Value, content as important as cost for African devices

African consumers are more concerned with value for money than getting the cheapest phone available when buying devices, with manufacturers needing to get the balance between cost and content right in order to make sales, according to panelists at the AfricaCom conference in Cape Town.

Panelists from TECNO, Millicom, Airtel Africa and Mozilla were debating what can be done to encourage greater uptake of smartphones on the continent, and agreed simply rolling out the cheapest phone possible was not the answer.

“It is not only cost that matters. If you have a phone that is better but only US$20 more expect the customers to upsell,” said Raul Martinez, commercial director for Africa at Millicom.

“In the end it is the customers’ perception of what they are getting for what they paying. So if you provide a good phone, with a good experience, at a good price, then they know they are getting good value for every dollar that they spend.”

Martinez said content available on the phone was going to be crucial in obtaining customers, as well as educating people about data and what can be achieved with smartphones.

“In terms of the consumer’s needs, there’s an increasing need for having a devices in a local language. This is definitely important in Africa and it’s something we cannot abstract ourselves from,” he said.

Rick Fant, vice president of planning and ecosystem at Mozilla, whose phones cost between US$50 and US$100, agreed prices needed to come down as much as possible, but said the main thing was that the content was still of the quality of a high-end device.

“One of the attributes of the data phone is of course getting web access and getting communications going,” he said. “We think that is the critical point, we think the price points need to come down into the low thirties, but it is a full smartphone.”

He said the “very strong trend” of zero-rating providers such as Facebook and WhatsApp could play a positive role as an entry point for users to get online and become data knowledgeable.

“There is a potential for causing walled gardens there, but that kind of getting people online, showing them the benefits of the web, are the kind of options that need to be pushed further,” Fant said. “Obviously more than just Facebook and WhatsApp. One of the things I’ve been suggesting is why not zero-rate government information, health information.

“If we keep the user at the centre, make sure we satisfy their needs and give them options, Africa is going to shape what the web looks like in the future. We have not yet seen what the mass, high growth market is going to do and what it is going to demand.”

Sagar Darbari, head of segments and devices at Airtel Africa, said operators as well as manufacturers could play a part in getting more people using data-enabled devices.

“In Kenya, if you use Airtel Money to buy a particular device, you get a discount. That’s the other way we have been pushing the smartphones into the market,” Darbari said.

“The biggest challenge that we have is getting customers to get a data phone. That’s the key from an operator’s perspective. Our challenge is not to get those that have a phone to use it, but to get those that don’t have one to pick up a phone. There is a critical responsibility that the operator has, and that is to play a role in the devices segment itself. The crucial thing is how we are packaging the user experience.”

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