Closing the usage gap
The GSMA report on the state of mobile connectivity in 2019 showed that, despite 70% of the population in SSA being covered by mobile internet services, only 24% of the population was using them. The remaining 46%, referred to as the usage gap, comprised the population that was within proximity to a mobile broadband connection, but was not using the internet. The key enablers to improving mobile data usage, aside from infrastructure, are affordability, consumer readiness and content.
Data costs in Africa will fall rapidly in the next decade
Working with an affordability target of 2% of monthly income, the cost of 1GB of mobile data in SSA was at 6.8% in 2018. Although this was an improvement from 13% in 2016, it is still a long way from the 0.5% of monthly income in developed countries. Moreover, the cost of an internet device in SSA is at 69% of monthly income, compared with developed countries, which predominantly have staggered payments for smartphone devices.
We extrapolate the lack of affordability into the media space: Dataxis research shows that in 2018 only 13% of households had Pay TV, compared with 45% mobile penetration in SSA. The cost of an internet mobile device is US$35-40, while the cost to start a PayTV subscription could be as high as US$100 per month.
TVs to start gathering dust
Mobile phone usage in the US will soon outpace time spent watching TV. The advent of video-on-demand services such as Netflix along with smartphone capabilities such as casting is seeing an increase in the usage of mobile phones to consume content, especially in the 16-34 age bracket.
Ericsson estimates that the average smartphone data usage per month is 3GB. With most countries in SSA barely crossing the 1GB mark, we postulate that video consumption will be the next frontier to expand data usage.
The video-on-demand offerings are beginning to take shape with Safaricom partnering with iFlix (Kwese in Africa) and Showmax (MultiChoice group, a Naspers spinoff), Viusasa (owned by Kenyan media company Royal Media) and Startimes (Chinese-owned). Monthly subscriptions are as low as US$3 per month compared with an average US$10 per month for a similar selection of channels on PayTV.
Read our full 2020s Vision: 20 themes for the next decade report.