Today saw the kick-off of the second day’s keynotes at AfricaCom and it was all focused around data. Fredrik Jejdling, Head, Regional Sub-Saharan Africa, Ericsson, gave the opening keynote, and I have to say it was one of the best keynotes that I have seen so far at the show. Fredrik was the first vendor on the keynote program to actually address the problems facing Africa, rather than giving a somewhat-lazy product pitch.
Some of the statistics that Fredrik gave were mind-blowing and clearly demonstrated the high growth market potential. Mobile subscriptions in Africa are expected to grow tenfold between 2014 and 2019, from 76 million to 710 million. In order for this to happen, Jejdling said that about 65 percent of the continent needed coverage… clearly, there is still a long way to go.
Broadband is key to a connected society
Broadband is obviously key to a “networked society”, to use an Ericsson term, but as stated in my earlier blog, we still have 650 million people to get online. When operators build out their networks, they usually expect to see data usage double every year. In the large cities across Africa, they are seeing a threefold increase, which is adding to the challenge. Getting Africans online will undoubtedly have a massive impact, not only for them personally but also for the country as a whole, as GDP will rise in relation to those with connectivity. Kenya is a great example of this where the MPESA service has been a huge success.
Africa still has 80 percent of adults without a bank account or an electronic means to transfer money and pay bills. If we can get more adults banked, then there will be a greater take-up of other services. A recent survey carried out with mobile users in Africa found that 61 percent of people agreed that mobile phones gave them access to information that they would otherwise be without.
Operators need to improve quality and speed
The first panel of the day looked at “What services can be offered on LTE that a 3G network can’t do?”, and I have to say the operators were all singing from the same hymn sheet on this. Jannie Van Zyl, Executive Head, Innovation, Vodacom, said, “It is giving our customers broadband”. All of the other operators agreed with this and when Adrian Scrase, Head of Mobile Competence Centre, 3GPP, questioned the strategy on this and then asked, “Does this mean it will then be all about price, and you will have to get into a price war?”, the operators quickly ruled this out, with Miguel Soares, CMO, Unitel, Angola, saying that, “Improving the quality of the network and speed should be the main driver for operators” and they see LTE as being able to do that for them.
As well as quality and speed, another recurring theme for the panel was one which came up time and time again yesterday — that is access to local content in local languages. Dov Bar-Gera, Group CEO, YOOMee, really emphasised the importance of this and it was good to see later in the morning that companies like TECNO Group are trying to address this.
LTE is not the right technology for M2M
It is clear that operators are seeing LTE just as a means of providing broadband to their customers. The needs and development of Africa are very different to other continents. Following on from Ericsson’s earlier presentation, the question was posed about the potential of using LTE for more than just broadband and using it for things like machine-to-machine. This idea was quickly shot down, with Van Zyl stating that, “LTE is not the right technology for M2M” and that there is plenty of 2G technology for that. Smile’s CIO was also vocal in his agreement with Van Zyl on that.
Industry needs to work on driving down the cost of data
While LTE might be a good way of providing broadband, customers won’t have access unless they can afford a device to get online with. The majority of phones sold in Africa are still very much used for voice so low-price, entry-level smart phones are essential for the uptake of data services.
Rick Fant, VP, Planning and Ecosystem, Mozilla, was discussing how Mozilla is working with manufacturers to really drive down the price of entry-level smartphones and they themselves are releasing Firefox OS in Africa, after successful launches in countries such as India and Brazil, as well as Asian markets. It was announced earlier in the year that Airtel, MTN South Africa and Tigo have all signed up to carry Firefox OS handsets.
Rick Fant, Mozilla, also made the very interesting point that it is all very well having low cost handsets in the market but customers need to be able to afford the cost of data. The industry now really needs to work on driving down the cost of data through economies of scale. Current data prices means that if Africans were using the same amount of data as Europeans, the cost of doing so would be $600-$1,200 per month, which is far out of the reach of many. Indeed, people in Europe wouldn’t pay so much for connectivity!
First sub-$30 smartphone announced
The morning ended on a high with Arif Chowdhury, VP, TECHNO Group, not only discussing the company’s drive for more content in local languages but also announcing that it will be launching the first sub-$30 smartphone in its African markets during the first half of 2015. That is sure to have a really great impact on the market and will force other low-cost handset manufacturers to further drive down their costs, thus opening the connectivity market for many more.
It is clear that a lot is being done in trying to get more Africans online, but unless the price of data comes down, uptake and use of services will continue to be sparse.
Don’t forget to come along to TM Forum [email protected] on Thursday November 13 in the Roof Terrace Room. Lots of great discussions will be taking place on CEM, IoT and IT transformation.