Mobile operators bet big on Africa broadband
First internet experience via mobile handset; Data revenue about $5 bln, expected to double in 2014; Africa needs broadband expansion for economic growth.
February 10, 2011 12:51 by Reuters
On a continent where a computer is beyond the reach of most people, wireless operators in Africa are betting that broadband via a cheaper mobile device can deliver explosive growth and help transform economies.
While mobile firms in developed markets have long seen mobile broadband as a lucrative add-on service, Africa’s limited internet infrastructure means that mobile phones are becoming the point of entry for high-speed Internet.
Industry giants such as South African group MTN, Indian operator Bharti Airtel and France Telecom’s Orange unit, as well as smaller firms like South Africa’s unlisted Cell C, are ramping up investments to win the new battleground of high-speed internet via mobile phones.
“For many consumers, their first internet experience is via a mobile handset — and this is the next revenue frontier for African markets,” Karel Pienaar, managing director of MTN South Africa, said at an industry conference in Cape Town last year.
Emerging markets telecoms research firm Delta Partners expects non-voice revenue in Africa, including short messaging services, to hit $10 billion by 2014, from about $5 billion now.
Mobile broadband still accounts for a small fraction of industry revenue, but its contribution is growing rapidly and is now helping to boost revenues at African operators.
MTN, Vodafone’s Vodacom and Kenya’s Safaricom have pointed to rising smartphone and mobile internet use as partly helping earnings last year.
MTN recently delivered a 46 percent rise in first-half data revenue to 2.9 billion rand ($413.2 million), while rival Vodacom posted data growth of 41 percent.
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