‘SA mobile apps market worth $220mn in 2017’

‘SA mobile apps market worth $220mn in 2017’

Total spending on mobile applications in South Africa could surge from $31 million this year to $220 million in 2017, while voice revenues in the country are forecast to plummet.

This is according to a Pyramid Research study that says the growth in the adoption of smartphones, increasing availability of apps and various payment methods could result in greater demand for mobile applications.

The study also adds that carrier billing is becoming more widely available, making app purchases quick and easy. This in turn could further facilitate the adoption of in-app billing models, says Pyramid.

In-app purchases involve buying subscriptions or extra content from within an application.

Other factors potentially driving up mobile app demand include undersea broadband connections such as the West Africa Cable System (WACS) enabling higher bandwidth and lower data pricing.

“Paid and subscription-based apps dominate revenue, but are expected to be overtaken by in-app payments in 2013,” says the study.

“In 2017 in-app payments are expected to generate 72% of total mobile app expenditures,” the study adds.

But Pyramid says that as demand for mobile apps is forecast to grow in South Africa, telecommunications firms - such as Vodacom, MTN, Cell C and 8ta - may become less reliant on voice offerings for revenues.

The company’s researchers say that traditional voice services are plateauing in South Africa and could decline in coming years. Fixed line incumbent Telkom, for instance, is already reporting falling volumes of call minutes, according to Pyramid.

And the researchers even go as far as to say that between 2012 and 2017 they expect a decline of almost $2 billion in total traditional voice services in the country. Even SMS revenues are projected to stagnate.

South Africa, in turn, is seemingly similar to the rest of Africa in terms of increasing mobile data uptake and decreasing voice revenues.

Global consulting firm ATKearney says the rate of growth for mobile subscribers in Africa has sharply decelerated, as intense competition is driving a free-fall in prices and placing pressure on margins.

“The African telecoms market is at a crossroad,” say ATKearney researchers.

“The market will shift from being focused on upper classes and largely voice-centric, to a mass-market with a much more significant share of data services,” the researchers add.

Yet ATKearney researchers say not all is doom and gloom.

“Data connectivity and value-added services (VAS) are poised to grow strongly - starting admittedly from a particularly low base.”

South Africa is one of the more mature mobile markets in the continent, as it has a mobile penetration rate of over 100% for its approximately 50 million population, according to BuddeComm research.



Published on 28 November 2012
By Gareth van Zyl


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