Business | Mobile telecoms in Africa

Digital revolution

Makers of mobile devices see a new growth market

So many ways to get connected these days
|DAR ES SALAAM

So many ways to get connected these days

SUB-SAHARAN Africa has long been deprived of the cornucopia of media enjoyed in richer places. It was not until China began to export $50 black-and-white televisions to Africa about a decade ago that broadcasting took off outside the main cities. That new, much bigger market has led to big changes. Asif Sheikh of A24, an online-news channel in Nairobi, says Kenyan broadcasters have gone from showing almost exclusively Western-made programmes in 2005 to 80% African ones now. Local content is booming in other media too: talk radio, music videos and televangelism have all proved lucrative. But for all types of content, everyone agrees that the next big business opportunity is in mobile devices.

The arrival of three submarine cables to Africa in the past year has quadrupled data speeds and cut prices by 90%. Since mobile-phone coverage is far better than fixed-line availability, the result has been that the cellphone is swiftly becoming Africa's computer of choice. By some counts there are already 84m mobiles in Africa with at least rudimentary internet connectivity. A $90 smartphone made by China's Huawei and running Google's Android operating system sold out in several African countries in less than a month.

Nokia claims a market share of 58% in Africa. The Finnish company ranks with Coca-Cola as the continent's most recognised brand. But recently sales of the company's higher-end phones have collapsed in larger African markets, with Samsung, Huawei and RiM, maker of the BlackBerry, the main beneficiaries. Given that the BlackBerry is priced for big corporate customers, its popularity is remarkable. RiM's head for Africa, Deon Liebenberg, says strong demand has prompted it to rush out more modestly priced consumer models.

Still, it is too early to count Nokia out. Some 90% of mobiles sold in Africa are basic models in which Nokia still dominates. The $30 Nokia 1100 handset remains the Kalashnikov of communication for the poor: 50m of them are in use in Africa. A souped-up version of the 1100, expected soon, will need to offer a better screen, internet connectivity and ideally some access to social-networking sites like Facebook and Twitter, all without sacrificing durability and price. If Nokia can achieve this, it could regain its edge.

For those who want to sell entertainment, however, the future is written on tablets. Here, Samsung has stolen an early lead with its Tab. Though it now costs around $500 in Africa, Erik Hersman, a tech expert in Nairobi, expects its price to fall by half in the coming year. Apple so far shows few signs of bringing the iPad within reach of most Africans. Similarly, RiM says its Playbook tablet computer, due out in Africa in June, is meant to appeal to senior executives and civil servants. Wholesale buyers in Africa think the market will take off once tablets drop below $200.

Nokia refuses to be drawn on whether it will build a tablet equivalent of its rugged 1100 phone. But its head of sales for Africa, Brad Brockhaug, is certain that tablets cheaper than Huawei's $90 Google phone will be commonplace in Africa by 2014. Nokia's boss, Stephen Elop, says the company will invest heavily in customers in Africa and Asia who have a mobile-phone signal but no internet experience. If Nokia dallies it may be left behind by rivals who are already launching cheap tablets.

Whether on mobile phones or tablets, being online is rapidly becoming the norm in Africa. That will boost the continent's information and entertainment business and allow African media houses such as the Nation Media Group (in the east) and Media24 (in the south) to expand their businesses around digital content tailored to local languages and markets. Western content-makers will no doubt worry about the increased risk of piracy, but if they get their offerings right Africa will be a huge new market for their wares too.


Read more about Africa's digital revolution in the latest issue of our sister magazine, Intelligent Life

This article appeared in the Business section of the print edition under the headline "Digital revolution"

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