Analysys Mason SSA handset forecasts Mar2013 samples TOC RDRK0

© Analysys Mason Limited 2013

The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017

Research Forecast Report

The handset market in Sub-Saharan Africa: trends

and forecasts 2012–2017

March 2013

Roz Roseboro and Karim Yaici



Contents [1]

5. Executive summary

6. About this report

7. The number of active mobile handset SIMs in Sub-Saharan Africa will

grow at a 6% CAGR from 2012–2017

8. Increasing affordability and demonstrated value is critical to driving

sustained growth in the handset markets in Sub-Saharan Africa

9. Implications and recommendations

10. Implications and recommendations

11. Market drivers and inhibitors

12. The handset market in SSA will be driven by the multi-function usage of

phones and increasingly affordable data services

13. Consumers in SSA often use phones for more than person-to-person

voice communication

14. Operators in SSA offer cost-effective low-cost data plans, including

those for BlackBerry services, to increase the addressable market

15. Operators and content owners are keen to provide access to content

without customers incurring large data charges

16. Browsers designed for mobile handsets and SMS-based services help

users to access Internet content on lower-end handsets

17. 3G adoption in SSA is limited because of lack of coverage and

expectations of poor quality

18. The demographics of SSA lead to low take-up of smartphones and

mobile data services

2

19. Smartphones and feature phones are too expensive for most users in

SSA, although cheaper alternatives are beginning to enter the market

20. The grey market for mobile handsets is thriving in SSA because of the

high price of handsets, which is partly a result of heavy taxation

21. Regional forecasts

22. The number of active mobile handset SIMs in Sub-Saharan Africa will

grow at a 6% CAGR from 2012–2017

23. Handset data revenue will be the fastest-growing segment in the market,

while smartphones will command a growing share of total revenue

24. Smartphones will account for nearly 30% of handsets by 2017, driven by

lower prices and increased demand for content services

25. 2G handset connections will peak in 2015 in the region before slowly

declining as they are gradually replaced by 3G and 4G connections

26. ARPU will continue to decline in the region, but at a reduced pace

because spending on non-voice services will offset a decline in voice

spend

27. Smartphone ARPU will decline quickly because of falling data charges

and increased penetration in the lower end of the market

28. Individual country forecasts

29. Ghana’s handset revenue growth rate will be relatively low because the

market was at or near saturation at the end of 2012

30. Kenya’s handset revenue growth rate will be 4% CAGR for 2012–2017,

reflecting its relatively low overall handset penetration rate

Slide no. Slide no.



Contents [2]

31. Nigeria’s handset market is indicative of the region as a whole, with

handset revenue growing at a modest CAGR of 5% during 2012–2017

32. South Africa, as the most developed mobile market, has the highest

proportion of smartphones of all modelled countries, at 11% in 2012

33. Sudan has limited 3G coverage and therefore has the lowest

smartphone penetration of the modelled countries

34. Tanzania’s handset service revenue will grow fastest of all the countries

modelled because of rapid increases in feature phones

35. Uganda’s handset growth will outpace the regional average, because its

handset penetration rate is low

36. Market definition and methodology

37. Geographical coverage

38. Data series definitions

39. Forecasting methodology: our comprehensive telecoms forecast model

is supported by a sound knowledge of the SSA markets

40. Forecasting methodology: we base our forecasts on reported metrics,

and insight into a market

41. About the authors and Analysys Mason

42. About the authors

43. About Analysys Mason

44. Research from Analysys Mason

45. Consulting from Analysys Mason

3

Slide no.



