SOUTH AFRICA IS HUNGRY FOR MOBILE DATA

AND WHY IT IS THE ONE TO WATCH FOR MOBILE INTERNET IN AFRICA

We know about

mobile technology in Nigeria,

and mobile money in Kenya,

but what about South Africa?

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Did you know that South Africa ranks 5th in the world for mobile data usage?

The US is just 7th.

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5 5

55

55

5

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Mobile phones dominate in South Africa Source: Nielsen (2011)

South Africa is the continent’s strongest economy, and it’s well connected

African Terrestrial Fibre Optic Cable Map Source: Google Africa, manypossibilities.net

POPULATION

MOBILE  vs  FIXED  BROADBANDMOBILE  PHONE  PENETRATION

POPULATION  UNDER  25  YRS

53  Million

8:1135%

49%

41%

g

^

N

INTERNET  PENETRATION*

*Adults aged 16+ Source: Index Mundi (2013), World Bank (2012), ITU, Wikipedia, IDG Connect

INTERNET  USER  GROWTH  (2010-­‐12)

140%

Key South Africa mobile statistics

South Africa has a higher rate of mobile subscriptions than both Nigeria and Kenya.

Mobile subscriptions (per 100 persons) Source: World Bank (2013)

It also has a higher subscription rate than the rest of Africa, the US and the world on average.

High mobile subscription rates

Mobile connections vastly outnumber fixed broadband subscriptions

Source: CNBC Africa (2013)

"I think the biggest change is that globally the majority of internet usage will be done via a mobile device and for most people the mobile web will be their primary - if not their only - way of experiencing the internet.” !Peter Rojas, co-founder of Gdgt, Engadget and Gizmodo

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Mobile internet - a priority for businesses

Source: Business Insider (2011)

Mobile is South Africa’s gateway to the internet

80% of internet users are using only their mobile phone to access the internet,

with 14% using both mobile phone and fixed broadband*,

A minority 0.3% are using fixed broadband* only.7

557

*Referred to as “landline”. Source: mybroadband.co.za

!136%increase in mobile broadband usage

from Aug 2012 - Aug 2013

Mobile broadband is on the rise

Source: mybroadband.co.za, Digital Media and Marketing Association (2013)

And it’s still growing...

Mobile operator MTN South Africa intends to double the number of 3G base stations in 2013, to extend wireless broadband access to underserved parts within the country

!Source: africantelecomsnews.com,

Why are people using mobile broadband?

The biggest reason why

is cost.

66 Percent Source: Network Society ZA (2013)

consumers choose mobile to access the internet...

38%21%25% 19% 8%

Internet is too expensive Internet is very slow No interesting content Lack of local language content

Too few people to communicate with

Reasons limiting internet use:

More South Africans own a mobile phone

than any other electronic device

What consumer electronic device do you currently own in your household? Source: Nielsen (2011)

South Africans like spending on electronics

South Africans spend a larger proportion of their wage on electronics than many other countries.

In the past 12 months, how much have you spent on purchasing consumer electronics? Source: Accenture (2012)

What are they buying next?

Which of the following consumer electronics do you plan on purchasing in the next 12 months?

7586Which of the following consumer electronics do you plan on purchasing in the next 12 months? Source: Accenture (2012)

Smartphone vs. feature phone

Basic feature phones continue to dominate in South Africa — from legacy handsets passed on through families to affordable new models such as the Nokia C1-01. !The smartphone market grew 45% from 2010 - 2011.

