Mobile growth driven by affordability

By Rodney Weidemann for Nokia Networks

Johannesburg, 26 Oct 2004

Africa`s mobile market is expected to almost treble in size, from around 54 million subscribers in 2003 to about 147 million by 2007, according to Nokia Networks.

Neil Cary, the company`s area head for South and Central Africa, says there are around 1.6 billion mobile subscribers worldwide and that this should grow to about 2 billion by 2007.

"We can only achieve this type of growth through the developing world, as there is not enough room for that kind of growth in places like Europe and the US," he says.

"A key driver for growth is affordability, so in order to grow the market we need to ensure that acquisition costs are kept low through options such as subsidised handsets."

He says the company is also looking at new distribution solutions to drive growth and lower subscriber acquisition costs.

"For example, something like an electronic prepaid refill which does away with the old scratch-card method of topping up reduces costs and dealer commissions, and also allows subscribers to top up with a much lower amount than the fixed rates on such cards," says Cary.

"An option such as this allows really small prepaid amounts to be loaded, meaning that people who could possibly not afford a $5 scratch-card can afford to load $0.50 airtime, thus growing the market further."

Cary says a lot of exciting stuff is around the corner, in terms of offerings like the provision of content to person, person-to-person and business services.

"SMS was just the beginning, and ideas such as WAP may not have worked as well as originally envisioned, but it has demonstrated what can be achieved and what a powerful tool such a service can be."

However, he believes the key factor in developing similar services in the future lies in ensuring interoperability between operators, as it is only through this that such services will become viable and thus, profitable.

"Another critical factor in driving growth is the development of standards. We cannot have another Betamax versus VHS situation, as it would be disastrous for these services to fail purely because of a lack of standards."