List of figures

Figure 1: A non-exhaustive list of countries of Sub-Saharan Africa covered

in this report

Figure 2: Active mobile handset SIMs by device category, and smartphone

penetration, Sub-Saharan Africa, 2009–2017

Figure 3: Drivers and inhibitors of the handset market, Sub-Saharan Africa

Figure 4: Mobile handset and mobile broadband penetration rates in

selected countries, Sub-Saharan Africa, 2012

Figure 5: Sample data packages from representative operators in selected

countries, Sub-Saharan Africa

Figure 6: Examples of services designed for non-smartphone users offered

by selected operators, Sub-Saharan Africa

Figure 7: Mobile handset connections by technology generation, and 3G

and 4G penetration, Sub-Saharan Africa, 2009–2017

Figure 8: Demographic information for core countries, Sub-Saharan Africa

Figure 9: Representative price ranges of basic, feature and smartphones,

Sub-Saharan Africa

Figure 10: Tax as a proportion of total cost of mobile ownership for selected

core countries, Sub-Saharan Africa

Figure 11: Active mobile handset SIMs by country, Sub-Saharan Africa,

2009–2017

Figure 12: Handset service revenue by service category, Sub-Saharan

Africa, 2009–2017

Figure 13: Handset service revenue by handset type, Sub-Saharan Africa,

2009–2017

Figure 14: Active mobile handset SIMs by device category, and smartphone

penetration, Sub-Saharan Africa, 2009–2017

Figure 15: Mobile handset connections by technology generation, and 3G

and 4G penetration, Sub-Saharan Africa, 2009–2017

4

Figure 16: Mobile handset ARPU by country, Sub-Saharan Africa‚ 2009–2017

Figure 17: Mobile handset ARPU by device category, Sub-Saharan Africa‚

2009–2017

Figure 18: Active mobile SIMs by device category, and smartphone

penetration, Ghana, 2009–2017

Figure 19: Handset service revenue by handset type, Ghana, 2009–2017


penetration, Nigeria, 2009–2017

Figure 21: Handset service revenue by handset type, Kenya, 2009–2017


penetration, Nigeria, 2009–2017

Figure 23: Handset service revenue by handset type, Nigeria, 2009–2017


penetration, South Africa, 2009–2017

Figure 25: Handset service revenue by handset type, South Africa, 2009–

2017


penetration, Sudan, 2009–2017

Figure 27: Handset service revenue by handset type, Sudan, 2009–2017


penetration, Tanzania, 2009–2017

Figure 29: Handset service revenue by handset type, Tanzania, 2009–2017


penetration, Uganda, 2009–2017

Figure 31: Handset service revenue by handset type, Uganda, 2009–2017


The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017 5

Executive summary

Implications and recommendations

Market drivers and inhibitors

Regional forecasts

Individual country forecasts

Market definition and methodology

About the authors and Analysys Mason



Browsers designed for mobile handsets and SMS-based services help

users to access Internet content on lower-end handsets

Opera Mini is a Web browser designed for mobile phones. It

compresses data/renders Web pages to reduce data

consumption. This makes it easier to use the Internet on

feature phones.

Operators and handset makers are partnering with browser

companies. Examples include Etisalat Nigeria, which has a

branded Opera Mini browser, and MTN South Africa, which

preloads Opera Mini. Handset makers, Tecno Telecom and

Gionee (HK) Communication Equipment, have also partnered

with Opera Software to provide Opera Mini for users in Africa.

Orange has recently teamed with Baidu to preload Baidu’s

browser on smartphones across Africa. Orange also worked

with Baidu to develop El Browser, an Android-based browser,

which Orange says will further increase data compression

and therefore increase the speed of Internet surfing.

In addition, operators offer SMS-based services to allow

users to access information and receive social network

updates (such as Facebook and Twitter) using only a basic

phone. This allows users to become accustomed to using the

Internet, which helps to create demand for mobile data

services.

16

Service Sample operators

Facebook Etisalat (Nigeria), Tigo (Tanzania),

Vodacom (South Africa), MTN (Uganda)

Twitter Tigo (Tanzania), Zain (Sudan)

Chat Vodafone (Ghana), Zain (Sudan),

Safaricom (Kenya)

Google Chat Glo (Nigeria)

Google SMS MTN (Uganda)

Information services (such as

news, sports news, health

tips and horoscopes)

Airtel (Uganda), Safaricom (Kenya),

Vodafone (Ghana)

Voice-based SMS Vodafone (Ghana)

Internet browsing Tigo (Tanzania)

Figure 6: Examples of services designed for non-smartphone users offered

by selected operators, Sub-Saharan Africa [Source: Analysys Mason, 2013]



Ghana’s handset revenue growth rate will be relatively low because

the market was at or near saturation at the end of 2012

29


penetration, Ghana, 2009–2017 [Source: Analysys Mason, 2013]

Figure 19: Handset service revenue by handset type, Ghana, 2009–2017

[Source: Analysys Mason, 2013]

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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017 41

Executive summary

Key implications

Market drivers and inhibitors

Regional forecasts

Individual country forecasts

Market definition and methodology

About the authors and Analysys Mason



About the authors

Roz Roseboro (Principal Analyst) is the lead analyst for Analysys Mason’s The Middle East and Africa regional

research programme. Her primary areas of specialisation are market drivers in growth markets and understanding

the opportunities for operators and vendors in these markets. She also specialises in professional services needed

to deliver infrastructure services and in network equipment manufacturers. Roz has nearly 20 years’ experience in

market research, marketing and product management. She spent five years at RHK, where she ran the Switching

and Routing programme, and later the Business Communication Services programme. She spent nine years at

Motorola, working in IT product development and radio and mobile phone product management. Roz holds a BA in

English from the University of Massachusetts, Amherst, and an MBA in Marketing, Management and International

Business from the J.L. Kellogg Graduate School of Management at Northwestern University.

Karim Yaici (Analyst) is an analyst for Analysys Mason’s The Middle East and Africa regional research programme.

His primary areas of expertise are mobile software and handsets, IP Multimedia Subsystem (IMS) and the

development of next-generation services. He has provided recommendations to operators, telecoms solution

vendors and regulatory bodies with regard to market review, investment potential, best practices in the industry and

strategic responses to competitive threats. He has also carried out a number of operational benchmarking studies

and contributed extensively to the market assessment and forecasting of multiple verticals in the telecoms industry.

Prior to joining Analysys Mason, Karim was an associate analyst at Informa Telecoms & Media, where he authored

reports on mobile accessories and mobile applications. Prior to that, he worked as a research engineer in the

Centre for Communication Systems Research (CCSR) and Vodafone. Karim holds an MSc in Information Systems

Management from the University of Southampton and a PhD in human–computer interaction from the University of

Surrey.

42



About Analysys Mason

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43

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For more information, please visit www.analysysmason.com/research.



Research from Analysys Mason

44

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors,

through a range of research programmes that focus on different services and regions of the world.

Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research

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been bringing the benefits of applied intelligence

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45

Our clients in the telecoms, media and technology (TMT)

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Analysys Mason SSA handset forecasts Mar2013 samples TOC RDRK0

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