Africa is a voice-driven mobile market and is increasingly saturated, BMI-TechKnowledge analyst Dobek Pater said at the Tel.Com Africa 2002 conference in Johannesburg yesterday. However, operators disagree with this view.
Robert Pasley, Vodacom`s director of strategy, says Vodacom predicts the local market for mobile services will penetrate as high as 19% by 2008, and predicts that enhanced data services and improvements in core voice services will drive this growth in the coming five years. Current usage sits at 13 million.
Georges Bongi, MTN`s group executive for marketing, puts the saturation point a little lower at about 15.5 million within the next two years. Bongi argues that the convergence between the mobile communications industry and the computer industry will drive this growth.
He says mobile operators will increasingly become solutions vendors rather than mobile operators as the market moves towards applications rather than simple connection devices. "The fantastic uptake of mobile business services we are experiencing is because people are ready to improve their productivity through these new services."
Norman Ober, Cell C`s head of corporate office group, says the market will peak in the next couple of years and puts the saturation level closer to Vodacom`s prediction than MTN`s. He says the major challenge to operators will be to deliver services that subscribers will use.
Ober says Cell C faces particular challenges in the local market as the result of being the newest entrant. Competition over site licences and access to the 1 800MHz band are of particular concern to the company, which is finding it difficult to deliver the services it planned because of lack of access.
Pasley points out that the market is extremely competitive and "competition is so fierce at the lowest level of the market that I question whether the operators can in fact earn back the costs of acquisition".
All three operators agree that driving up average revenue per user is crucial to future growth.
Bongi says one of the major challenges to the operators on the technology side is to innovate at the right speed. As an example, he points to SMS usage, which took between three to four years to take off. Pasley echoes this, saying that while "SMS has crept up on SA by stealth", it is now a significant feature of local service provision. "These services may take a while to take off but when they do, they do significantly."
According to Pater, data accounts for about 3% of revenue for the operators and this should increase to 12% in the next few years. GPRS take-up, he says, will be slow for quite a while still, at least until the price starts to come down.
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