Smartphone usage exploding in Africa

.... but operators need to work together to maximise mobile date opportunity

Africa is seeing a dramatic increase in smartphone and data usage, which is set to fuel an increase in non-voice revenues to 20% of mobile service revenues by 2014, according to Informa Telecoms & Media.

Around 60% of all mobile phones being sold by regional player MTN in own-branded shops in South Africa are smartphones, according to MTN CEO Karel Pienaar, speaking at Informa Telecoms & Media’s AfricaCom event in Cape Town this morning. MTN is currently selling 3,000-5,000 mobile broadband-enabled laptops per month.

Pienaar said that in future most of MTN’s revenue growth will be in data, while pointing out that at the moment generally mobile data excluding SMS revenues are very low, at just 1.35%. To maximise profit from mobile data in the region, Pienaar argues that operators need to bring the cost of providing data down to below 20% of its current level.

He also said that managed and converged services would be important area for growth. MTN is moving into the enterprise space aggressively, deploying fiber and ICT solutions to tap these nascent growth markets.

Dynamic tariff setting will allow operators in Africa to become more flexible in their pricing strategies, and maximise value from low and high-end users, according to Nick Jotischky, principle analyst at Informa Telecoms & Media, speaking at the event this morning.

Jotischky also highlighted the as-yet untapped growth possibilities in rural areas for mobile operators in the region. In these areas access to the mobile internet is only possible via a mobile connection, which represents significant opportunity for operators. Infrastructure sharing will enable opex cuts and allow carriers to build out to unprofitable areas, Jotischky said.

To build out networks in rural areas, Jotischky said that managed service contracts in Africa will increase, which is a positive trend for the industry and a sign of acceptance from operators that specialist operational providers can play part in vibrant growth.