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
© Analysys Mason Limited 2013
The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
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Contents [1] Slide no.
Slide no.
5.
Executive summary
6.
About this report
19. Smartphones and feature phones are too expensive for most users in SSA, although cheaper alternatives are beginning to enter the market
7.
The number of active mobile handset SIMs in Sub-Saharan Africa will grow at a 6% CAGR from 2012–2017
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
8.
Increasing affordability and demonstrated value is critical to driving sustained growth in the handset markets in Sub-Saharan Africa
21. Regional forecasts
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
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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
The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
Contents [2] Slide no.
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
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
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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 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 Figure 20: Active mobile SIMs by device category, and smartphone penetration, Nigeria, 2009–2017 Figure 21: Handset service revenue by handset type, Kenya, 2009–2017
Figure 6: Examples of services designed for non-smartphone users offered by selected operators, Sub-Saharan Africa
Figure 22: Active mobile SIMs by device category, and smartphone penetration, Nigeria, 2009–2017
Figure 7: Mobile handset connections by technology generation, and 3G and 4G penetration, Sub-Saharan Africa, 2009–2017
Figure 23: Handset service revenue by handset type, Nigeria, 2009–2017
Figure 8: Demographic information for core countries, Sub-Saharan Africa
Figure 24: Active mobile SIMs by device category, and smartphone penetration, South Africa, 2009–2017
Figure 9: Representative price ranges of basic, feature and smartphones, Sub-Saharan Africa
Figure 25: Handset service revenue by handset type, South Africa, 2009– 2017
Figure 10: Tax as a proportion of total cost of mobile ownership for selected core countries, Sub-Saharan Africa
Figure 26: Active mobile SIMs by device category, and smartphone penetration, Sudan, 2009–2017
Figure 11: Active mobile handset SIMs by country, Sub-Saharan Africa, 2009–2017
Figure 27: Handset service revenue by handset type, Sudan, 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 © Analysys Mason Limited 2013
Figure 28: Active mobile SIMs by device category, and smartphone penetration, Tanzania, 2009–2017 Figure 29: Handset service revenue by handset type, Tanzania, 2009–2017 Figure 30: Active mobile SIMs by device category, and smartphone 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
Executive summary Implications and recommendations Market drivers and inhibitors Regional forecasts Individual country forecasts Market definition and methodology About the authors and Analysys Mason
© Analysys Mason Limited 2013
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
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.
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Figure 6: Examples of services designed for non-smartphone users offered by selected operators, Sub-Saharan Africa [Source: Analysys Mason, 2013]
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)
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
Ghana’s handset revenue growth rate will be relatively low because the market was at or near saturation at the end of 2012
Basic phone
Feature phone
Smartphone
Smartphone penetration
© Analysys Mason Limited 2013
0.5
Smartphone
Feature phone
2017
0.0
2016
0%
1.0
2015
0
2017
1%
2016
5
2015
2%
2014
10
2013
3%
2012
15
2011
4%
2010
20
1.5
2014
5%
2013
25
2.0
2012
6%
2011
30
2010
7%
2009
35
2.5
Revenue (GHS billion)
8%
Figure 19: Handset service revenue by handset type, Ghana, 2009–2017 [Source: Analysys Mason, 2013]
Percentage of handsets
40
2009
Connections (million)
Figure 18: Active mobile SIMs by device category, and smartphone penetration, Ghana, 2009–2017 [Source: Analysys Mason, 2013]
Basic phone
The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
Executive summary Key implications Market drivers and inhibitors Regional forecasts Individual country forecasts Market definition and methodology About the authors and Analysys Mason
© Analysys Mason Limited 2013
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
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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.
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
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About Analysys Mason Knowing what’s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research.
Consulting Our focus is exclusively on TMT. We support multi-billion dollar investments, advise clients on regulatory matters, provide spectrum valuation and auction support, and advise on operational performance, business planning and strategy. We have developed rigorous methodologies that deliver tangible results for clients around the world. For more information, please visit www.analysysmason.com/consulting.
Research We analyse, track and forecast the different services accessed by consumers and enterprises, as well as the software, infrastructure and technology delivering those services. Research clients benefit from regular and timely intelligence in addition to direct access to our team of expert analysts. Our dedicated Custom Research team undertakes specialised and bespoke projects for clients. For more information, please visit www.analysysmason.com/research. © Analysys Mason Limited 2013
The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
Research from Analysys Mason 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 projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and services with customised industry intelligence and insights. To find out more, please visit www.analysysmason.com/research. © Analysys Mason Limited 2013
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
Consulting from Analysys Mason For more than 25 years, our consultants have been bringing the benefits of applied intelligence to enable clients around the world to make the most of their opportunities. Our clients in the telecoms, media and technology (TMT) sectors operate in dynamic markets where change is constant. We help shape their understanding of the future so they can thrive in these demanding conditions. To do that, we have developed rigorous methodologies that deliver real results for clients around the world. Our focus is exclusively on TMT. We advise clients on regulatory matters, help shape spectrum policy and develop spectrum strategy, support multi-billion dollar investments, advise on operational performance and develop new business strategies. Such projects result in a depth of knowledge and a range of expertise that sets us apart. We help clients solve their most pressing problems, enabling them to go farther, faster and achieve their commercial objectives. To find out more, please visit www.analysysmason.com/consulting.
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The handset market in Sub-Saharan Africa: trends and forecasts 2012–2017
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