Channel Post MEA caught up with Sweden-based ICT4D Researcher Johan Hellström and the results of the interview with him very interestingly revealing on the business of Mobile Phones in Africa. See the excerpts…
Names: Johan Hellström
Address: Stockholm, Sweden
Specialty: I am a PhD candidate at Stockholm University, Sweden, where he focuses on ICT-facilitated participation and crowdsourcing in developing contexts. I run a consultancy called Upgraid, which undertakes consultancies in the ICT4D field. See www.upgraid.org for more information and access to reports and research articles.
Mobile phone ownership across Africa is rocketing, what does this exactly mean for vendors and resellers?
What we know for sure is that mobile subscriptions are rocketing – a qualified guess is that subscriber numbers and handset ownership has increased too. But ownership data and statistics is not as accessible, and much more complex to gather, than subscription data given by the operators. That said, available data from customs, shipments etc., all point in one direction – mobile ownership is quickly rising as well. So, with an ever-increasing need of handsets and other mobile devices, there is a great opportunity for vendors and resellers to make a good profit. That is if they can identify the best products for the existing markets and niche segments within, i.e. address the customer need. At the moment there is a craving for affordable smartphones. More advanced phones also require more skills and a renewed need of reliable maintenance and repair shops.
What types of mobile phones are the Africans buying most?
Basic mobile phones still dominate the market but according to market reports and media, Africa is one of the world’s fastest-growing smartphone markets. Smartphone shipments into Africa verify this. And it’s a mix of phones that are sold and bought. From the high end ones like Apple iPhone, Samsung Galaxy and Sony Xperia, to second hand Nokia’s and cheap Chinese brands. There is a clear rise in demand for so called grey-market smartphones that run older versions of Android on cheap, generic hardware.
What are the trends from a research point of view about what is driving mobile phone ownership in Africa?
There are many reasons to the exponential growth in the mobile industry. Historically its been explained by the deregulation of the telecommunication markets. Historic and on-going technology advancement is further leading to decreased costs for underlying technology as well as handsets, making it more affordable for the end user. The want factor is a driver too. People see others with phones, and instant access to Facebook and Premier League results, and want that luxury too. There has also been an increasing demand of value added mobile communication services such as mobile banking and other M4D services and applications driving mobile phone ownership.
What is your prediction about the state of mobile telephony in Africa in the next five years?
There are a number of trends in the mobile market that eventually will bring down both capital expenditure (CAPEX) and operating expenditure (OPEX), including shared infrastructure both in terms of network transmission and mobile towers where companies buy ownership of towers or transmission and operators hire sites/transmission from these companies. This will eventually result in more subscribers, more internet users, more tailored services that address actual needs – more of everything. We will most likely see a lower ARPU and more failures too. That said, failing in ICT4D and M4D is common but necessary. Failure means you dared to take a risk.
What do you think could be the next big driver for mobile/smartphone acquisition in Africa?
Basically three things.
1) Cheaper and customised handsets. This is key. Today, smartphones rely too much on constant internet access for cloud storage and application updates for example; this drains the battery and mobile data costs too much for the end-user. Majority of smartphones are still designed for urban usage, where electricity is reliable and charging facilities many, where handsets can easily be repaired, and where there is free or cheap internet including WIFI. This needs to change to meet the need from the masses. More robust phones with extended battery life, with enough memory and storage in the phone, and that works perfectly fine without constant internet access.
2) Cheap and reliable mobile Internet. The need is there and ever increasing where social networks and media such as Facebook and Twitter are the main drivers. For this to take of the OS needs to be in place too. It will be interesting to see how products like Android One will be received in Africa.
3) Services and applications that address a real need and support everyday life like livelihoods, health, agriculture. We have seen how mobile banking have changed how people save, transfer and transact money in Kenya for example.
From a researchers point of view, what do you see as the most challenging or pressing issues for Africa’s Mobile phones distributors and resellers at the moment?
Besides meeting the demand from existing and potential customers, a real challenge will be to cater for the whole life cycle of the mobile handset. For example, new smartphones require software updates and if something can go wrong it will. The support system, both from a hardware and a software point of view, needs to be there. Finally, what responsibility do distributors and resellers have once the handset is dead and beyond repair? Will there be any recycling system in place? Environmental impacts of the waste, including toxic metals, are and will be a significant concern.
What advice would you give as solution(s) of overcoming those challenges in Africa?
First, stop the import of low quality gadgets. Quality products that last longer might be slightly more expansive in the short run but definitely cheaper in the long run. Mobile phone distributors and resellers must take a bigger responsibility for all stages, especially when the product died. How this should be regulated or addressed is a question for regulators and policymakers.
