The mobile opportunity in Africa

African markets offer exciting opportunities. This is especially true for an emerging industry such as mobile. The presence of a few “traditional” companies such as Vodafone, MTN and Zain, either as direct players or as majority shareholders in various mobile ventures across Africa, as well as the push of new players like Obopay and AdMob into the market attests to this claim.

Africa offers a number of attributes that are particularly conducive to its attractiveness for the mobile industry. Firstly, and maybe most importantly, African countries suffer from a general lack in the number of fixed telecommunication lines. Secondly, a large number of Africans are “unbankable” in terms of internationally accepted banking standards. This is coupled with wide open spaces, inhabited by rural communities, who don’t even have access to a bank because there are no branches or ATM’s. Consequently, business in Africa is done largely on a cash basis.

On the other hand the mobile phone penetration among the African populace is extremely high, in some countries over 100% of the actual population. This also translates into real numbers. For example in South Africa over 40 million people own a cell phone, in Nigeria it is over 60 million and even in Zimbabwe, a country suffering from devastating socio-political and economic conditions, citizens own  mobile phones. Countries with “below par” mobile phone penetration such as Kenya (40%) are catching up fast and report exponential growth in mobile phone ownership.

What’s more, over 90% of these mobile phones are WAP enabled, and while this technical feature has not yet been widely exploited commercially, most African countries stand ready with GPRS and 3G technologies. According to studies by Vodafone and Nielsen Netratings, released towards the end of 2008, twice as many South Africans access the internet via their mobile phone (10 million) than via their computer (5 million). The former number has now risen to 15 million. South African networks and mobile phone manufacturers have responded to this growing number of mobile internet users with advertising that focuses on offering easy to use, cheap data plans for both prepaid- and contract customers.

It is therefore not surprising to note that Africa is not only ready for mobile, but ideally positioned to benefit from the mobile technology explosion. This is true for companies who wish to enter the market to generate profits as well as the African population, which can improve its lifestyle by leapfrogging many developed countries with the use of mobile applications.

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