Lower prices, social media, spur African mobile broadband
A new report by Frost & Sullivan says affordable handsets and a boom in social media usage will spur mobile broadband markets in West and Central Africa.
The report says in recent years, the West and Central African region has witnessed a dramatic increase in mobile broadband connections, mainly due to the surge in mobile broadband connections in Nigeria.
Effective regulatory environments have made Nigeria and Ghana among the most dynamic broadband markets in sub-Saharan Africa with over 150 market participants and massive terrestrial infrastructure development. With the deployment of advanced technologies, such as 3G networks in the Democratic Republic of Congo (DRC) and Gabon, mobile broadband subscribers are expected to outpace fixed broadband connections in these two countries over the next 5 years.
New analysis from Frost & Sullivan, West and Central African Broadband Market Tracker, finds that the market (covering Nigeria, Ghana, DRC and Gabon) earned revenues of approximately USD1.2 billion in 2010 and estimates this to reach USD2.5 billion in 2017. The low levels of broadband penetration in the four countries indicate that there are significant growth opportunities in the short-to-long term.
"The availability of cost-effective mobile and wireless solutions will be a key market driver," notes Frost & Sullivan's Information and Communications Technologies Research Analyst Mervin Miemoukanda. "At the same time, greater demand for access to social media platforms will emerge as the most important factor for market participants to formulate their strategy for this year."
Rising demand for broadband services in the region has helped reduce the cost of customer-premises equipment, as well as smartphones. Internet service providers (ISPs) have introduced affordable Chinese customer-premises equipment to render broadband services to consumers.
"Furthermore, broadband providers are expected to increase partnerships with equipment vendors to reduce the cost of customer-premises equipment," adds Miemoukanda. "The impact of this driver is expected to be high throughout the forecast period, as mobile operators are shifting focus on growing their data offerings."
The advent of social media platforms, coupled with growing computer-literate societies, has boosted demand for broadband connections across the region. As a result, the number of broadband users in these countries has swelled.
"The increase in broadband users has been primarily because mobile operators have deployed advanced technology networks," remarks Miemoukanda. "As consumers are becoming more aware of the benefits of social media platforms, this driver is expected to remain high throughout the forecast period in all four countries."
With decreased bandwidth costs in the region, the uptake of broadband services is expected to increase significantly. More and more households, and small and medium companies, are expected to sign up for broadband services. As voice revenues have been declining, mobile operators are expected to shift focus on broadband services to maintain profit margins.
"Mobile operators are expected to improve the quality of services through continuous infrastructure investment, such as network capacity upgrade and deployments of new technologies; develop innovative solutions such as cyber cafés for broadband services targeting the mass market and focus on enterprise solutions" concludes Miemoukanda. "These strategies will help mobile operators sustain their profit margins."