation will spur the growth of innovative strategies in the mobile market opening new business opportunities. There will be a greater uptake of WAP services as a result of the increased speed for data throughput, making the usage of the applications faster and easier. Africa's late adoption of information technology now has the potential to bridge the digital divide, leapfrogging interim phases and heading straight for the provision of advanced data services.
In Africa, adds McKibbin, new networks are being rolled out that will allow for Mobile Data services. For example, WAP services can be implemented more quickly and cost effectively, making it possible for cellular operators and ISPs (Internet Service Providers) to tailor data services to the market needs.
"SMS (Short Message Service) also continues to be a major growth area, in both SA and Africa, as it is easily accessible to any cellphone user and can be used in conjunction with WAP and email. McKibbin says the first phase of adoption of mobile data in Africa lies in providing data connectivity that will allow users basic services such as email.
"But while there is a significant percentage growth of mobile and Internet users in Africa, in absolute figures these do not compare to the almost eight million cellular users in South Africa," McKibbin points out.
"This said, many African country's are now poised to launch data services which could exceed the SA market, due to the liberalisation of their markets. In both Nigeria and Tanzania, privatisation of their telecommunications industries has proven that deregulation creates higher penetration and usage of communications technology for advanced services. This, in turn, creates more job opportunities within the industry."
"Whereas SA's policy regarding deregulation is unclear, both Tanzania and Nigeria are putting in place a framework that is most conducive to reducing the digital divide within their own countries. There's little doubt that SA should be the telecoms and IT hub for sub-Saharan Africa but, at present, we are not moving fast enough from a regulatory and operator point of view. In contrast, Tanzania and Nigeria are running ahead, relative to their local context."
McKibbin continues: "As lack of traditional services and poor service levels in African countries create market demand for information-based services, such as travel or rate of exchange services, high-end business users are stimulating the deployment of additional mobile data services, over and above email." He cites an example: "In the Congo the deployment of WAP based services last year was enormously successful, largely because of the general lack of Internet access in the country and the fact that many high-end users had access to WAP handsets. Because the information, generated through mobile access to the Internet, directly met users needs, the mobile service proved to be far more successful than originally anticipated."
The Singapore of Africa
Mauritius is another country poised for the successful uptake of WAP and mobile data services, says McKibbin.
"The recently elected government's progressive thinking for a free trade area, focusing on the IT and telecoms sector, is one of the main reasons for Mauritius being earmarked as the hotbed of economic activity and regeneration. Already, the mobile operator Cellplus, a wholly owned subsidiary of Mauritius Telecom, has awarded Siemens Telecommunications a turnkey contract to design and implement a full WAP enabled solution. This WAP infrastructure is the starting point for other data applications to evolve, for example the booking of essential and other services - trains, buses, movie tickets or finding places of interest such as hotels, restaurants and shopping centers."
"Although smaller than South Africa, the country boasts a 25,1 % fixed line penetration (considered very high by African standards) and a 8.04% mobile penetration. Mauritius is similar to SA in terms of its demographics, with both high-end users and middle-to-lower end users. This, in addition to the high number of holidaymakers, business travellers and visitors to Mauritius, makes it an ideal market for early WAP growth," says McKibbin. With plans also to roll out a GPRS network this year, Mauritius, he says, is aiming to become the 'Singapore of Africa.'
In Africa for Africa
Siemens Telecommunications is strongly committed to its presence in Africa and shares President Thabo Mbeki's vision of creating an African Renaissance. The company is firmly supported by its principle shareholder, Siemens AG of Germany, to create further progress and prosperity through its global network of innovation, for local solutions.
Siemens is not only positioning itself as a key telecomms infrastructure supplier, but is delivering a full spectrum service (turnkey projects, integrated solutions, value-added services). Focused on customers' needs and requirements it are able to deliver customised solutions allowing operators to offer a host of commercially viable services to their subscribers.
Summing up McKibbin says: "As the need for services extend beyond traditional voice and access provision, we are seeing increased competition in value added service delivery in the mobile data services market. Value-added applications can provide necessary solutions such as billing payments, unified messaging, personal information or tools (mobile calendars and directories), travel and exchange rates services. Siemens remains committed 'In Africa. For Africa.'
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