Tablet 0.4%

Feature phone 70.6%

Smartphone 29%

!Source: BuzzCity (2012), Quartz (2013)

The average South African will purchase a feature phone on Pay-As-You-Go with cash

Whereas those who purchase a smartphone will pay via a 24 month* contract

VS

*average. Mobile Phones in South Africa Source: Euromonitor International (2012)

Nokia dominates for handsets

0%

25%

50%

75%

100%

2007 2008 2009 2010 2011

Nokia South AfricaSamsung ElectronicsLG ElectronicsSony EricssonRIM / BlackberryHTCAppleMotorolaOthers

Mobile handset retail shares % Source: Euromonitor (2012)

Handset OS & carrier: Nokia and Cell C rule

Nokia&S40&41.92%&

Symbian&OS&8.40%&

Blackberry&OS&7.37%& Android&

5.40%&

Samsung&OS&3.24%&

Windows&Mobile&OS&0.90%&MTK&/&Nucleus&OS&0.53%&iOS&0.41%&Sony&Ericsson&OS&0.35%&MAUI&0.34%&LG&OS&0.21%&Windows&CE&0.08%&

Motorola&OS&0.03%&Linux&Smartphone&OS&0.03%&Windows&Mobile&(PPC)&0.02%&Others&

30.76%&

Cell$C$47.07%$

MTN$29.15%$

Vodacom$22.20%$

Telkom$1.58%$

Windows Mobile OS 0.9%

iOS 0.41%

MTK / Nucleus OS 0.53%

Nokia&S40&41.92%&

Symbian&OS&8.40%&

Blackberry&OS&7.37%& Android&

5.40%&

Samsung&OS&3.24%&

Windows&Mobile&OS&0.90%&MTK&/&Nucleus&OS&0.53%&iOS&0.41%&Sony&Ericsson&OS&0.35%&MAUI&0.34%&LG&OS&0.21%&Windows&CE&0.08%&

Motorola&OS&0.03%&Linux&Smartphone&OS&0.03%&Windows&Mobile&(PPC)&0.02%&Others&

30.76%&

Cell$C$47.07%$

MTN$29.15%$

Vodacom$22.20%$

Telkom$1.58%$

Handset OS

Handset carrier

Source: Euromonitor (2012)

What are they using their phones for?

Facebook has overtaken Mxit

Total members of each social media network in South Africa Source: World Wide Worx, memeburn.com (2013), bluemagnet.co.za (2013)

9,600,000%

7,400,000%

5,500,000%

4,700,000%

2,700,000%

1,100,000% 930,000% 680,000% 460,000%

Facebook% Mxit% Twi:er% YouTube% LinkedIn% 2Go% Pinterest% Instagram% Google+%

Source: Edward Chamberlain-Bell

Over 5 million South Africans spend 21 minutes a day on Facebook

Most of them are connecting through Pretoria, the capital city

That’s a collective 200 years every day

v[

o

South Africa has the most active Twitter population in Africa

Next nearest was Kenya with 2.47 million tweets, less than half of South Africa,

and Nigeria was the third most-active country with 1.65 million tweets.

South Africans posted more than 5 million* tweets during Q4 2011.

t

*Survey analysing 11.5m geo-located tweets across Africa. Source: PC Mag (2012)

82% of South Africans use instant messaging

!Source: Accenture (2012), SimonQ錫濛譙

Social messaging voted #1 use for smartphone

How often do you use your smartphone for the following activities? Source: On Device Research (2013)

0%#

10%#

20%#

30%#

40%#

50%#

60%#

70%#

80%#

90%#

100%#

Social#messaging#apps# Voice#calls# SMS# Email#

More#than#10#?mes#a#day# 2B3#?mes#a#day# Once#a#day# Daily#

...and WhatsApp is most popular!

Which of the following do you use at least once a week on your smartphone? Source: On Device Research (2013)

68%$

47%$

34%$

24%$

18%$ 18%$

13%$

9%$6%$

WhatsApp$ Facebook$Messenger$

BBM$/$BlackBerry$

Chat$

TwiDer$ Mxit$ WeChat$ Skype$ Yahoo$Messenger$

Viber$

Education and eLearning

is the 2nd largest use of mobile in Africa?

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Did you know...

