Posts tagged ‘revenue’

Revenue Potential for LTE networks – Interview with Du’s Senior Director, Enterprise Business Commercial

Imran Malik, Senior Director – Enterprise Business Commercial at du

Imran Malik, Senior Director – Enterprise Business Commercial at du

MENA is a huge and extremely diverse region of 23 countries that form part of the broader EMEA categorization. In the past 10 years, economic growth in MENA has been two to five times that in Western Europe and this means the cellular-enabled devices market is poised for continued growth.

Ahead of the LTE MENA conference in Dubai this May, I caught up regional expert and speaker at this year’s conference Imran Malik, Senior Director – Enterprise Business Commercial at du, to discuss his opinions on the region’s continued growth and the new services that offer the most potential to boost operator revenues.

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LTE in Africa – Different Dimensions

Mauro Fondacaro, Sales Manager IPX, SAP Mobile Services

Mauro Fondacaro, Sales Manager IPX, SAP Mobile Services

This post is by Mauro Fondacaro, Sales Manager IPX, SAP Mobile Services.

Africa is a varied continent and the first few countries and operators that have launched or are testing LTE in Africa provide a variety of reasons to do so. Beginning with the obvious choice, South Africa, three key operators have launched LTE in the country. MTN, Cell C and Vodacom have all launched FDD-LTE networks in bands ready for LTE roaming.

South Africa has a mature telecom market with the highest ARPU among all African countries and is an expected choice to launch LTE. With reduced profit potential from core services, operators here are looking to push profitability through high speed data services.

 Country Operator Frequency Status
Angola Movicel 1800 MHz Live
Mauritius Orange 1800 MHz Live
Mauritius EMTEL 1800 MHz Live
Namibia MTC 1800 MHz Live
South Africa Cell C Live
South Africa MTN 1800 MHz Live
South Africa Vodacom 1800 MHz Live
Tanzania Smile 800 MHz Live
Uganda Smile 800 MHz Live

But, it’s not all about South Africa; the small island country, Mauritius which has a population of 1.2 million is also one of the first few to launch LTE. Country’s mobile operators as the economy run on tourism. Tourism contributes about 10 per cent to the country’s GDP and an astounding one million tourists are expected to visit Mauritius in 2013. Here, the evolution into LTE is not driven by the need for speed, but rather by the need to support LTE roaming customers.

Angola, Tanzania and Uganda have also launched LTE, and it would be relevant to highlight the penetration of fixed-line broadband in these countries- just 0.12%, 0.007% and 0.25% respectively, thanks to the lack of high capacity backbone infrastructure. Here, many mobile operators are jumping straight from GPRS to LTE, enabling a greater leap in data speed and some plan to evolve the parallel technology standard, WiMax to LTE thus making LTE the default broadband option in the region.

Fixed broadband penetration in these countries is very low and enabling data connectivity through LTE would give the subscribers immense economic opportunity. Operators understand the value of mobile broadband and are trying to shift the perception of mobile phone from something that lets you talk to a device to something that lets you connect to internet. For example, scratch cards that subscribers use to recharge their phone have started displaying their value in terms of data rather than voice.

ARPU in Africa is about $4-6 and data revenue contribution is even lower. Purchasing power apparently appears to be a big barrier to break in these markets, but in my opinion it’s about the value of the service and I would say that subscribers in emerging markets pay more than developed market subscribers. For example, a Kenyan operator’s ARPU is about 7 per cent of average income, whereas an American operator’s ARPU is about 0.2 per cent of average income. As African market players have leapfrogged the entry barrier to drive mobile penetration in spite of many odds, they can also leapfrog the LTE entry barrier.

SAP are exhibiting next week at the LTE Africa conference, taking place on the 9th-10th July 2013 in Cape Town, South Africa. Click here to download the brochure for the event.

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