Africa’s lag in land-based telecoms infrastructure has propelled the continent directly into the mobile age, opening up unparalleled short-term growth prospects.
Sector players have seen growth especially in mobile Internet and banking services, as people use cellphone technology for lack of landlines or cable Internet.
“Africa is the last market to emerge. China’s emerged, India’s emerged. So where else outside Africa needs emerging? The growth opportunity is right here,” said Nicolas Regisford, co-founder of Mi-Fone, a South African company that specializes in producing low-cost handsets.
Mobile subscribers in Africa have increased by 20 percent annually over the past five years and will reach more than 735 million by the end of next year, a study by global mobile operators association GSMA found last month.
“Africa is now the world’s second-largest mobile market by connections after Asia, and the fastest growing mobile market in the world,” according to the GSMA Africa Mobile Observatory 2011 report.
Industry players are equally excited over the commercial prospects posed by the continent’s 1 billion people.
ENTRY-LEVEL PHONES
“Samsung is expecting revenue within Africa to amount US$15 billion, with the SADC [Southern African Development Community] region contributing about 25 percent of that figure, by 2015,” said Gavin Clare, the company’s representative in Zimbabwe.
This philosophy also drives Mi-Fone, which eyes the immense market of consumers seeking entry-level phones.
“The African person wants a mobile device which will be doing mobile payments and accessing the world wide Web. Right now, a lot of people cannot afford the smartphones that are flooding the market,” Regisford said.
Ironically, this lack of traditional infrastructure, telecom and landline services, Internet penetration and broadband access, and banking services drives this growth in Africa, according to mobile systems expert Tomi Ahonen.
“As it happens, the global Internet industry believes that the future of Internet is mobile. The global telecom industry believes that the future of the telecom industry is mobile and the global money industry is starting to believe that the future of money is mobile,” Ahonen said.
One case in point is Kenya, already the world’s largest mobile financial services user in relation to its GDP. Almost 18 million Kenyans use their cellphones as a bank account to deposit or transfer money — contributing 8 percent of the GDP and several other African countries are following suit.
TEXTS AND CALLS
The “maturity of the market,” as financiers call it, is another asset. Applications dominate the mobile world in Europe and the US, but earn relatively little. On the other hand, the mobile business in Africa keeps earning through more conventional services like text messages and voice calls.
“The business model around the basic services on mobile are much more realistic and robust,” Ahonen said at a workshop in Johannesburg last month.
This cellphone explosion in Africa contributes as much as US$56 billion to the region’s economy, or 3.5 percent of its GDP, but the indirect effect on growth is perhaps even higher.
“Local development of telecommunication has a direct impact on GDP. This is a professional tool. Many handcrafters or retailers dramatically need to be connected to the world to make business,” Regisford said.
“In developing countries, for every 10 percent increase in mobile penetration, there is a 0.81 percentage point increase in a country’s GDP,” the GSMA report found.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS