Mobile data and applications are the next growth areas in Africa's mobile network industry, according to operators and solution providers at the Next Generation Telecoms Africa Summit recently held in Nairobi, Kenya.
Faced by declining incomes from the mainstream voice business - as tariffs plummet amid fierce competition - the industry is looking to value-added services (VAS) to shore up its bottom line, spurring rapid innovation in mobile services, delegates at the summit heard.
According to the delegates, latest data from Opera shows Africa's data usage grew by 331% last year - the highest of any region - with SA, Nigeria, Egypt, Kenya and Ghana making the top five countries in terms of page views.
SA and Nigeria made it to the top 10 globally, ahead of the US and Brazil. In addition, Opera notes that countries like Sudan and Zimbabwe have registered impressive growths in terms of page view growth at 4 900% and 2 300% respectively.
However, telcos will have to look at how to get spectrum at reasonable prices and ensure an efficient content delivery architecture said Patrick Puges, vice-president of emerging markets networks and IT at Telkom Orange.
“We have seen very strong customer expectations demanding competitive pricing and quality end user experience,” he said.
This has meant that even with the phenomenal growth of mobile data, revenue from VAS is still rarely hitting 10% of operators' total revenue, Puges explained, noting that however, that is expected to grow to 30% in the next three to four years.
The delegates noted that supporting infrastructure, regulatory frameworks and taxation were key drivers in boosting the growth of the data market.
Safaricom's CEO Bob Collymore added that access to affordable 3G handsets will be instrumental in driving mobile Internet in the continent.
“We have just launched [in Kenya] the cheapest smart android phone in partnership with Huawei at only $100,”said Collymore.
Globally, mobile data penetration is expected to hit one billion subscriptions in 2012 and although voice still remains the cash cow for telcos, operators seeing reduced margins are resorting to providing additional services.
It also came to the delegates' attention that Africa is additionally seeing a big leap in mobile applications that enable subscribers to access information, transact and get services.
Already, they heard, several countries have set the pace in developing groundbreaking applications.
Kenya's Mpesa - a mobile money transfer system - made $9.3 million in revenue last financial year, while SA's instant messaging application, Mxit, now has 27 million users, the Summit also discussed.
Mobile applications are also helping to deliver vital services to Africa's largely rural communities, with customers now getting health, agricultural and other government services through their mobile phones.
“The important thing is to make the applications relevant and useful to local populations,” said Vuyani Jarana, executive-director of Vodacom SA.
Jarana predicts the growth areas will be in healthcare and generally in the public sector. “Mobile applications in Africa bring services and information closer and faster to people,” he said.
Analysts additionally see an opportunity for localising mobile applications and content developers to ride on the mobile boom in Africa.
“Local content is going to be very important in the growth of mobile data, and making the content mobile and accessible across different platforms will be a game changer in the near future,” said Chris Lewis, IDC analyst.
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