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| African telco market has ‘huge potential' |
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| BY RODNEY WEIDEMANN, ITWEB JOURNALIST |
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[Johannesburg, 27 November 2003] -
Africa is a region that telecoms providers will increasingly focus on, as the continent has far more growth potential than the more saturated Western nations.This is the view of Peter Olson, a member of Ericsson's strategy and product management team, who was discussing the evolution and growth of mobile telephony at Ericsson's “Telecoms Evolution for Africa” event, held in Illovo this week.According to Olson, Africa is in a unique position in that it has a far higher penetration of cellular telephony than it does of fixed-line telephony, although this is still far behind the US and Europe, which has approximately 50% and 78% penetration respectively, compared to Africa's 12%.“Service evolution is one of the key drives of mobile growth, because as people become used to a particular service, they demand better and richer services,” says Olson.“Examples of service evolution include issues such as the move from voice communication to video telephony, from SMS to photo or video messaging and even something like the move from ordinary ringtones to polyphonic ones to music downloads.”He says services sometimes take on a life of their own, citing the manner in which SMS communication took off.“When SMS was introduced, we never imagined it would take off – particularly as a preferred communication method among the youth – anywhere close to the way it did, since it was never intended to be the communication tool it has evolved into.”Olson says Ericsson expects mobile subscribers in Africa to more than double inside the next five years, growing from around 28 million subscribers today to around 60 million by 2008.“Africa is very much going to be the focus for telecoms service providers over the next few years, as the potential for revenue growth is huge,” he says.“Of the approximately 440 million people in sub-Saharan Africa, only about 30 million currently have telecoms access, but around 50% of those that are left have some addressable financial means.“Assuming that 25% of those can afford $60 per annum for telecoms services, you have a potential market of around 50 million people, which will be worth $3 billion per annum to whoever provides them with such services.”Related story:
Ericsson expands Africa distribution
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