from AKANI CHAUKE in Johannesburg, South Africa
JOHANNESBURG, (CAJ News) – A GLOBAL research and consulting firm is encouraged at the progress made by Africa to accelerate the embracing of fourth-generation of cellular network technology (4G).
The encouragement by Strategy Analytics follows its new wireless market forecasts, at the start of this year, indicating a decline in 2G and 3G networks globally.
These accounted for 46 percent of subscribers at the beginning of 2020 but just 27 percent of revenue globally.
By 2023 that revenue share will have fallen to just 10 percent, with Africa arguably the only significant outlier.
This, according to Strategy Analytics, is a region where countries can have average revenue per user (ARPU) below US$2 and as such having limited room to subsidise user behavior change.
“There are, however, significant developments happening in Africa and other developing regions to accelerate the adoption of 4G services, and some encouraging results from those efforts,” said Philip Kendall, Executive Director of Strategy Analytics.
He was speaking at the recent Huawei Analyst Summit 2020.
Kendall used the example of Airtel Africa’s 4G network expansion and “more for more” data offers hailed for helping with migration to 4G, increasing average data use and data ARPUs significantly.
This has seen the operator record 75 percent of its revenue growth coming from data over the last year.
In March 2020, 4G accounted for 29 percent of its data subscribers (up from 18 percent a year earlier) and for over 60 percent of its data revenue.
Strategy Analytics stated that to drive 4G adoption, operators are also looking beyond manufacture to all elements impacting the cost of handsets.
While subsidies might be limited, the firm is seeing other players willing to subsidize phones.
Low-cost distribution strategies to extend operator reach into more rural communities have shown some effectiveness, such as MTN Nigeria’s asset-light partnership model, leaving partners in the distribution chain to procure and sell devices while MTN focuses on the subscriber identity module (SIM).
Strategy Analytics noted all initiatives being used to increase 4G phone affordability into some of the lowest income segments.
“They are much needed as the value of 2G and 3G networks are increasingly at odds with their demands on costs and resources,” Kendall said.
– CAJ News