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Sofrecom speaks on mobile data pricing at CARET 2011

Sofrecom speaks on mobile data pricing at CARET 2011

By Thomas Rivoire - January 12, 2012

The event, organised jointly by Télécom Paris Tech and Arcep Burkina Faso, was attended by nearly 200 people from 23 different countries. The majority were representatives of West and Central African regulators, but participants also included academics, members of civil society from Burkina Faso, ICT consultants and major operators, including Orange.

The aim of the conference was to examine the multiple problems encountered by the African market, to discuss usage of telecommunications and to exchange ideas about best practices in terms of regulation.

Sami Matri, a consultant with expertise in the markets of the Middle-East and Africa, contributed to the discussion on price regulation with a paper on mobile data pricing in Africa.

His presentation, ‘The challenges of mobile data in Africa: can we see the wood for the trees?’, documented the shift in data usage towards mobile Internet, and the issues that must be taken into account to build efficient business models and implement effective market regulation.

Like mobile voice calls, mobile Internet has an important role to play in the social and economic integration of populations in Africa. It is anticipated that, by 2015, 20-50% of total mobile connections will be 3G or 4G connections.

Operators, whose voice revenue is falling every year, see this area as offering new potential for growth. In addition, regulators need to render profitable the frequencies that are still available, and expand their tax base in telecoms services. However, as is the case in Europe, mobile Internet traffic is likely to grow more quickly than the revenue it generates. In Africa, this discrepancy is likely be exacerbated, due to the peculiarities of its markets and the externalities affecting local networks (power cuts, lack of BTS, congestion problems in the collecting system, etc.).

The question of pricing is therefore a crucial one. Pricing models can only be established with a detailed understanding of the socio-economic context, customer usage habits and the networks deployed. These models must enable us to optimise not only profitability, but also the management of mobile data traffic based on place of connection and usage period.