Africa - The Next Big Market?

[David McNamee]

http://www.thefeature.com/article?articleid=100601

TheFeature has an interesting piece about the growth of mobile communications in Africa. There are a few very interesting statistics provided. Over the last five years, mobile use has grown at a rate of 65% annually. Also, mobile penetration seems very low at only 6%. However, that is more than double the 2.8% penetration of fixed lines. Could Africa be the next boom market for the mobile industry? Disposable income is lower in Africa and that could hurt mobile operators' favorite statistic - average revenue per user (ARPU). Could the potential volume make up for it?

"Any major growth on the continent will have to come on its terms, with prices dropping to meet incomes, and this calls for some serious innovation. In the long run, building out Africa with a modern telecommunications infrastructure is probably worth losing a few margin points."

[David McNamee]

http://www.thefeature.com/article?articleid=100601

TheFeature has an interesting piece about the growth of mobile communications in Africa. There are a few very interesting statistics provided. Over the last five years, mobile use has grown at a rate of 65% annually. Also, mobile penetration seems very low at only 6%. However, that is more than double the 2.8% penetration of fixed lines. Could Africa be the next boom market for the mobile industry? Disposable income is lower in Africa and that could hurt mobile operators' favorite statistic - average revenue per user (ARPU). Could the potential volume make up for it?

"Any major growth on the continent will have to come on its terms, with prices dropping to meet incomes, and this calls for some serious innovation. In the long run, building out Africa with a modern telecommunications infrastructure is probably worth losing a few margin points."

[Jason Dunn]

I definitely think that the sheer volume of buyers could make up for the low ARPU...big market potential there, but stability is necessary for infrastructure, and Africa isn't known for being the most politically stable continent.