Smartphone price cuts to drive internet in Africa

INTERNET

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Image: Aidan Baigrie. By BiztechAfrica
Aidan Baigrie

The rapid drop in smartphone pricing will play a major role in bringing internet connectivity to Africans over the next five to 10 years, uplifting economies throughout the continent in the process. This is according to Aidan Baigrie, Head of Business Development at SEACOM.

He says that with some smartphones already dropping below the USD100 threshold and sub USD50 devices inbound, smartphones are rapidly falling to price levels that make them accessible to a larger market in Africa.

"There is mobile phone penetration of around 70% across Africa, but smartphone penetration is only 10% to 15%," says Baigrie. "The question is how do we lift smartphone penetration closer to the 70% level, so that as many Africans can enjoy mobile broadband services as the current numbers that have access to basic GSM services.”

Baigrie says the key lies in the falling prices of smartphones and other smart devices. Huawei's USD80 IDEOS Android smartphone has been a hit in the Kenyan market and similar examples can be found in other parts of the continent, showing that the market for data services is there once consumers can afford smart devices. He also predicts that there will be an increase in smart devices such as smart readers, tablets and hybrids being launched into the market in 2013.

China's firm Spreadtrum Communications recently released two new low-cost, 600MHz Android smartphone platforms aimed at ultra-cheap smartphones in the USD40 range. "These devices are having a massive effect on the African market, bringing Internet services in reach for more people than ever before," says Baigrie.

In more mature markets such as South Africa, operators are already reporting that they are shipping more smartphones than cellphones or feature phones, a trend that will soon become apparent in the rest of the continent. In the process, many Africans are gaining access to services such as social networking, the Web, and email for the first time, says Baigrie. Africa will leapfrog the PC era to the mobile, post-PC world, he adds.

"Like users in the rest of the world, Africans want Internet access via smartphones for entertainment, shopping, social networking and commercial applications," he adds. "This is leading to an explosion in demand for mobile data on African telecommunications networks. And the fact that mobile data prices have fallen dramatically in the past few years has also helped to spur demand."

Baigrie notes that this sort of mobile connectivity will be important in helping African countries to grow their economies by promoting access to information, communication, education and commerce. It will also challenge the telecommunications industry to rapidly grow its infrastructure and capacity to keep up with demand, he says.

SEACOM says it is constantly growing its longhaul fibre capability, but African operators will also need to keep investing in national backbones and last-mile connectivity to cater for the extra strain put on their networks by the millions of smart devices that will enter the market in the next few years. The internet is on Africa’s doorstep, the key to unlocking this opportunity is getting it from the doorstep and into our home.



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