Southern African mobile market earns revenues of $18.5 billion in 2010

Mobile communications markets in Southern Africa are experiencing high growth,
particularly in Zambia. However, operators face challenges such as rising
operational costs, declining interconnection charges and capital-intensive
infrastructure investments, according to Frost & Sullivan.

The deployment of cost-effective mobile technologies such as HSxPA, EDGE, HSPA+
as well as WiMAX in the near future will help operators to overcome such
challenges and achieve economies of scale. South Africa is the leading market
in the region in terms of subscribers and revenues, and the market growth is
expected to be driven by data services, as well as enterprise solutions.

According to Frost & Sullivan,
the Southern African mobile communications market (covering South Africa,
Zambia and other countries) earned revenues of $18.58 billion in 2010 and
estimates this to reach $25.43 billion in 2017.

Mobile broadband internet services paralleled by WiMAX technology will boost
market prospects.

“Mobile broadband is an effective means to improve the connectivity of
Internet services in the rural area due to the lack of fixed-line (copper and
fibre) infrastructure,” said Jiaqi Sun, ICT research analyst, Frost &

“The maturing standards of WiMAX technology may help operators achieve a
cost-efficient deployment of next generation mobile technologies since it
allows an increasing coverage for the limited amount of spectrum available for
each operator and supports high-speed mobile data services,” Sun added.

However, the market continues to confront a range of challenges. These include
slow regulatory reform and low network coverage in the rural mass market. At
the same time, low literacy levels are restraining the demand for data

Regulations in the Southern African region have not yet kept pace with
technological advancements such as the WiMAX spectrum allocation. For instance,
a new regulatory framework covering unified/converged licensing has not yet
been set up in many countries in the region.

Another potential threat to market momentum is that the mobile network coverage
remains very limited in the rural area, where over 60.0 percent of the mass
market resides.

Literacy levels in the Southern African region are low. This constrains the
uptake of data services as most data services are not yet offered in a
user-friendly mode on mobile devices.

Promisingly, efforts are being made to address these challenges. Before WiMAX
regulations are finalised, operators have developed the strategy to deploy
similar technologies such as HSxPA and HSPA+, which will be compatible with the
other 4G technologies, such as long term evolution (LTE), for migration in the
future when the converged licensing framework is in place.

Fixed-wireless and fibre-optic technologies are alternatives to improve the
access to telecommunications in the rural area. Leading operators in the region
have engaged in offering community phones which are seen as a substitute for
mobile handsets at present.

Strategies to improve literacy levels include training offered by operators to
educate mobile subscribers on how to use handsets to access data services, such
as mobile money transfer services.

By Team
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