Source: TNS Connected World report

 Dr.  Math

Dr Math, launched in 2007 and with 32,000 users in South Africa

It provides a mobile tutoring service hosted via a free application,

MXit, the social messaging app and is available for

less than the price of an SMS

Source: TNS Global (2013) http://drmath.meraka.csir.co.za/drmath/

The University of Pretoria in South Africa uses mobile technology to support its paper-based distance-learning programs for postgraduate students in rural areas

Source: TNS Global (2013)

Nokia Mobile Mathematics

“Nokia Mobile Mathematics is an engaging solution to study mathematics using personal mobile phones”

It’s already in use in over 200 schools in South Africa, piloted in other African countries and available globally for anyone to use.

What is it?

Source: Nokia (2013)

http://momaths.nokia.com/select/

Following Africa’s lead in mobile banking:

mobiles have also enabled South Africa...

...to overcome its infrastructure barriers.

Mobile banking has taken off by overcoming Africa’s lack of infrastructure - so few local bank branches often means long distances to travel and even longer queues once there.

Mobile banking eliminates this barrier.

but 90% do own a mobile phone...

21% of South Africans don’t have a bank account

Source: Business Week (2013), TNS (Dec 2012)

South Africans do not view using a bank as a secure way to manage their money.

Mobile banking and e-payments are not only Government backed, but they allow South Africans to pay bills or transfer money securely.

After M-PESA’s overwhelming success in Kenya, it launched in South Africa three years ago, with Vodacom. They are currently investing in new technology to allow more local retailers to act as M-PESA agents.

Mobile banking offers South Africans the security that a bank cannot provide

Source: The Economist (Sept 2013), Business Week (2013)

“South Africa’s First National Bank (FNB) customers can now invest and trade in shares on the Johannesburg Stock Exchange ( JSE) using the bank's app on any smartphone or tablet device.” !- The Economist (2013)

Mobile  money  and  banking

“Mobile shopping is becoming increasingly commonplace in Africa. It’s an exciting time for the consumer, retailer, and manufacturer as mobile shopping solutions will become more accessible, intelligent and compelling to use.” !- James Lamberti, VP Global Research & Marketing at InMobi

Source: Business Insider (2011)

E-commerce is taking off

PayPal offered merchant services to South African companies for the first time. Other payment gateways such as Pay4it, MonsterPay and Evripay provide e-commerce solutions for small and medium sized businesses

$326mthe value of e-commerce, or internet retailing, in South Africa in 2012

2010

Internet retailing in South Africa, USD $ Source: Euromonitor (2013)

The increase of e-commerce payment gateways that offer convenient and secure payment solutions has driven growth of e-commerce in South Africa.

However, there is a distinct lack of mobile-focused internet retailers in the market.

Source: Yenkassa

Source: InMobi (2011), World Wide Worx (2012)

62% of South Africans purchase on mobile devices

What products consumers are buying on their mobiles, (% buying)

62%$

45%$

11%$ 10%$7%$ 7%$

3%$

Any$purchase$using$mobile$

device$

Digital$Goods$ Consumer$Electronics$

Travel$ Apparel$ Entertainment$Tickets$

Other$

Mobile makes it easier for small businesses

Researchers in South Africa working for SAP, a software giant, are trying to connect very small businesses, which make up a large part of Africa's economy. !!

!Source: The Economist (2011)

One service lets craftsmen create a virtual job docket with a few texts or touches on a smartphone, even without mobile-network coverage. The information is uploaded to a computer system later. !Another allows rural stores to order goods, saving time-consuming trips to city markets.

The average South African mobile user…

Carrying a Nokia or Samsung

feature phone

Has low spending power

High levels of network loyalty

Moving from pre-paid to contract

Use mobile phone > any other device

On Device Research uses the mobile internet to gain access to consumer opinion any time or location. !Mobile research brings fresh, instant responses that accurately capture the feelings, thoughts and opinions of people anywhere.

Want to reach South African consumers?

Interested in mobile research?

Visit ondeviceresearch.com for more information !or contact Siim Teller siim@ondeviceresearch.com +44 207 278 2267

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