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Sub-Saharan Africa: Mobile’s growth is based on local needs

21 August 2022

At the beginning of 2019, during WEF 2019, in an interview on Deutsche Welle, Channel VAS’s CEO Bassim Haidar, argued that “the secret of success for doing business in African countries is individualized knowledge of the market and localized engagement”. He also suggested to any western company, interested in doing business in the region “to physically come and understand local rules as well as the culture in Africa”.

Almost a year later, the latest report of GSMA Intelligence, “Global Mobile Trends 2020” confirms his words, describing Sub-Saharan mobile market as a market for local players, based on local needs. GSMA analysts’ conclusions show that the region’s market is characterized by the dominance of local players and their precedence over the launch of new services, as they have better knowledge of the African infrastructure, the native population and the special needs they have.

For Sub-Saharan Africa, 2019 is a significant year. By the end of 2019, mobile broadband (MBB) connections (3G and above) will for the first time account for the majority of total mobile connections. Analysts argue that this will be “an important inflection point for the region, and reflects a growing shift in the way consumers use digital platforms”. 3G will be the dominant technology in the years to come, but until 2025 4G is expected to gain significant ground, becoming the second most dominant mobile technology. Affordability of 4G devices could unlock the full potential of 4G technology, but for the time being it remains a challenge. The report says that “smartphone affordability is the main limiting factor for 4G adoption, with the average selling price of devices still above $100” adding that there is a need for initiatives of more affordable devices or implement alternative financing solutions for 4G devices to drive adoption. Such a solution could be Channel VAS’s handset loans which serves a double purpose: it could fuel ARPU and loyalty for mobile operators and it could be a tool for financial inclusion in today’s emerging markets.

 

 

 

 

 

 

 

4G coverage versus 4G adoption (June 2019) based on GSMA Intelligence report

 

 

 

For GSMA’s report operators will play a central role in the impending digital disruption of the media and entertainment sector. “Rising smartphone adoption, a youthful consumer base and sluggish adoption of digital distribution channels by traditional broadcasters and content producers are driving the digital disruption of the media content space” and operators will lead this trend, building on existing customer relationships, brand power and digital channels. On the other hand, operators should find sustainable sources for locally relevant content, taking into consideration both the low-income population and the growing competition from local and global OTT players.