ICT in Africa smartly does it

ICT in Africa smartly does it

The ICT sector in Africa continues to flourish. Internet and mobile penetration is growing. Dramatic undersea development projects to get Africa connected have been successfully carried out and important connectivity-related infrastructural developments is being put in place. As appetite for the latest ICT products intensifies, the competition to capture a slice of the smartphone market is hotting up. Interest in offering other, more expensive, products like laptops and tablets is also gaining pace while innovation heralds an exciting new chapter for Africa’s ICT industry. Report compiled by Sherelle Jacobs

Experts are upbeat about Africa’s ICT sector. According to Lise Hagan, a research manager at market intelligence firm International Data Corporation (IDC), African ICT sectors have “positive long-term growth prospects” driven “both by external trends in the global economy and internal societal and economic changes”.

“ICT is projected to continue developing, especially in growing economies like Nigeria, Ghana, Kenya, Tanzania, Uganda, and Angola,” Hagan says.

While there is inconsistent growth across different countries, African ICT markets, excluding South Africa, are expected to grow significantly.”

According to IDC, South Africa has the biggest ICT industry on the continent in terms of value – it was worth $13.24bn or 46.5% of the total market in 2012. The ICT sectors in other major African countries such as Nigeria and Kenya were worth $3.82bn in 2012, a figure which is projected to reach $4.94bn by 2017.

Internet penetration is one of the internal factors driving the expansion of ICT sectors in Africa. Overall, internet penetration for the region has climbed to 15.6% according to Internet World Stats, although this remains less than the rest of the world, for which the figure is 37.7%.

In June 2012, there were 167m internet users in Africa. However, penetration levels vary massively. In Cape Verde the figure is nearly a third, and in Kenya and Nigeria around 28%. In Ghana and Angola it hovers around 14%.
However, in Ethiopia and DR Congo, which have the second and third largest populations in sub-Saharan Africa respectively, penetration is negligible at just over a single percent. Overall, a large portion of Africans – 800m – remain without internet access. Only 7% of households have an internet connection.

However, many Africans are accessing the internet via their mobile phones. “Smartphones will be as much of a revolution for internet access in Africa as basic cellphones for voice communications. They will help support and spur growth of the continent’s economy in the years to come,” says Robert Bose, Managing Director for EMEA at BlackBerry. Statistics related to mobile phone usage in Africa are impressive. According to a recent report by the market research firm TNS Global, mobile ownership in Africa is above the global rate of 86% in many key countries: in Côte d’Ivoire it is 93%, in South Africa 90% and Ghana 88%.

Other countries are not far behind. For example, in Nigeria 82% of the population have a mobile phone. In Kenya the figure is 71%. A study by Sony Ericsson in September also revealed that mobile subscriptions in Africa reached 781m in the second quarter of 2013. Regionally, this puts Africa in third position behind Asia Pacific and China.

Figures also reveal that a sizeable number of Africans now own a smartphone, although their popularity varies between countries. South Africans are the most likely to own a smartphone – a third of mobile phone owners have one according to TNS. A quarter of Nigerian mobile users have a smartphone. In other countries the rate is lower but still noticeable: 13% in Kenya and 6% in Tanzania.

As a result of the growing appetite for smartphones in Africa, competition between mobile phone companies to gain a slice of the market is heating up. The biggest players have all started bringing out their latest models.

In September, Nokia launched its Lumia 925 model in East Africa. In the same month, Samsung introduced its Galaxy 3 Note in South Africa. LG, which has a 2% stake in the smartphone market, followed suit by bringing its latest phone, the LG-G2 to East Africa in September. Chinese firm Huawei meanwhile launched the slimmest ever smartphone, the Ascend P6, in Nigeria in the same month.

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Written by African Business Magazine

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