By 2020, Pyramid Research forecasts annual smartphone sales in Africa and the Middle East to grow by a CAGR of 15.0% to reach 238 million units, surpassing 204 million unit sales in North America and 201 million unit sales in Latin America.
(TOP: Models display Lenovo smartphones. A new report by Pyramid Research notes that Africa’s MNOs need to consider device financing schemes using mobile money to boost smartphone uptake).
Following significant network investments by African operators to capitalize on the rising demand for data services, operators are increasingly becoming concerned with increasing the number of smartphone users on their networks. Strategies highlighted within the report will help operators boost mobile data revenues and ensure competitiveness in terms of service innovations in the long-run.
Device financing – a direct approach to boosting smartphone usage
Operators providing device financing schemes is one of the four direct strategies detailed in the report. In a region characterized by low income levels, smartphone prices can be prohibitively expensive. To overcome this, African operators have partnered with banks to address this barrier to purchasing smartphones, such as Tigo Ghana’s partnership with Stanbic Bank to provide financing schemes for the Samsung Galaxy range of devices. “However, a key limitation is the large unbanked population in Africa. To overcome this, operators need to consider financing schemes using mobile money,” says Mak Rahnama, Senior Analyst at Pyramid Research.
It is not just about just selling more devices
Indirect strategies, which focus on increasing mobile data usage to drive smartphone adoption, are also found to be essential given the majority of consumers in African markets purchase their devices from various retail channels (e.g. informal sector, independent retailers) rather than directly from operators. Rahnama states that “by providing OTT localized content, operators can incentivize consumers to purchase smartphones, and in-turn increase smartphone penetration on their networks.” The report provides an in-depth analysis of three indirect strategies that operators can deploy to boost smartphone usage on their networks.
Pyramid Research‘s analysis is positioned at the intersection of emerging markets, emerging technologies and emerging business models, examining the performance, technology trends and macroeconomic and regulatory environment of service providers and equipment vendors in more than 100 countries.