Photos: AFP/Getty Images

Upwardly mobile

By By Lanre Akinola | Published:  28 December, 2009

Continued growth in the continent’s mobile subscriber base and an expected shift towards more sophisticated devices in the coming years could make Africa the next frontier in the global mobile handset market

African mobile phone subscriptions are expected to continue growing at some of the fastest rates in the world. Fuelled by this growth, the region’s handset market may be on the verge of a technological leap forward.

Mobile telephone subscriptions across Africa surpassed 400m in 2009; a figure that is expected to double by 2015. This growth is fuelling demand for mobile handsets in the region, and is opening new opportunities for manufacturers. Yet the vast majority of mobile devices shipped to the continent continue to be basic text messaging and voice calling devices. In 2008, so called smart phones constituted just 3 percent of the market.

This may be about to change. Recent research by Frost & Sullivan, the consultancy, describes Africa as “the next frontier” in the mobile handset market. The company estimates that 139m handsets were shipped to African markets by 2007, and that this figure will increase to 400m by 2014. Crucially, this growth is to be accompanied by a gradual shift towards more sophisticated devices.

“First of all we’ve got the average price of handsets, which is going down year by year,” says Spiwe Chireka, telecoms analyst with Frost & Sullivan. While high end devices such as the iPhone or Blackberry will continue to be a rarity in the region, Ms Chireka argues that the purchase of middle tier devices is set to increase on the back of continued subscriber growth. “Unlike other developed markets where year-on-year subscriber growth is almost getting flat, we are still expecting an upward trend in the market, estimated to be between 20-22 percent annually,” she says.

“The introduction of 3G [networks] obviously is helping,” adds Badii Kechiche, Africa and Middle East analyst with Pyramid Research, an emerging markets-focused ICT research firm. The availability of the technology encourages mass production of handsets that can exploit it, driving down prices, he says. Between 2008 and 2009 the contribution of smart-phones to overall handsets shipped to the African market almost doubled, and Pyramid forecasts that this will increase to 22 percent by 2014.

However, while the networks are there, they do not always match the capacity of existing devices.

“I call them vanity products,” Ms Chireka says. “Operators do it because they can, or they are expected to do so.” Companies such as MTN and Vodacom now offer the latest Blackberry devices for their 3G networks in countries such as South Africa and Nigeria. However, the reality is that these networks are often unable to deliver on their promises. “If I look at a Vodacom map, they say to me that in my area I should be getting a connection of at least 2.4MB per second. The most I can get on a good day is usually about 400-600kB per second,” laments Ms Chireka, adding that similar problems exist across the continent, from Ghana to Tanzania and Kenya.

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