Africa's telecoms market is forecast to grow at the fastest rate globally over the next five years, with increasing revenues and a greater proportion of earnings from mobile data.
The Sub-Saharan Africa telecoms market: trends and forecasts 2013–2018 report from telecoms specialist Analysys Mason predicts service revenue for telecoms in Sub-Saharan Africa will display a compound annual growth rate (CAGR) of 6%, increasing from $49 billion last year to $65 billion in 2018.
Analysys Mason also predicts Africa's telecoms market will undergo a transition, with revenue from mobile data services increasingly matching mobile voice revenue. During the period in question, mobile data revenue is predicted to grow at a 6.7% CAGR compared to just one 1% for fixed services.
This growth is attributed to increased 3G coverage and capacity, alongside the widespread introduction of low-cost smartphones. The company also points to the "related key driver" of adjacent digital economy offerings such as mobile financial services, which are seeing increasing take-up.
"SSA's telecoms market is growing faster than that of any other region, and will increase its share of worldwide telecoms revenue over the next 5 years, although this will still remain small compared with other regions," Analysys Mason's regional analyst Mpho Moyo said.
The share of the global telecoms market accounted for by Sub-Saharan Africa, which stood at 2.9% in 2013, will increase to 3.6% by 2018.
This growth will be primarily driven by mobile services, according to the report, with revenue from such services predicted to increase to 89.4% of total revenues in 2018 compared to 86.5% in 2013.
"Mobile voice and handset data revenue will together deliver 90% of the total telecoms revenue growth in the region in the next 5 years," the report said.
In predicting the growth of mobile data on the continent, Analysys Mason is echoing a number of other analyst reports in the past few months.
In February, Cisco released its "Global Mobile Data Traffic Forecast Update, 2012–2017", which forecast the Middle East and Africa (MEA) would experience the highest mobile data traffic growth rates globally until 2017, with growth of 77%.
In January, Pyramid Research predicted South Africa's mobile data revenue would surpass $5 billion in 2018, up from $2.8 billion in revenues in 2011, with the company attributing the growth to LTE rollouts, network investments and undersea cables.
"Mobile growth is coming in part from expanded penetration of mobile services generally. Mobile penetration of population was still below 80% in most countries in SSA in 2013, with the exception of Ghana and South Africa," said Analysys Mason.
"Mobile voice will continue to be the largest component of the telecoms market through 2018, as new subscribers, new market entrants and mobile termination rate (MTR) reductions drive price competition and increased traffic."
The report, however, said mobile data revenue would grow far faster than mobile voice revenue - at a five-year CAGR of 19.6% compared with 4.7% for voice.
"Mobile handset data's share of total telecoms revenue will almost double by 2018, reflecting the role of mobile devices as the main internet access point for most users in Africa."
This growth, the report said, is underpinned by increased penetration of smartphones in the region, which will more than double from 12% of handsets in 2013 to 26% in 2018.
Report co-author Alexandra Rehak said: "Under-penetration of fixed and mobile data services in SSA represents a major growth opportunity for service providers and other market players, as does the growing demand for value-added digital economy offerings such as mobile financial services. However, affordability, coverage and effective regulatory and market structures remain major challenges for successful telecoms development in Africa."
