A recent report from the Communication Authority (CA) of Kenya, Africa's third-largest telecom market, shows a sharp decline in revenue from the voice market — a sign of a growing trend on the continent.
Africa's subscriber base for voice communications is still growing but the growth curve has begun to flatten in the region's more mature markets, leading to expectations that telecom companies will compete more aggressively on the provision of data services.
This development is expected to force operators to compete in data services even in rural areas. The trend is also expected to bring down the cost of data services as operators compete to add more subscribers to their networks.
In most countries in Africa including Zambia, Uganda, South Africa, Nigeria and Tanzania, operators are also reporting declining revenue from the voice market and have begun investing heavily in the provision of data services.
In Zambia for example, all three mobile operators — MTN, Zamtel and Airtel — have already launched 4G networks.
In Kenya, the CA has said in its latest report that there was a decline in local mobile voice traffic despite growth in mobile subscriptions from January to March this year.
"It is also possible that subscribers are employing alternative communication platforms that are deemed to be more cost effective, such as Facebook and Whatsapp," according to the CA.
The CA also said "the decline in revenue from the voice market could be a pointer to the rise in the cost of living with many people now being forced to cut down on communication spending."
Over the past two years, several operators in the region have been upgrading to 3G mobile Internet technology while others have been upgrading to 4G networks. As a result, handset manufacturers including Samsung, Nokia and LG have been scrambling to offer data-enabled handsets in a bid to satisfy demand.
The pricing of the phones had been a hindrance to many unemployed youths and low-income workers. Competition among the mobile phone makers, though, has started to bring down the price of data-enabled handsets. Improved network bandwidth and services and the rise in use of social networks have also contributed to greater usage of mobile data services.
All this is taking a toll on the voice market. This has left larger operators in the region including Airtel, MTN, Orange and Safaricom with no choice but to compete more aggressively for a share of Africa's data market in order to remain competitive.
Christian de Faria, Airtel Africa CEO, said this week that "the growth of the company can be attributed to accelerated data consumption by youths."
A number of recently completed undersea and land-sea cables are providing much-needed extra capacity for operators. Mobile data, driven by email and broadband services, is anticipated to generate US$2.2 billion in revenue in the region by the end of this year.
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