Published on 04 February 2013
A mobile service provider similar to the UK’s Everything Everywhere (EE) could emerge in South Africa and Kenya’s telecoms markets in 2013.
This is according to predictions made by International Data Corporation (IDC) in its report, titled the ‘African Telecommunications Market Top 10 Predictions for 2013'.
The report says that Africa's first major consolidation transaction in the telecoms space could occur, similar in model to the UK’s EE.
EE is that country’s largest mobile operator, and was formed through the consolidation of Orange and T-Mobile businesses.
According to Spiwe Chireka, programme manager for telecommunications at the IDC Africa, a new service provider with the same model as EE could be on the horizon for markets such as South Africa or Kenya.
The Communications Commission of Kenya says that from October 2012 to January 2013, the number of mobile subscriptions grew over 2% from 29.7 million to 30.4 million. According to BuddeComm research, South Africa - which has a population of 50 million - has a mobile penetration rate of just over 100%..
The IDC says that companies in the right position to consolidate their operations could stand to gain more customers.
“In our predictions we were saying two large, independently competitive service providers would merge their services in 2013,” explained Chireka.
“The reason I am confident it would work is that in the UK, Orange was number one in the market and T-Mobile was number four, both are part of large global groups and no one thought it would happen. It would be like MTN merging with Telkom,” Chireka added.
Apart from consolidation driven mergers and acquisitions (M&A) activity, the IDC has highlighted nine other predictions for the African telecommunications market: all of which are listed below.
- “The year of the App and Smartphone” – According to the IDC increasing smartphone penetration in 2012 was one of the key drivers of mobile data uptake and usage. The IDC expects that this year smartphone penetration will overtake feature phones in Africa, which will be driven by the growth in mobile apps and content.
- “In 2013 Long Term Evolution (LTE) will gain momentum as a mainstream commercial offering”- The IDC’s initial predictions for mainstream LTE rollouts in Africa were 2014/2015, however telcos across the continent will defy expectations to bring the technology to the masses earlier than expected.
- “Satellite connectivity will remain a force to be reckoned with” – As data usage continues to grow in Africa, the IDC expects service providers would achieve bandwidth provision with an intensified and continued use of satellite technology.
- “Rural connectivity will become an emerging reality” - With the emergence of customised solutions for rural connectivity from the likes of Cisco and Connect Africa, rural communications could become an emerging reality in 2013.
- “WiFi will emerge as a viable complementary offering to 3G and LTE” – As a result of exponential demand for connectivity to 3G services and struggles by service providers to meet this demand, will result in services providers offloading most of their 3G subscribers onto WiFi networks.
- “The enterprise sector will become more delineated, with providers increasingly focused on the small and medium enterprise (SME) segment” - With the saturation of the consumer segment and a crowded services provider market for large enterprises, smart market segmentation and product targeting for the SME segment is expected.
- “Mobile Virtual Network Operator (MVNO) will emerge from the retail and finance verticals in South Africa” – In 2013 it’s expected that at least one mobile network operator in SA would approach non-telecommunications companies such as banks and retailers to establish an MVNO.
- “Enterprise mobility services providers' and vendors' solutions will improve in 2013” – The IDC expects intense activity in the drive for enterprise mobility in Africa in 2013.
- "Providers’ enterprise mobility solutions will improve, leading to increased uptake" - The IDC expects the proliferation of emerging market smart devices – as seen with mobile handsets – as part of the effort by organisations to penetrate the enterprise mobility market in the Africa network