GSM Association (GSMA), the group representing the interest of the mobile industry, has forecast that Africa will experience over 50% increase in Smartphone adoption by 2020.
[quote font=”georgia” font_size=”22″ font_style=”italic” align=”left” arrow=”yes”]According to GSMA, the increase in smartphone adoption will have a mixed implication for telecom operators as higher sales would be made on data, but there would be reduction in voice calls and SMS, as many subscribers would prefer to use data for communication than making calls.[/quote]‘Global Mobile Trends’ published by the mobile industry group reveals that though smartphone adoption in the region currently remains low, it will increase to more than 50% by 2020 as a result of falling device costs.
According to GSMA, the increase in smartphone adoption will have a mixed implication for telecom operators as higher sales would be made on data, but there would be reduction in voice calls and SMS, as many subscribers would prefer to use data for communication than making calls.
“For operators, the implications are mixed. Higher smartphone penetration translates into higher data usage, which should be positive for revenue growth. However, internet consumers are increasingly using Over The Top(OTT) messaging apps. This will place added importance on bundled data pricing to mitigate direct impacts on lower use of SMS and potentially voice,” the mobile adoption trend report says.
The report also shows that penetration of the 4th Generation (4G) Long-Term Evolution (LTE) in Africa is very slow, with only 1% penetration so far, and forecast that it will only grow to 7% by 2020.
“4G remains more of a future proposition. There are now 74 live LTE networks across 32 countries in Africa but penetration is just 1% and our expectation is 7% by 2020. Limited coverage, lack of devices at affordable price points and, in some cases, a lack of low-frequency spectrum are all factors hindering growth,” the report notes.
This slow penetration is largely a result of the challenging network economics in rural and remote areas. Also contributing to the slow penetration of the 4G LTE are recent macro weakness and currency devaluations, since capex budgets tend to be denominated in dollars or euros, making the expansion efforts more expensive, according to the report.