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Sub Saharan African Communications Quantitative Quarterly Tracker
Frost & Sullivan, July 2011
This study presents key subscriber data forecasts for telecommunication markets in South Africa, Mozambique, Tanzania, Congo (Democratic Republic), Lesotho, Nigeria and Uganda. The data is presented for the years 2008 to 2015. The number of mobile subscribers is likely to increase across all the markets. This is also reflected in the overall number of internet users. The data provided includes mobile subscribers, fixed subscribers, internet subscribers, narrowband as well as broadband subscribers with respective subscriber penetration levels. The penetration levels of telecommunication metrics are based on population sizes, which are also presented for each forecast year. Gross domestic product values for each country is also presented.
Market Overview
Growth of Mobile Voice and Internet to be Contingent on Declining Prices
Significantly low penetration levels of broadband in Africa – a majority of countries have penetration levels lower than 5 per cent – is being accompanied by proportionally low Internet usage levels. On the other hand, African countries have experienced a steady uptake of mobile communications. Promisingly, Frost & Sullivan forecasts considerable growth in mobile, broadband and Internet services in Africa during 2010-2015. “The growth of mobile voice and internet markets in Africa is expected to be driven primarily by a decline in retail price for these services,” notes the analyst of this research. “Operators in the region are investing heavily in mobile infrastructure, including base stations and transmission networks, with the aim of making available higher network capacity at lower cost.”
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 to minimise the overall cost of delivering services to end users. “Cost minimisation is likely to translate to lower retail prices of voice and Internet services,” explains the analyst. “This will drive the demand and uptake of such services.”
Multiple Strategies Required to Combat Low Disposable Incomes of the Majority
The most prominent challenge to the 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. Consequently, operators in the region are likely to experience significantly low levels of new subscription to voice and Internet services in the short term. “Operators in Africa are likely to experience challenges in penetrating a market that is largely dominated by consumers with lower living standards,” explains the analyst. “This is likely to limit the growth of Internet services markets in the short term.”
The experiences in the uptake of mobile telephony services in African countries such as Kenya that have 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 boost penetration levels. Offering an extensive range of Internet access packages would help meet 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,” advises the analyst. “Growth of voice and Internet markets is likely to be supported by the availability of low cost smartphones.”
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