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Declining Prices Will be Key to the Uptake of Mobile Voice and Internet Services Says Frost & Sullivan - Operators look to maximise opportunities in sub-Saharan Africa's high-growth mobile markets
Declining Prices Will be Key to the Uptake of Mobile Voice and Internet Services Says Frost & Sullivan

 

NewswireToday - /newswire/ - Cape Town, South Africa, 2011/11/21 - Operators look to maximise opportunities in sub-Saharan Africa's high-growth mobile markets.

   
 
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Significantly low penetration levels of broadband in Africa is being accompanied by proportionally low Internet usage levels. While the majority of countries have penetration levels lower than 5 per cent, 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.

New analysis from Frost & Sullivan (wireless.frost.com), Sub Saharan African Communications Quantitative Quarterly Tracker, covering South Africa, Mozambique, Tanzania, Congo (Democratic Republic), Lesotho, Nigeria and Uganda communications markets, finds that these countries had 181.7 million mobile and fixed telephony subscribers and 29.8 million Internet subscribers in 2010 and estimates this to reach 266.1 million mobile and fixed subscribers and 77.5 million Internet subscribers respectively in 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 Frost & Sullivan's Information and Communication Technologies Industry Analyst Vitalis G. Ozianyi. "Operators in the region are investing heavily in mobile infrastructure, including base stations and transmission networks, with the aim of making higher network capacity available at a 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, in order 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 Ozianyi. "This will drive the demand and uptake of such services."

The most prominent challenge concerning 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.

"Operators in Africa are likely to experience challenges in penetrating a market that is largely dominated by consumers with lower living standards," explains Ozianyi. "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 also boost penetration levels. Offering an extensive range of Internet access packages would assist in meeting 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 Ozianyi. "Growth of voice and Internet markets is likely to be supported by the availability of low cost smartphones."

If you are interested in more information on this study, please send an email with your contact details to Samantha James, Corporate Communications, at samantha.james[.]frost.com.

Sub Saharan African Communications Quantitative Quarterly Tracker is part of the Mobile & Wireless Communications Growth Partnership Service programme, which also includes research in the following markets: Southern Africa Mobile Communications Market, East African Mobile Communications Market, West and Central African Mobile Communications Market and Southern Africa Broadband Market. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

Sub Saharan African Communications Quantitative Quarterly Tracker / M6F5-65

 
 
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Declining Prices Will be Key to the Uptake of Mobile Voice and Internet Services Says Frost & Sullivan

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