Africa’s greater access to technology, better bandwidth and increasing government effort to provide the right regulatory environment and policy has been also been accompanied by the proliferation of a range of innovative applications. Helping this is the increasing number of incubators created to spur innovative applications adapted to local needs.
One of the many is mLab, a regional lab for mobile technology entrepreneurs, which opened its doors last September in South Africa. With financial support from the Department of Science and Technology and infoDev, a World Bank Group global programme, the lab will offer entrepreneurs unique access to a talented pool of expertise and vital connections to the rest of Africa.
The banking sector is also feeling the need to keep up with the technology bandwagon, as it rethinks its strategies using tools such as cloud computing, offering a greater range of user interfaces, including the internet, mobile phone and call centres. M-banking is a irrefutable success in Africa and is expected to grow into a $22bn industry by 2015.
Greater bandwidth is at the core of the IT boom and this would not have been possible without the arrival of undersea cables connecting the continent. A single undersea cable provides the equivalent capacity of all satellites put together globally.
The price of bandwidth is also dropping, partly due to a drop in the wholesale prices of international fibre-optic cables, with the average cost to Seacom, TEAMS and EASSy, over the last two years falling to $46,000 per km. This has persuaded governments to urge telecom operators to decrease their charges. Telecom operators are also investing in fibre-optic cables, with South Africa KDN, Telkom Kenya, AccessKenya and Jamii Telecoms having already invested heavily in the infrastructure.
World Bank figures demonstrate the internet’s substantial economic impact, with every increase of 10% in broadband penetration capable of lifting economic growth by around 0.73% on average in African economies.
Standard Bank’s report Africa Macro Insight and Strategy, points out that internet usage in Africa grew by a remarkable 2,527% between 2000 and 2011, compared to a worldwide average of 480%. Connectivity has also dramatically improved, with bandwidth increasing 120 times to over 10 Tbp/ss since 2008. There are currently around 120m internet users in Africa. The report also points to the growing number of Africans embracing social media. Africa is one of Facebook’s fastest-growing markets with around 32m users. Around 27% of all African internet users already have a profile on Facebook, compared to 18% in Asia.
But according to Carlo D’Asaro Biondo, Google’s vice-president, Africa only has one web domain for every 10,000 people, compared to a global average of 94. Part of the problem is the lack of relevant African online content. Google is creating unique search engines and online content in African languages including Swahili, Shona, Ndebele and Zulu.
Internet World Statistics estimate that 11.4% of Africa’s population are internet users, versus a world average of 30.2%. Africa is still lagging behind, but it is also indicates the enormous growth prospects for ICT companies.
Lucrative smartphone market
The introduction of 3G by some operators is a key development, offering a new range of possibilities. The demand is clearly seen through rapid industry growth, and the fact that certain operators are already moving quickly to introduce 4G. With connection through a laptop still not readily available everywhere in Africa, smartphones are important products, offering many a unique chance to access the internet despite infrastructure constraints.
Google has announced its plans to sell a smartphone at less than $80, a price lower than the market average. Other competitors are selling smartphones, but whether it be Nokia, Apple, LG or Samsung, these phones still currently range in price from $90 to $800 in Africa. “When you look at disposable income in Africa compared to that in Europe, the price [of smartphones] in Africa today is 100 times more. So it’s not surprising that the uptake of smartphones in Europe is taking off, and not in Africa,” states Nelson Mattos, Google’s vice-president for the EMEA region.
Yet smartphones are well tailored for the African population and these lucrative opportunities mean that many are fighting for a piece of this market. Research in Motion (RIM), who produce the famous BlackBerry handsets, released a study predicting that there will be 265m broadband subscriptions in Africa by 2015, a huge increase from the current 12m. This means that more than 800m mobile users in Africa will be using mobile technologies by 2015.
RIM is moving aggressively into the African market to offer a range of solutions (smartphones, tablets and the BlackBerry Internet Service) for customers. BlackBerry devices are already available in 35 African countries, via over 80 mobile operators. AdMob, a Google-owned mobile advertising company, reported that the mobile internet market will see strong growth across the continent, with an 81% growth in traffic during 2010 alone. Three very strong markets accounted for more than half AdMob’s advertising requests in December 2010 – Nigeria (21%), South Africa (21%) and Egypt (12%).
In telecoms, Africa remains largely a prepaid market: the winning solution is to tap into this and offer mobile data as prepaid top-ups. Safaricom in Kenya and Econet in Zimbabwe have benefited from pricing that address this core market. Africa’s ICT sector has come a long way: we have seen the most growth in the mobile market. Fixed-line penetration increased from 1.4 subscribers per 100 in 2000 to 1.5 in 2007 and decreased to 1.4 in 2008 – we can see why mobile phones are leading the tech revolution.