Annual smartphone sales in Africa and the Middle East are expected to grow by a CAGR of 15% to reach 238-million units by 2020, surpassing 204-million unit sales in North America and 201-million unit sales in Latin America.
This is according to a new report, “Operator Strategies to Increase Smartphone Penetration in Africa”, published by Pyramid Research, that provides in-depth insights on a number of smartphone strategies.
Following significant network investments by African operators to capitalise 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.
Operators providing device financing schemes is one of the four direct strategies detailed in the report. In a region characterised 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.
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 (for example, informal sector, independent retailers) rather than directly from operators.
Rahnama states that “by providing OTT localised content, operators can incentivize consumers to purchase smartphones, and in turn increase smartphone penetration on their networks”.