4G will boost mobile, tablet sales in East Africa

Posted on May 25, 2013 11:09 am

A recent research indicate that a record-high 30 million mobiles and tablets are expected to be sold this year across the East African region. This will be on the back of faster wireless broadband and a tremendous shift in demand to third-generation smartphones that has taken the region of 135 million people by storm. An industry executive I spoke to told me the average annual sales for last year stood at 26 million units. However, despite the boom in smartphones, price competition for the devices and mobile data tariff packages have not been even across the region due to limited 4G Network coverage in some countries like Rwanda and Burundi that continues to lag behind its neighbors. Smartphones will likely account for three quarter of the sales because Tablet market is still small compared to mobile phones. Most handset sales will be part of a demand to 4G smartphones. East African region has over 60 million mobile subscribers, most of them with two or three mobile numbers for smartphones and tablets. The latest data in my possession shows that the overall non-voice market is expected to grow by 40% this year.

The report projects non-voice revenue will grow by 39% this year from 26% last year, accounting for 33% of total revenue. Major telecom companies in the region have mobile data revenues accounting for 40% of their total non-voice revenue with Safaricom in Kenya and Vodacom Tanzania being prime examples. According to another research, the top three mobile data services are Social networking sites, Internet browsing and video streaming. East African region expects to have 50 million mobile Internet users this year, up from 42 million last year. In value terms, the regional mobile market is expected to increase by 16% this year and the overall smartphone market value will increase to 41%. Availability of commercial 4G services offered by MTN in Uganda, Vodacom in Tanzania and Safaricom in Kenya is stimulating demand for smartphones priced from $500 upward, opening up opportunities for international brands. However, the price competition in the region market remains low due to the continued rise in popularity of smartphones among the middle incomer earners who are the main consumers.

Contador Harrison