Sunday, December 2, 2012

African Telecommunication Market- Key Insights

                                        

Besides digital media, telecommunication is one of the sectors that have always excited me. Partly it is due to the close relationship it has with the digital media and partly because I have been offered some research assignment on telecom sector in the recent past. Based on my readings I have been doing recently, I have tried to build a small snapshot of the emerging telecom landscape in African continent. Most of the readings are derived from Com World Series blogs.



Mobile penetration in Sub Saharan Africa will reach 54% by the end of 2012, up from 28% in 2007.

Africa is the fastest growing mobile market in the world. By 2015 the overall investment in the telecommunication sector is expected to reach USD 1.5 billion.

African telecom market is considered to be a very high competition intensive market.

96 % of Africans are on prepaid traffic.

Often mobile is the sole mean of communication.

SMS is very popular. Integration of SMS and OTT can offer a great area for exploration.


Fraud and error result in 15% of revenue loss in Africa. In contrast it is just 1% and 2.8 % in Europe and North America respectively.

Revenue per customer is low.

The Inter Operator Rate (IOT) is very high in Africa. It eventually results in high international roaming rates in the sub continent.


In African context, music is one of the very important contents.

The overall smart phone penetration in Africa stands at 15 percent, half of the global average of 30 percent. However it is picking up in many low per capita income countries as well. Also many of the countries have started exploring LTE (4G). This includes Egypt, Libya, Kenya, Nigeria, Namibia and South Africa. It is expected that by 2015, the overall LTE subscription will be around 11.15 million in Africa


Technology and telecommunication services in businesses and SME are considered to be high growth segment.


The overall smart phone penetration in Africa stands at 15 percent, half of the global average of 30 percent. However it is picking up in many low per capita income countries as well. Also many of the countries have started exploring LTE (4G). This includes Egypt, Libya, Kenya, Nigeria, Namibia and South Africa. It is expected that by 2015, the overall LTE subscription will be around 11.15 million in Africa.

As of 4Q, 2010 the biggest African market in terms of subscribers is Nigeria. This is followed by Egypt, South Africa, Algeria and Morocco.

As of 2Q, 2011 the Seychelles has the highest mobile penetration of 181 percent. This is followed by Botswana (133), South Africa (115), Morocco (110) and Tunisia (108).



South Africa is one of the biggest markets in the continent in terms of high end services. It accounts for more than 50 % of the fiber optics. In 2013 it will be focusing more and more on high end services such as video streaming, video conferencing, electronic newspaper and money transfer.  

Egypt is the biggest market in the North African region with 8.82 million mobile (100% penetration) and 7.62 million 3G subscription as of 2011. North Africa’s strengths lay in its youthful and colorful people, high purchasing power (compared to Sub Saharan Africa) and growth prospects in data services. Its challenges lay in intensive competition, saturated market and political uncertainty.     

Telecom service providers should offer a basket of service from which consumers can select desired services. Coming to business customers, they need to play a strong consultative role. 

Image Credit: focusafrica.gov

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