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Digital services in Africa: New revenue
Informa Telecoms & Media
Data revenues play an increasingly prominent
role in Africa’s growth story
Africa, mobile voice and data revenue
• The story of Africa’s telecoms market
continues to be about growth.
• There were 778 million mobile
subscriptions in Africa at end-June 2013
and ITM forecasts that the continent’s
mobile-subs count will reach one billion
during 2015 and 1.2 billion by end-2018.
• Mobile voice revenues in Africa are
forecasted to continue growing over the
next few years.
• Mobile data usage and revenues are
growing strongly in Africa, and at a faster
rate than voice revenues.
• Annual mobile data revenues on the
continent are forecasted to rise from
US$8.5 billion in 2012 to US$23.2 billion
Non-SMS services will lead the growth in data
revenues in Africa
Africa, SMS and non-SMS data revenue
forecasts, 2012-2018 (US$ million)
• Non-SMS data revenues will grow
strongly and will account for an
increasingly substantial part of data
• ITM is forecasting that non-SMS
mobile data revenues in Africa will
rise from about US$5billion in 2012
to almost US$20 billion in 2018.
• A large part of those non-SMS
revenues will relate to data
• But the rise in data connectivity in
Africa is also creating a platform for
a range of new digital services on
Source: Informa Telecoms & Media
Digital services in Africa: A view from the
Views on the digital service opportunity in
• Are digital services important to the
• 50% of survey respondents
strongly agreed that African
operators should explore
opportunities in digital services
• 49% strongly agreed that African
operators that do not develop
digital services risk being left
• Few respondents thought Africa is
not ready for digital services, or
that African operators should not
venture into this area.
Digital service opportunities in Africa: A view
from the industry
The most important digital services for
generating increased revenues in Africa, now and
in five years
• What does the digital service
opportunity in Africa comprise?
• Mobile-money services ranks first –
it is seen as the most important
category of digital service currently
by 47% of respondents.
• Mobile money is expected to
continue to be the most important
category in five years’ time.
• Social-media is ranked second now
and third in five years’ time.
• E-commerce is expected to become
increasingly important; it is seen as
the second most important category
in five years.
Digital service take-up in South Africa: Consumer
South Africa, mobile service usage,
consumer survey 2013
• Among the most popular data and
digital services in both Nigeria and
South Africa are: e-mail; instant
messaging; browsing the Internet; and
social networking services.
• In South Africa, smartphone users
spend an average of 1.5 hours per
week browsing the Internet and 2.5
hours using social-media services.
• Instant messaging is very popular with
South African smartphone users, who
send an average of 150 instant
messages a week compared with 25
Digital service take-up in Nigeria: Consumer
Nigeria, mobile service usage, consumer
• The survey also revealed significant
use of e-commerce, gaming, music,
video and VoIP services.
• In both Nigeria and South Africa,
smartphone and tablets users carried
out an average of three e-commerce
transactions per week.
• Nigerian tablet users spent an average
of 2.5 hours per week watching
streamed video and two hours per
week listening to streamed music.
• In both Nigeria and South Africa,
smartphone users spent 1.5 hours per
week playing online games while tablet
users spent 2.5 hours per week on
Mobile financial services: Safaricom’s M-Pesa
Safaricom’s M-Pesa revenues, financial
• Safaricom’s M-Pesa, which was
launched in 2007, had 17.1 million
users by March 2013 and contributed
KES21.84 billion (US$252 million) to
Safaricom’s revenues in the 2013
• Safaricom’s revenues from M-Pesa in
the 2013 financial year were up by
29.5% year-on-year and accounted for
18% of the operator’s total revenues
for that year.
• Non-voice services contributed 33% of
Safaricom’s revenues in the 2013
financial year, with M-Pesa accounting
for more than half of those non-voice
revenues, while the rest was split fairly
evenly between SMS, and fixed and
Mobile financial services: Deployments in Africa
• Vodacom Tanzania said it had 4.9 million M-Pesa customers in March 2013
and that M-Pesa accounted for 14.1% of service revenues in year to March
• Most other major operators in Africa have also introduced mobile-money
services. Orange launched Orange Money in Cote D’Ivoire in 2008 and the
service is now offered by a dozen of Orange’s operations in MEA.
• Airtel offers mobile-money services across much of its African footprint
through a partnership with Ecobank.
• Etisalat has launched mobile-money services in a number of its African
operations, including those in Egypt and Nigeria.
• MTN said it had almost 12.1 million mobile-money customers at the end of
June 2013, a year-on-year increase of 64.5%.
• Early in 2013, Millicom unveiled a new strategy based on the growth in digital
services, such as mobile money, in Africa and Latin America. Millicom said
that it expects to make revenues of between US$600 million and US$1 billion
a year from mobile financial services by 2017.
E-commerce: Gaining momentum in Africa
• E-commerce is new to much of subSaharan Africa, but is gaining
momentum, as demonstrated by the
launch and growth of services such
as Jumia and Konga.
• Jumia is a shopping portal that sells
consumer electronics and fashion
goods; it has operations in Cote
D’Ivoire, Egypt, Kenya, Morocco
and Nigeria. Konga is a Nigerian
shopping portal that also focuses on
fashion and electronics.
• Jumia is backed by Rocket Internet,
a Berlin-based incubator, which is
also behind several other ecommerce ventures in Africa.
Jumia Nigeria online shopping service
• Millicom has acquired a 20% stake
in Rocket’s African and LatAm
• Millicom expects its partnership with
Rocket to bring in annual ecommerce revenues of US$1 billion
Digital will re-shape the industry: Survey
Which types of company are/will be the most
influential in the African telecoms industry today
and in five years?
• Operators are seen as the most
important players in the industry
and are expected to retain that role
in five years’ time.
• But operators will see their relative
importance in the industry decline
over the coming five years.
• Operators are the only major
category of player that is expected
to experience a decline in
• Device manufacturers, media
companies and OTT providers are
expected to see notable increases
in their importance in the industry.
• Successful operators will be those
that adapt best to change.
Africa Telecoms Outlook 2014:
Maximizing digital service
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