COMMUNICATION SERVICES IN SUB-SAHARAN AFRICA: TRENDS AND FORECASTS 2016-2021 - analysysmason.com - Analysys Mason
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Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
RESEARCH FORECAST REPORT
COMMUNICATION SERVICES IN SUB-SAHARAN AFRICA:
TRENDS AND FORECASTS 2016–2021
STEPHEN SALE AND KARIM YAICI
analysysmason.com
© Analysys Mason Limited 2016
Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
About this report
This report provides an outlook on the mobile communication GEOGR APH IC AL COVER AG E KEY METR ICS
services market in the Sub-Saharan Africa (SSA) region. It provides
forecasts for voice and messaging services provided by both Regions covered in this report: Non-operator/OTT services
mobile network operators and OTT1 providers. Worldwide Voice and messaging
SSA region Active users by device type
A complete set of forecast results is provided in the accompanying
Ghana Outgoing traffic by device
Excel data annex.
Kenya type
The forecast is based on several sources: Nigeria Operator traditional services
South Africa Handsets
Analysys Mason’s internal research, including our regional
forecasts, Connected Consumer surveys and various trackers in Circuit-switched (CS) voice
and SMS
the Future Comms and Media research programme Forecast results provided in the
data annex: Outgoing traffic
interviews with stakeholders in the communications market Operator IP-based services
Worldwide
around the world. Active users by service type
SSA region
Ghana VoLTE, Wi-Fi calling, IP
WHO SHOULD R EAD T HIS R EPOR T messaging
Kenya
Strategy and planning executives who are responsible for mobile Outgoing traffic by service
Nigeria type
operators’ communication services strategies and partnerships with OTT
players. South Africa VoLTE, Wi-Fi calling, IP
Executives in mobile operators’ technology and innovations teams who Rest of SSA region messaging
are responsible for developing communication services. Retail revenue
Marketing executives at vendors of communication services equipment Voice and messaging
and software, as it will help them understand the needs of their operator Average spend per user
customers and size the addressable market for their products.
1 The term ‘over-the-top’ is used throughout this report to refer to services that are made available
to the general public via the public Internet. The term is defined from the perspective of network
operators and is somewhat controversial for this reason, but is nevertheless widely understood.
© Analysys Mason Limited 2016 2
Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
Contents
5. Executive summary 16. Regional trends
6. Executive summary 17. Sub-Saharan Africa: Social and messaging services will continue to be an
important driver of growth for operators
7. Worldwide trends
18. Sub-Saharan Africa: Operators will continue to benefit from strong growth in
8. Worldwide: Messaging apps have overtaken SMS in traffic – over 11 trillion
mobile voice
messages were sent through apps in 2015
19. Country-level trends
9. Worldwide: OTT messaging services will be used by over 60% of the
population by 2021 20. Ghana: SMS is still growing, but will be substituted by OTT messaging as
smartphone penetration increases
10. Worldwide: The platform proposition advanced by LINE and WeChat is
spreading beyond core Asian markets 21. Kenya: Airtel is second in terms of subscribers and is offering social media
bundles to drive mobile data adoption
11. Worldwide: Smartphones will continue to be the dominant communication
device 22. Nigeria: Most operators are pushing social media bundles; LTE is still at the
trial stage, so IP transformation is distant
12. Worldwide: Strategic responses from operators vary markedly in different
regions 23. South Africa: Cell C has been vigorously pursuing the youth market with a
WhatsApp promotion
13. Worldwide: Operators are migrating smartphone users to VoLTE services –
nearly 2.4 billion subscribers are expected by 2021 24. Forecast methodology and assumptions
14. Worldwide: Many operators are rolling out Wi-Fi calling, principally to 25. Forecast outputs and definitions
improve indoor coverage
26. Forecast methodology
15. Worldwide: Google’s involvement may boost Rich Communications
27. About the authors and Analysys Mason
Services, but usage is likely to remain low
28. About the authors
29. Analysys Mason’s consulting and research are uniquely positioned
© Analysys Mason Limited 2016 3
Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
List of figures
Figure 1: Messaging traffic, Sub-Saharan Africa, 2010–2021 Figure 10: Wi-Fi calling service users and traffic worldwide, 2015–2021
Figure 2: Mobile voice traffic, Sub-Saharan Africa, 2010–2021 Figure 11: Traffic for all mobile operator messaging services and number of
operator-provided IP messaging service users worldwide, 2015–2021
Figure 3: Messages sent by message type worldwide, 2010–2015
Figure 12: Messaging traffic, Sub-Saharan Africa, 2010–2021
Figure 4: Messages sent by message type and number of OTT messaging active
users worldwide, 2010–2021 Figure 13: Mobile voice traffic, Sub-Saharan Africa, 2010–2021
Figure 5: Percentage of OTT messaging users by device worldwide, 2010–2021 Figure 14: Messaging traffic by message type, Ghana, 2010–2021
Figure 6: Percentage of OTT voice users by device worldwide, 2010–2021 Figure 15: Messaging traffic by message type, Kenya, 2010–2021
Figure 7: Retail revenue for operator mobile voice services worldwide , 2015– Figure 16: Messaging traffic by message type, Nigeria, 2010–2021
2021
Figure 17: Messaging traffic by message type, South Africa, 2010–2021
Figure 8: Retail revenue for SMS services worldwide, 2015–2021
Figure 18: Overview of the main forecast outputs
Figure 9: Active users of VoLTE services by region, 2015–2021
Figure 19: Overview of the forecast methodology used in this report
© Analysys Mason Limited 2016 4Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
Worldwide: Messaging apps have overtaken SMS in traffic –
over 11 trillion messages were sent through apps in 2015
Several messaging apps have user bases in the hundreds of Figure 3: Messages sent by message type worldwide, 2010–2015
millions. High usage levels have resulted in these apps rapidly
overtaking SMS in volume of messages sent. 14 000
User base in 2015
WhatsApp is the largest messaging service in the world – it 2.3 billion individual app users 11 641
reached a billion active users in February 2016. Several other 12 000 billion
6.6 billion handsets
services have huge user bases: for example, Facebook Messenger
had 900 million active users at the end of April 2016 and WeChat
had 597 million at the end of 2015. 10 000
Messages sent (billion)
Users very often have multiple apps. We estimate a global average
of 1.9 apps per person in 2015. There were around 2.3 billion 8 000
8 470
individual users of messaging services worldwide at the end of
billion
2015, with nearly 2 billion of them on smartphones.
