The Nigerian and South African telecommunications markets will maintain tempo of their developments, regrettably, not for consumer services, according to experts findings.
Historically, Nigeria and South Africa have been identified as two of the most lucrative markets by companies looking for a launch pad into Africa, the report by the International Data Corporation (IDC) observed.
Also, Nigeria has been favored for its high growth potential, while South Africa has been considered to possess a sound and effective business environment.
However, Nigeria is plagued by numerous challenges, including poor infrastructure (which often results in very high operating costs), and ineffective private and public business systems that generally create a challenging operating environment.
Presenting its outlook for the African telecommunications market in 2014, International Data Corporation (IDC) predicted a wave of growth in digital and media content over the coming 12 months as smartphone ownership explodes and African telecom users become more sophisticated in their use of mobile applications.
The global research and market advisory firm also indentified the ongoing, rapid deployment of 3G networks across the continent and the fledgling expansion of LTE services as key drivers of this growth in content.
“African telecom service providers are intensifying their efforts to develop their own application stores and generate local content, with smartphone shipments up more than 40% year on year in 2013,” said Spiwe Chireka, program manager for telecommunications and media at IDC Africa.
“These developments, coupled with the growth in mobile data consumption through smart devices, are setting the scene for the spread and use of smartphones and mobile applications in 2014. Last year marked a turning point for LTE networks in Africa, with the number of commercial deployments in the region increasing to 20, up from 4 in 2012. As a result of this accelerated growth, services such as enterprise mobility are set to become more and more commonplace in the year ahead.”
But the report contained that the cost of doing business continues to escalate, and with ongoing political instability and an aggressive regulator demanding lower termination costs and improved customer service without releasing the required spectrum, market complexities continue to escalate in the country.
IDC said: “Indeed, operators that have braved the market, such as MTN and Airtel, are starting to feel the negative effects of doing business in such a constrained environment. South Africa, on the other hand, is generally more of an unregulated oligopoly.
“Operators that entered the market post-2005 have struggled and, in IDC’s opinion, will continue to struggle to gain a notable foothold in the market for the foreseeable future. There is also no indication that the status quo will noticeably change in the short term. However, when evaluating the enterprise segment in South Africa and Nigeria, the above challenges appear minimized. Global multinational corporations (MNCs) still maintain a presence in these countries, and in terms of the local enterprise segments, these countries hold significant revenue potential for established MNCs.
In other predictions by IDC noted that, although, enterprise mobility holds promise, but Strong growth is yet to materialize.
Thus, despite the publicity surrounding enterprise mobility, IDC does not expect the uptake of such services to take off significantly during 2014, at least where mobile service providers in the African market are concerned.
Current IDC research indicates that the key issues affecting enterprise mobility adoption in the region relate to the cost of deploying these services and the quality of local connectivity.
Despite the growth in 3G deployments and commercial LTE services in the region, the coverage of these networks is relatively limited, and the quality of networks is not up to the standards required for enterprise-grade connectivity.
Furthermore, mobile data costs in Africa remain relatively high, which has created legitimate concerns around the cost of implementing enterprise mobility solutions within end-user organizations.