Lewes, DE -- (ReleaseWire) -- 07/25/2014 -- The African region is witnessing one of the strongest increases in mobile data use in the world. Forecasts suggest that mobile internet traffic across Africa will double between 2014 and 2015, and will see a 20-fold increase by the end of the decade. Services based on 3G networks will be dominant within three years, replacing older and more limited 2G technology. By 2020, about three-quarters of all mobile connections will be on 3G or 4G, and thereafter the focus for operators will be on making use of released spectrum to expand the reach of LTE networks beyond the major cities.
This growth in traffic is being spurned on by the maturing social media sector, data-rich applications and mobile video. The region is also hosting a new wave and locally built cheap smartphones which is making such devices more readily available to a larger proportion of the population.
Another key facilitator is mobile banking and m-commerce. Mobile banking has taken root in a number of markets, particularly in Kenya, Nigeria, South Africa, Rwanda and Tanzania. This has supported a fast developing m-commerce sector which is enabling mobile-based transactions, remittances and payments between a growing number of participating banks. Such facilities across borders are making m-commerce a viable international service within the region.
Regulators and governments have encouraged improvements in national backbone networks, as well as international connectivity, to enable operators to increasing traffic volumes as well as customer expectations of a reliable service. These developments are providing the bandwidth needed to connect millions of additional citizens to the internet, while the cost of services has plummeted as networks are no longer constrained by expensive satellite links.
To encourage improved services, quality of service parameters in a number of countries in the region have been tightened during the last two years, which have obliged network operators to upgrade networks and improve services offered.
Broadband based on DSL technology remains limited in most markets, since it is offered by telcos on fixed-line networks which are generally underdeveloped. As such, the future of connectivity for many markets in the region, particularly in rural and semi-urban areas, lies in mobile broadband. The cost of mobile broadband, traditional far more expensive that limited fixed-line alternatives, is being driven down by the combination of network upgrades and the pressure of market competition.
Having introduced HSPA+ technology, in recent years many operators, particularly the main players including Bharti Airtel, Millicom, Etisalat, Orange and MTN, have launched or trialled a number of commercial LTE networks. Various regulators have worked to address the shortfall in available spectrum by enabling spectrum refarming and releasing digital dividend spectrum for mobile broadband.
Given these rapid developments, mobile broadband and data services are beginning to contribute a higher proportion of African cellcos' overall revenue. SMS remains a leading contributor to data revenue, but in coming years operators will expect greater returns from data-rich services carried on upgraded networks.
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