Broadband and Mobile Device

Landscape in Africa

David H. PageNaman Gupta

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Broadband and Device Landscape: Africa

• Executive Summary

• Landscape

• Key Growth Markets: Nigeria, Ghana, South Africa

• Highest Value Opportunity: Nigeria

• Appendix

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Executive Summary

• Nigeria, Ghana and South Africa are areas of immediate growth for mobile broadband

• Government support of mobile broadband will ensure ubiquity and 4G/LTE infrastructure

• Smart phone adoption by Africans is large and growing

• Entertainment from US is desired

• Now is the time to build infrastructure

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Landscape: Africa Exploding Growth

Africa currently ranks 3rd in continents with 781 million in mobile subscriptions 1

Mobile broadband growth CAGR (2010 – 2013) - 82% 6,7

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Africa Telecom Landscape: Major Players

• Vodafone Group

• Bharti Airtel

• MTN

• Globacom

• Orange

• Etisalat

• Sudatel

• Millicom

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Africa: Key Growth Markets

NIGERIA GHANA SOUTH AFRICA

4G status 4G WiMAX Mobitel Nigeria; 4G LTE Swift;Glo

4G LTE Alcatel-Lucent and Surfline in Q1 2014

4G LTE Vodacom and 4G LTE MTN in Johannesburg, Cape Town; 8ta LTE trials

Number of Telecom Operators 8+ 6+ 5+Mobile Connections 125 Miliion Subscribers 25 Million Subscribers 67.9 Million Growth Rate for Mobile Connections 18.70% 20.73% 13.60%

Smart phone as percentage of total mobile connections 8.00% 25%+Mobile Penetration 69.01% 84% 123%Internet Penetration Rate 28.40% 14.10% 17.40%Broadband penetration Rate 3G as at Dec 2011 5.00% 2% 22%Internet Users 48.3 Million 3.5Million 8.5MillionCan Video Streaming be well viewed on 3G ? Yes depending on Service Provider Yes Yes

Video data landscape

Entertainment which includes video,audio and gaming constitutes about 46% of online activity N/A

Mobile video traffic will grow 16-fold from 2012 to 2017, a compound annual growth rate of 73%;Video will be 73% of South Africa's mobile data traffic in 2017

New revenue stream for Telecos

Mobile money and banking,Content Audio and video streaming,ecommerce,mobile advertising,e government initiative

Mobile money and banking,Content Audio and video streaming,ecommerce,mobile advertising,mobile health

Mobile money and banking,Content Audio and video streaming,mobile advertising

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Focus Now: Nigeria

•Total number of mobile subscription in Nigeria is around 120 million active Mobile subscriptions 1

•Added 4 million net mobile additions in Q2 2013 only 1

•Mobile broadband outpacing regular broadband adoption

•Has potential to become the biggest smartphone market on the continent 3

Largest African country by population - 177 million

Ethiopia is the 2nd largest – only 86.5 million by comparison

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Nigeria: The Telco Landscape

• 50MM Active Internet Subscriptions 4

• Teledensity between 80-85% 4

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Nigeria: The Telco Landscape

• Telecom is 8.53% of 2013 GDP 4; CAGR of 22% since 2001

• Plans to increase cable capacity by ~1000% by 2014 5

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Nigeria: 1-3 years of growth

Current Numbers:

•Internet penetration ~ 33% 4

•Broadband penetration ~ 6% 4

•3G coverage ~ 35% 4

•Smart phone adoption ~ 25% 2

Current State:

•Delays in allocating bandwidth

•Lack of built LTE infrastructure

•High cost of smartphones

•Most phones still running Symbian and S40

On-going measures that will drastically accelerate mobile broadband growth:

•Billions of US$ in investments per year, tens of thousands of new base stations to be built

•Major network infrastructure outsourcing deals

•Mergers and acquisitions (M&A) among smaller operators

•Several LTE networks preparing to launch (current operation of high speed 3.5G and 3.75G networks)

•Regulator cracks down on poor quality of service

•New price caps and lower interconnection rates

•Number portability finally introduced

•Extensive government support & planning for infrastructure development and mobile adoption

•30 million smartphones were expected to be sold in the country between now and 2015 3

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Appendix A – Mobile web page views

http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/b

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Appendix B – Active mobile broadband subscriptions

http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/b

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Appendix C – Major African telecom operators

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Sources

1. http://www.vanguardngr.com/2013/09/nigeria-other-african-countries-record-781m-mobile-subscription-in-q2/#sthash.A1TnsD6j.dpuf

2. http://www.technologybanker.com/mobile/mobile-internet-penetration-in-nigeria-stands-at-28percent#.UlskwmRgYn0

3. http://www.punchng.com/business/technology/25-of-nigerian-mobile-subscribers-use-smartphones-tns/

4. http://www.ncc.gov.ng/

5. http://www.slideshare.net/eddodds/fmct-the-nigerian-national-broadband-plan-2013

6. http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/b

7. http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx

8. Broadband Commission; Sub Shaharan African Mobile Observatory 2012,

9. Deloitte; Nigerian Communication Commission International Telecommunication Union, GSMA 2012