African Telcoms: Users Value Content as Much as Cost When Choosing Devices

Panelists from TECNO, Millicom, Airtel Africa and Mozilla, who spoke at the 17th annual AfricaCom conference that was held in Cape Town, South Africa on 11 November through 13 November, said that mobile device purchasers in Africa prefer getting the best value for their money over getting the least expensive handset. The panel members made these comments as they discussed how to encourage a greater pan-African uptake of smartphones. According to Millicom’s commercial director for Africa, Paul Martinez, available content is a crucial element for customers. He also said that users need to be educated about data and what they can achieve with smartphones.

Mobile phone adoption has been quickly outpacing income growth in many African countries. At the end of 2013, 65 percent of households in 23 countries in sub-Saharan Africa had at least one mobile phone. After Asia, the region is the second-largest mobile technology market, and it has potential for a lot more growth. The GSMA forecasts that mobile users in sub-Saharan Africa will reach 346 million by 2017. Mobile phone technology has transformed the lives of many Africans with everything from farming to banking. It is a major factor in driving economic growth in many African nations and has aided in the development of a burgeoning middle class in some countries.

In recent times as many MNOs have been upgrading their infrastructure to enable 3G/4G service, smartphones are slowly replacing lower-end feature phones, and this process could speed up if users became more aware of what can be done with data when infrastructures have been upgraded. We have written about several mobile operators in Africa bundling social media apps with plans in order to give subscribers a taste of data use and possibly upsell them packages with larger allowances. We have also written about bundling desired content services with plans as a way to increase sales. In many of these developing nations, it is important that local content be included that is tailored to the needs of its customers. Mobile operators, in a market such as Africa, should seriously consider the panel’s overall statement that operators as well as manufacturers need to play a role in getting more people to use data-enabled devices, as inexpensive smartphones begin to enter the market. It is important for operators not to put the cart before the horse; data plans will not sell if devices cannot support them.

“Although the African continent is one of the fastest growing in terms of mobile technology, and it boasts a number of fast-growing economies, many Africans still live below globally-recognized poverty levels. So even though mobile phones are connecting individuals across urban/rural and rich/poor divides, certain users are very cost-conscious, and their handset and plan purchases reflect this, with many subscribers buying multiple SIM cards to be shared among family members. While it is true that the functionality of data with lower-end smartphones will hook some African users on these devices and larger data plans, economic status will still play a major role in customer choices.”

Kamely Hayes,

Managing Editor,

The Tarifica Alert

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx