Ahead of AfricaCom next week, CEO Rimma Perelmuter looks at the mobile opportunity in Africa. Supported by Basebone, Mahindra Comviva, Infobip and Mozilla, MEF’s fourth annual MEF Connects Africa on November 17th will bring together senior executives and MEF members from both African and global mobile businesses.

The pan-African mobile ecosystem is complex. Whilst the region builds out infrastructure and smartphones take-off, feature phones are still hitting critical mass and offer an immediate opportunity in many diverse local markets. At the same time, the mobile consumer is still in many ways under-served which spells a significant market opportunity for the ever-growing mobile sector.

speech-markSo, whilst Africa is progressing towards a smartphone transition, the mobile ecosystem – which brings together a huge addressable market powered by devices, content stores, and host of consumer and enterprise services – is complex.

Africa as a continent is closing in on its billionth mobile connection, making it rank alongside India, Europe the US and China as one of the biggest mobile markets in the world. For example, in 2002 just eight per cent of the population of Ghana owned a mobile phone. Last year, that figure reached 83 per cent. With 54 countries, an entrepreneurial spirit and insatiable mobile-first appetite, the opportunities for mobile growth and innovation in Africa is unrivalled.

Yet perhaps uniquely, the feature phone (which has simpler technology but is still able to run basic apps and mobile content as well as provide internet connectivity) rather than the smartphone – remains king.

There are of course good reasons why the feature phone prevails, not least because of advances in web browsers that are capable of compressing data and delivering a mobile Internet experience, and, the fact that feature phone handsets are far cheaper and have a superior battery life – ideal if your electricity supply is intermittent.

Whist some analysts predict a steady decline in feature phones as new cheaper smartphones enter the market (IDC predicts that feature phone ownership will fall to 27 per cent by 2019), others argue that given the price (even at $50) and data charges, the smartphone horizon is still some way off.

A study recently published by the Pew Research Centre looked at mobile phone use in seven sub-Saharan African nations finding that, on average, 15 per cent of people living in those countries had a smartphone, while 65 per cent used a feature phone.

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So, whilst Africa is progressing towards a smartphone transition, the mobile ecosystem – which brings together a huge addressable market powered by devices, content stores, and host of consumer and enterprise services – is complex.

Understanding how that complexity will play out and what will ultimately drive value and the adoption of new services for consumers and businesses alike is key to unlocking revenue for home grown African innovators and global players alike.

The obvious poster boy for mobile services in Africa is of course mobile payments, which has grown to become an essential component in accelerating financial inclusion. Crucially mobile money services can run on top of the simpler feature phone operating system by simply sending an SMS message to complete a transaction or send money.

Elsewhere, great strides have been made to use mobile in the fields of mHealth (from simple services like checking whether or not medicines are counterfeit through to tracking the spread of serious diseases like Ebola in Sierra Leone), education, transport, agriculture and more.

Significantly much of the content innovation in these areas has come from disruptive start-ups that have been able to attract funding or secure the services of one of the many incubators that are cropping up throughout the region, often backed by backed by government funds, technology players or as hubs that have grown out of universities in their own right. One study by Pulse.com identifies 100 technology hubs across 31 different African countries for example.

The importance of local cannot be underestimated as home grown content players across the continent invest in popular music, games, video and even religious content to suit local tastes.

Rimma2015Rimma Perelmuter

CEO

MEF

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In terms of content, global players are also increasingly focussing on Africa as a new market, with new content stores giving access to a wealth of premium entertainment and services. What’s interesting is how their approach is again focussed on the realities of the mobile consumer and the nuanced African market where pricing and transparency around the cost of accessing mobile data remains paramount. Savvy content businesses for example are pushing content stores that offer a platform for local providers to monetise their own content (including important components like DRM) rather than simply just offering a broad catalogue of mobile content.

These factors taken together demand an evolved strategic approach. Unpacking the pan-African opportunity means a sharp focus on the context of the mobile consumer and prioritising an approach that accounts for handsets, appropriate content and accessibility. Whilst smartphones and faster networks are marching forward, today’s feature phone content longtail is still very long.

MEF’s fourth annual MEF Connects Africa (November 17th from 7.30PM) will be attended by senior mobile executives and MEF members from both African and global mobile businesses. The event will help facilitate the partnerships that are underpinning growth throughout the African mobile ecosystem. We look forward to seeing many of our members there and accelerating the mobile opportunity.

mef connects africa

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