TREND.iNSIGHT: The First Screen

TRENDAFRiCA March 14, 2013

Numbers game

Infographic - South African mobile and tablet growth 2012 - Ensight

There is no doubt that the numbers for local and global mobile phone adoption tell the real story of a true global technological revolution no one could have predicted.

In 2013, Cisco reports that the number of mobile devices in circulation will hit 7 billion – outnumbering the human population due to growth in developing areas such as Asia, the Pacific and Africa.

In the Native agency mobile report, Jan 2013, they quoted global 3G strategy consultant, Tomi Ahonen,who predicts that 2013 will be“the year of the Mobile Moment” – when mobile handsets exceed the human population (no gadget in the world has ever achieved this before).

Global mobile subscribers, phones, and users at end of 2012 were: 7.1 billion humans with 6.7 total active subscriptions (94% of all humans); 5.2 billion had phones in use, including those with two phones (73% of all humans); and 4.3 billion unique users who have at least one phone and account (60% of all humans).

Ericsson reports that 85% of the world’s population should be covered by high-speed mobile internet by 2017 with 3G coverage; 50% will be covered by 4G by 2017; there will be 3 billion smartphone subscriptions; there will be 9 billion total mobile subscriptions (machine-to-machine subscriptions will add to this figure); mobile broadband subscriptions are forecast to reach five billion in 2017 compared to 1 billion end-2011; and global data traffic will grow 15 times by end-2017.

Alan Knott-Craig (snr) says there are 60 million active sim cards in South Africa, with 15 million of these belonging to machines (cars for tracking, remote controls, etc).

The second Ericsson ‘Traffic and market report – on the pulse of the networked society’, says that for many people around the world, the mobile phoneis and will be their only means of accessing the internet. That is nowhere truer than in Africa, where connections to the mobile internet bypassed the PC to internet revolution.

Explains Douglas Gilstrap, senior vice president and head of strategy at Ericsson: “Today, people see access to the internet as a prerequisite for any device. This mindset results in growing demand for mobile broadband and increased data traffic. Operators recognise this business opportunity and are aiming to facilitate this growth and provide good user experience with fast data speeds through high capacity networks. Today, around 75% of the HSPA networks worldwide have been upgraded to a peak speed of 7.2 Mbps or above and around 40% has been upgraded to 21 Mbps.”

The main continuous trend identified in the Ericsson report is that ‘everything is going mobile’. This evolution is mainly being driven by “people’s increasing demand for anywhere, anytime connectivity and the use of video, cloud-based services and the internet – but also by machine-to-machine connectivity”.

In fact, in 2011, Nielsen was already reporting that there were more mobile phones in SA than all taxis, TVs and radios added together. And there were then already 5.8 times more homes with cellphones than landline telephones and 4.7 times more households with a cellphone than a computer, 2.6 times more cellphone subscribers than fixed internet users, and 4.2 times more people using SMS text messaging than email.

In South Africa, World Wide Worx estimates that a million tablets may have been sold in South Africa by the end of 2012. Total sales at the end of September had reached 788 000, including the 20 000 or so ‘grey market’ iPads sold during 2010. Apple has 50% market share of the SA tablet market, Samsung 33% and Huawei 7.5%, Gadget reports.
Ericsson Consumer Lab reports that 18% of users surveyed for its consumer trends for 2013, intended to purchase a tablet, compared to 15% who planned to buy a desktop PC. And for mobile phone purchase – 29% intended to buy a smartphone compared to 25% who planned to buy a laptop.

Ericsson indicates that this transforms the mobile computer experience from carrying around heavy computer bags, to searching for places to sit and access power and free wifi, as well as catching up on email, news and social media while doing ordinary activities or commuting.

Ericsson estimates that total smartphone subscriptions will reach 1.1 billion by end 2012, growing to 3.3 billion by 2018.

“Consumers are now an unstoppable force, making the internet truly mobile… there will be no turning back to the fixed internet of old,” Ericsson reports. They also indicate that as many as 57% of all smartphone users are using their private subscriptions for work.

South African consumers are also spending more on data, World Wide Worx revealed in its most recent Mobility 2012 research study. The average SA cellphone user’s spend on data has gone from 8% of their budgets in 2010 to 12% by mid-2012. Spend on voice dropped from 77% to 73% over the same period. SMS spend is steady at 12% and full music tracks 1%.

Goldstuck says spend on data is a barometer for the “rapid increase” of internet users in SA, as well as how users engage with the internet.

The biggest growth after BBM was in the Twitter user base, which rose to 12% of adult cellphone users.

“This is only the beginning: the social networking genie is out of the bottle,” says Goldstuck,
“Businesses have to recognise the trend, and begin developing strategies to address it.”

Globally, Native reports that SMS is the most used mobile service and used by 83% of mobile phone subscribers, followed by voice calls at 5.4 billion users and 81% of all mobile users.

Ericsson reports that by the end of 2012, 40% of all phones sold were smartphones.

Mobile ad spending around the world more than doubled last year, eMarketer estimates, and though growth will moderate this year, double-digit increases in mobile ad spending will continue in coming years as outlays approach $37 billion by 2016. In 2012, mobile spending was at $8.41 billion. Estimates of worldwide mobile ad spending include dollars going toward display and search advertising only, and exclude spending on messaging-based formats. Spending on tablets is also included.

In total, internet advertising spending is projected to increase 15% in 2013 with global web ad spending going to $101.8 billion from $88.4 billion in 2012, projects Zenith Optimedia Group, according to Business Week, reports Ericsson. The growth will be driven by digital and emerging markets.

Of this, mobile ads are projected to grow 51% to $9.7 billion(eMarketer Inc).

It has been predicted for a while that mobile will trounce social media advertising, although BIA/Kelsey still projects a 19.2% annual growth rate for the next four years for social media ads, led by Twitter’s promoted tweets, growing from $1.5 billion in 2012 to $3.9 billion in 2016 in the United States.

BIA/Kelsey estimates that social-mobile ad revenues will jump $500 million in 2012 to $1.5 billion in 2016 with an annual compound growth rate of 28.5%.

“We’re pretty clearly placing a bet that mobile ads will perform,” said Jed Williams, senior analyst with BIA/Kelsey.

Mobile broadband is the biggest single revenue opportunity in Africa right now, as well as over the long term. This is the conclusion from an Industry Outlook survey by Informa Telecoms & Media. Informa forecasts that annual mobile data revenues in Africa will reach US$18.5 billion by 2016 accounting for 22% of the region’s total mobile service revenues as compared with 12% in 2011.

These are Informa’s key findings: mobile data growth will power a number of revenue opportunities; the business case for 4G technology will emerge; the growth of mobile data services will continue to accelerate; giving mobility to broadband services will empower enterprises.

Informa says the biggest challenge is to provide affordable mobile devices to Africa.

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Comments (2)

  1. Pingback: TREND. | TREND.Facts: March 18

  2. Pingback: The 2nd internet revolution : Marklives!com

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