Africa now boasts 11 million 4G users and more than 70 operational 4G networks, many of which were launched last year. How can operators accelerate 4G uptake in Africa? What are the best strategies to convince customers?
The year 2016 saw a raft of 4G network deployments following the granting of licenses by regulators and also the arrival of new entrants wishing to challenge the first 4G operator on their market. Although the "first mover" always has an advantage in making his own customers loyal (and poaching new ones from competitors), challengers can leverage technological progress, for example by upgrading directly from 3G to 4G+ (LTE-A).
Technological levers specific to Africa
Chinese equipment makers are playing a major role in African 4G by driving network construction and even facilitating the financing through a Chinese organization created specifically for this purpose. Huawei has 10,000 employees in Africa and has created training centers in South Africa, Egypt and Tunisia.
Further, since smartphone penetration is a preponderant factor in 4G adoption, Chinese phone makers have released low-cost models. Telcos are also helping to make handsets more affordable by proposing mobile plans that come with a subsidized phone and a data allowance.
African operators have another advantage in that many of them initially chose WiMAX for broadband mobile, which was later superseded by LTE. Now TD-LTE brings them an opportunity for rapid reconversion, the frequency bands being the same. Huawei claims that TD-LTE network deployment costs 30% less than FD-LTE. The GSMA estimates that 25% of African 4G networks and 10% of 4G subscribers were using TD-LTE in June 2016.
Strategies for target groups with different needs and means
There is very strong consumer demand for faster Internet browsing and operators perceive real potential for 4G in cities. The more affluent individuals are particularly sensitive to browsing comfort both at home and on the move. Moreover, 4G offers an alternative to the residential landline often unreliable in Africa and in any case unsuitable for new usages such as HD streaming.
Operators are segmenting their offers in order to convert as many people as possible. For low-value users they propose a small data allowance and special promotions. For more exigent, better-off customers they have a range of plans with tiered pricing matched to people's needs in terms of speed and data volume. Some even propose streaming content services such as Deezer and ICFLIX.
Thierry Breton (CEO of Atos) and Alexandre Zapolsky (CEO of Linagora) predict that digital will generate $300 bn, or about a tenth of Africa's GDP, within the next decade. Inadequate infrastructure still hinders African development, but cellular telephone has brought services that substantially improved the daily lives of Africans.
The ongoing rollout will soon bring 4G to all African cities, after which we can expect massive deployment in rural regions enabling a quantum leap forward in terms of economic and social development.