6 000
These applications have driven high levels of usage by offering a
strong user experience, typically with no charge. WhatsApp
reported a peak of 42 billion messages sent over a 24-hour period 4 000
in February 2016. We estimate average app usage to be much
lower, but still over 500 messages per month.1
2 000
Traditional operator services benefit from a larger addressable
market, but have a relatively poor user experience and much lower
average usage levels. The average smartphone user sent 132
SMS messages per month in 2015. 2010 2011 2012 2013 2014 2015
1 There are several factors that prevent us from simply extrapolating from WhatsApp’s usage (which SMS OTT/Non-operator IP
would imply average usage of >1000 messages per month). First, WhatsApp reports peak, not
average, volumes. Second, usage levels of other popular apps are typically much lower than those Source: Analysys Mason
of WhatsApp. Finally, some traffic will be caused by spambots and application-to-person services.
© Analysys Mason Limited 2016 8Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
Ghana: SMS is still growing, but will be substituted by OTT
messaging as smartphone penetration increases
Usage of SMS services is still increasing in Ghana, similarly to
FORECAST METRICS 2021
many other countries in SSA. This is supported by a growing
mobile subscriber base, keen to use basic mobile communication
services, as well as by continued use of SMS/USSD applications,
such as Airtel’s DOTGO SMS browsing service and Wikipedia SMS.
We expect average SMS usage to continue increasing until 2018
and then to decline as mobile data services begin to substitute
usage.
74% 13%
35
BILLION
56%Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
CONTENTS
EXECUTIVE SUMMARY
WORLDWIDE TRENDS
REGIONAL TRENDS
COUNTRY-LEVEL TRENDS
GHANA
KENYA
NIGERIA
SOUTH AFRICA
FORECAST METHODOLOGY AND ASSUMPTIONS
ABOUT THE AUTHORS AND ANALYSYS MASON
© Analysys Mason Limited 2016 27Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
About the authors
Stephen Sale (Research Director) oversees Analysys Mason's consumer research and is also the lead analyst for the Future Comms and
Media research programme. His primary areas of specialisation include next-generation communication services, OTT player strategies and
mobile pricing. He also has extensive experience in analysing operator strategies and forecasting fixed and mobile service markets. Before
joining Analysys Mason in 2004, Stephen worked in the industry on areas that include VoIP, next-generation service architecture and broadband
access. He has a degree in economics and an interdisciplinary MRes from the University of London.
Karim Yaici (Senior Analyst) leads Analysys Mason’s The Middle East and Africa regional research programme. His primary areas of
specialisation include operators' digital strategies, new telecoms opportunities and challenges, and consumer trends in growth markets. Prior to
joining Analysys Mason, Karim was an associate analyst at Ovum, where he authored reports on mobile accessories and mobile applications.
Prior to that, he worked as a research engineer in the Institute for Communication Systems and Vodafone. Karim holds an MSc in Information
Systems Management from the University of Southampton and a PhD in human–computer interaction from the University of Surrey.
© Analysys Mason Limited 2016 28Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
Analysys Mason’s consulting and research are uniquely positioned
Analysys Mason’s consulting services and research portfolio CONSULTING
We deliver tangible benefits to clients across the telecoms
industry:
communications and digital service providers, vendors,
financial and strategic investors, private equity and
infrastructure funds, governments, regulators,
Consumer broadcasters, and service and content providers.
Regulation
and SME
and policy Our sector specialists understand the distinct local challenges
services
facing clients, in addition to the wider effects of global forces.
Digital
economy We are future-focused and help clients understand the
Transaction challenges and opportunities that new technology brings.
support
Regional RESEARCH
markets
Our dedicated team of analysts track and forecast the
Telecoms different services accessed by consumers and enterprises.
Strategy
software and and planning We offer detailed insight into the software, infrastructure and
networks technology delivering those services.
Clients benefit from regular and timely intelligence, and direct
access to analysts.
© Analysys Mason Limited 2016 29Communication services in Sub-Saharan Africa: trends and forecasts 2016–2021
PUBLISHED BY ANALYSYS MASON LIMITED IN AUGUST 2016
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