February 2, 2018
The development of mobile growth in Africa is garnishing and within the plume ranging between two extremes. Will the industry find a balance in this dynamic continent?
Africa is one of the world’s biggest cultural puzzles, a shiny gem of flora and fauna fascinating millions around the world with its vibrant legacy and unique identity, as well as a continent of flourishing opportunities and impressive economic growth over the last few years. According to the GSMA, more than half a billion people are subscribed to mobile services, comprising around 46% of the continent’s total population. These figures crown Africa as the second largest, yet least established mobile market in the world with all forecasts predicting a steady increase.
The scenarios for mobile growth are many and stretch from one extreme to another: will the already established giants remain on top, or will newbies fluctuate the balance of this dynamic continent?
With the current state of technological dependency, it is only natural to expect elevated data consumption and Africa’s total bandwidth usage has grown so rapidly, that it has been so far only surpassed by the Middle East. Affordable mobile devices and tariffs have so far pushed 3G/4G connections to make up over a quarter of all mobile connections, coming from more than 226 million smartphones.
While over a hundred MNOs compete for the wallets of millions of Africans, the biggest on the block remain Vodafone, Telefonica, Airtel, Orange, Beeline, MTN Group, Etisalat and Ooredoo.
Said Debbie Wilkins, UROS’ General Manager, about the data rates in Africa, “Local operators are trying to look for solutions and respond to growing need for affordable accessible data. However, many offerings are yet still available only to major corporate & large enterprise customers. Some operators with large African network footprint are already offering better rates to all their subscribers in larger geographical scope. With the increasing demand for data, subscribers are demanding and pushing the MNOs to drop the data pricing. Not only does the challenge exist within Africa and within “local subscribers” but also the challenge is real and growing in case of inbound and outbound roaming. Africa’s data rates are still amongst the highest in the world. Data consumption is definitely growing rapidly in Africa, with Smartphone sales increasing, data revenue is far greater than voice revenue in certain African countries.”
Nigeria and Sudan provide the fastest subscriber growth, whereas Egypt and South Africa present a challenge due to mature state of the market. Mobile subscriber growth is solidifying and will eventually saturate the urban nests even in the least penetrated zones, especially if rural coverage remains minimal. Those are costly investments which could, of course, provide a significant competitive advantage. Due to the lower income levels in those areas, these incremental subscribers might spend a lot less than early adopters and urban dwellers. Facts like these are backed by optimistic news of future developments.
Smartphone use has doubled over the last two years and it’s growing steadily:
COMESA (Countries in the common market for Eastern and Southern Africa), a 19-member bloc, is currently preparing to significantly decrease the price of roaming in member countries in order to alleviate the burden of inflated prices, which bite a huge chunk of lower incomes, promote competition and access to high quality calls and internet services. Like any great collaboration, this one also has a major hurdle to overcome. Many African countries still lack proper digital infrastructure, despite the ultra-high internet speed in countries like Kenya, which easily surpass those in developed countries.
“Bill shock is still an ongoing struggle for the networks,” said Debbie Wilkins, “although not as great as it used to be 10 years back. Local operators have recognized the problem and are looking for solutions to combat the massive bill shock that is being experienced among their subscribers.”
Silent roaming is still present, as is the tendency to purchase a local SIM card once entering a country, thus evading soaring roaming bills. And whenever roaming is present - is data roaming becoming prevalent or do most people just rely on voice? “Mostly still voice and SMS for the leisure traveler, little to marginal increase on data,” said Wilkins, “The leisure traveler will generally turn off their data when leaving their country and rely on connectivity with free Wi-Fi hotspots. In corporate data usage is more has doubled over the last few years. There is a huge revenue potential in silent roamers.”
Wi-Fi also plays a prevalent role in the daily lives of Africans, despite its slower development compared to international counterparts, and it has expanded beyond airports and businesses. Uganda has become Google’s landscape for Project Link’s initiative to build metro fibre and Wi-Fi networks in developing countries, providing a sturdy base for mobile operators to improve and expand in heavily populated areas.
And while the Internet of Things is still a bit out of reach, knowledge of the technology lies in the hands of the people - all thanks to the Internet. Educational organisations and universities around the continent develop seminars and workshops to prepare the students and other interested parties for this new era of total connectivity.
The digital world has long ago started spinning its web on African territory with varying degrees of stability, but at its core, it’s starting to strengthen and pulse with impatience. MNOs have long dispatched to developing countries to hone their skills away from impersonal online interactions and stable digital infrastructures to cooperate with a population of lower incomes and technological mistrust that comes with threading the waters of the unknown.
New technologies are emerging in the mobile industry globally. eSIM especially is something that is rocking the boat, with predictions it will eventually abolish international roaming altogether. It remains to be seen whether these new technologies will be the answer, and bring seamless mobile connectivity to Africa curing the issue of bill shock. From an overall industry perspective, the big picture still appears to be in flux, especially when the issue of global mobility is brought in.
Whether the issue at hand is connections between people or devices, it presents challenges as the expectations of the availability of connectivity are growing and geographical boundaries can no longer mean boundaries to connectivity. Everyone and everything is assumed to be constantly connected. True global connectivity requires co-operations and strategic partnering across many different industry categories. So in the end, what determines your success isn’t necessarily whether you’re a giant or a newbie, but rather your vision and capabilities to execute it.
UROS is always digging deep into the specific markets we serve. For more insights into what we deliver for MNOs worldwide, please contact us or visit our website at uros.com.