The increased value of value added services in Africa
African mobile landscape has largely evolved during the last decade. During those years, growth of mobile market was impressive. According to ITU’s report “Telecommunication/ICT markets and trends in Africa, 2007” Africa’s penetration in terms of unique mobile cellular subscribers was only 22% in 2006. The percentage was more than double at the end of 2015 (GSMA, The Mobile Economy - Africa 2016): 46%. And it’s still growing...
As a result, during those years we have witnessed major roll outs of innovative mobile solutions, besides the basic networks from operators. Several players, domestic and international, have seized the moment to launch a plethora of Value Added Services, as the growing ecosystem gave them the opportunity to reach more customers. The same path was previously followed in other western markets, but in Africa was more than necessary. Low ARPU of subscribers was the main reason.
Africa’s mobile economy is now in a critical point. Acquisition of new subscribers (which was the steam engine of previous years) will be more expensive in the future. Operators will have to invest heavily in the development of networks in rural areas and sparsely populated areas in order to gain new customers. Growth rate remains positive but it will be lower than this of previous years. We can take a glimpse from the recent Ericsson Mobility Report (June 2017). According to it, mobile subscriptions in Africa (Q1 2017) have reached 985 million. One year earlier, subscriptions were 965 million. In other words, during this time, Africa has gained only 20 million subscriptions, a growth rate slightly over than 2%. In the same time mobile broadband subscriptions growth in the future for the region was also downgraded. In this year’s report, expected growth is 3X, in 2016 was 4X.
All the above are another sign of the increased significance that value added services have for Africa’s mobile economy. The continent offers great opportunities and there are multiple sectors to consider of a VAS rollout. As an emerging market, Africa witnesses a huge demand for mobile solutions in core sectors like healthcare, agriculture, education, banking, and commerce.
We, at Channel VAS offer a large portfolio of such services, with real value not only for the consumer but also for the operator.
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