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London - Sub-Saharan Africa’s telecoms market will grow faster than any other region worldwide over the next five years, a forecast report from research firm Analysys Mason shows.
Retail telecoms revenue will grow at a compounded annual growth rate of 6.4%, “but … operators in the region must still look to develop new digital economy revenue streams to supplement core services,” the report reads.
It is expected to reach $59bn by 2018.
In the face of declining SMS and fixed voice revenue, the growth areas highlighted in the report are handset data services, mobile broadband and fixed broadband.
Analysys Mason predicts that the number of mobile broadband connections will reach 29.3m by 2018 and that by 2018 smartphones will account for 80% of active broadband connections and 22% of handsets in the region overall.
Interim results
“The take-up of smartphones in the region is progressing more quickly than we were forecasting earlier this year, driven by the availability of affordable handsets and consumer appetite for smartphones, which has been boosted by data services,” the report said.
The two biggest mobile operators in the country, Vodacom and MTN, have together registered at least 13m smartphones on their networks.
Announcing their interim results in August, MTN said they had 6.5m smartphones on their network while Vodacom said earlier its interim results that it has about 6.6m smartphones.
Coverage
As data usage soars, networks are forced to increase capital expenditure on networks to improve capacity, another area of competition. Network operators have upped investment in networks in an effort to provide consumers with the best experience as well as to keep up with international trends.
The report said take-up of 3G networks would reach 152m active SIM cards by 2018.
“3G take-up is clearly driven in part by fixed broadband substitution, but will also be driven by operators’ efforts to expand 3G coverage and capacity, and increasing availability of less expensive data tariffs and affordable, data-enabled devices,” the report notes.
However, the 2G base in Sub-Saharan Africa will continue to increase and will still account for about 78% of SIM cards in 2018.
Hindered growth
LTE networks, the next generation of networks, is still a long-term play in Sub-Saharan Africa constrained by spectrum availability issues, coverage, device affordability and licensing delays, according to the report.
Locally, Vodacom, MTN, Cell C and Telkom have all had LTE trials and now offer them commercially.
But spectrum issues have hindered growth in this area.
Over-the-top network services will also gain traction in this period, but willingness to pay is limited and enabling payments is also a challenge.
Mobile money
“Mobile money continues to be an area of intense interest for the region, and for service providers, given the size of the opportunity among the unbanked,” the report said.
Kenya, in particular, has been extremely successful with their mobile money offering M-Pesa in East Africa. MTN has also mentioned that mobile money is a huge growth area.
“Operators are also turning their attention to monetising customer relationships through cross-selling nontelecoms financial products, such as insurance [for example, Airtel’s and MTN’s recent airtime-paid insurance offerings in Nigeria],” the report states.
Retail telecoms revenue will grow at a compounded annual growth rate of 6.4%, “but … operators in the region must still look to develop new digital economy revenue streams to supplement core services,” the report reads.
It is expected to reach $59bn by 2018.
In the face of declining SMS and fixed voice revenue, the growth areas highlighted in the report are handset data services, mobile broadband and fixed broadband.
Analysys Mason predicts that the number of mobile broadband connections will reach 29.3m by 2018 and that by 2018 smartphones will account for 80% of active broadband connections and 22% of handsets in the region overall.
Interim results
“The take-up of smartphones in the region is progressing more quickly than we were forecasting earlier this year, driven by the availability of affordable handsets and consumer appetite for smartphones, which has been boosted by data services,” the report said.
The two biggest mobile operators in the country, Vodacom and MTN, have together registered at least 13m smartphones on their networks.
Announcing their interim results in August, MTN said they had 6.5m smartphones on their network while Vodacom said earlier its interim results that it has about 6.6m smartphones.
Coverage
As data usage soars, networks are forced to increase capital expenditure on networks to improve capacity, another area of competition. Network operators have upped investment in networks in an effort to provide consumers with the best experience as well as to keep up with international trends.
The report said take-up of 3G networks would reach 152m active SIM cards by 2018.
“3G take-up is clearly driven in part by fixed broadband substitution, but will also be driven by operators’ efforts to expand 3G coverage and capacity, and increasing availability of less expensive data tariffs and affordable, data-enabled devices,” the report notes.
However, the 2G base in Sub-Saharan Africa will continue to increase and will still account for about 78% of SIM cards in 2018.
Hindered growth
LTE networks, the next generation of networks, is still a long-term play in Sub-Saharan Africa constrained by spectrum availability issues, coverage, device affordability and licensing delays, according to the report.
Locally, Vodacom, MTN, Cell C and Telkom have all had LTE trials and now offer them commercially.
But spectrum issues have hindered growth in this area.
Over-the-top network services will also gain traction in this period, but willingness to pay is limited and enabling payments is also a challenge.
Mobile money
“Mobile money continues to be an area of intense interest for the region, and for service providers, given the size of the opportunity among the unbanked,” the report said.
Kenya, in particular, has been extremely successful with their mobile money offering M-Pesa in East Africa. MTN has also mentioned that mobile money is a huge growth area.
“Operators are also turning their attention to monetising customer relationships through cross-selling nontelecoms financial products, such as insurance [for example, Airtel’s and MTN’s recent airtime-paid insurance offerings in Nigeria],” the report states.
