African mobile market grows, margins shrink

The continued development of telecommunication on the African continent is vital to the social and economic growth of the region. In 2011 and beyond, operators will be looking to increase the number of subscribers, reduce costs, increase the Average Revenue Per User (ARPU) and reduce churn. These have been the goals of operators ever since mobile organizations came into being.

The challenge is to meet the requirement to monetize booming data services despite rising network costs and lower margins in the increasingly competitive market. New international operators are entering the market, bringing with them new and innovative solutions. Calls are still generating a lot of revenue for operators, but with the increased usage of smartphones and tablets, data is becoming ever more important. The data explosion is starting to have a negative impact on the networks. Operators are in the dilemma of how to provide priority services to their key users. Network management will be vital; understanding who is using the network, what they are using it for and then having the ability to enforce policies on the networks will become a necessity. The use of such technology will mean that operators can focus their network expansion on areas of greatest need.

According to leading analysts, the total number of mobile connections in Africa overtook Western Europe during the last quarter of 2010. This means Africa experienced a rise in connections by twenty percent in that period of time. At the same time, the ARPU declined by more than three percent in Africa. On average, the monthly mobile ARPU in Africa was $10 for Q4 of last year.
Africa will continue to face great challenges in the future, but will always rise to meet them by providing solutions that meet the unique requirements.

By Angela Meadon