Revenues from data services are expected to surge in Mozambique and Namibia by 2017, says analysis from Frost & Sullivan released this week.

A report from Frost & Sullivan called ‘Southern African Broadband Market Analysis’ has found that in 2012, Mozambique and Namibia respectively earned revenues of $78.3 million and $51.1 million from data.

Furthermore, data revenues for Mozambique and Namibia are forecast to reach respectively $146.5 million and $78.8 million in 2017, said Frost & Sullivan.

The research firm has attributed the growing demand for data services to a proliferation of virtual socialisation tools; the introduction of smartphones, value-added services, and customer demand for converged voice and data services.

The research firm added that increased mobility could further spur on the market as “end users look to gain access to high-speed mobile, data, and voice services at all times.”

Competition is also resulting in the reduction of prices and fuelling the uptake of broadband services in Southern Africa, said Frost & Sullivan.

BuddeComm research has forecast that by the end of 2013, Mozambique is set to have a mobile penetration rate of 49% while the country’s internet usage rate is at just 7.4% of its 25.2 million population.

BuddeComm research has also forecast that Namibia, which has a population of just over 2 million, is forecast to have a mobile penetration rate of 113% by year-end and an internet usage rate of 13%.

"In Mozambique, the entrance of a third mobile operator, Movitel, is spurring the market by targeting rural areas and low-income groups with lower prices than its competitors," said Frost & Sullivan information and communication technologies industry analyst Naila Govan-Vassen.

"Meanwhile, in Namibia, service providers prefer to focus on data services as a new stream of revenue due to the saturation of the voice business," said Govan-Vassen.

The analysis goes on to say that Namibia is developing a “highly integrated broadband market, with fixed operators offering mobile services through code division multiple access (CDMA) and global system for mobiles (GSM) networks, along with fixed broadband using asymmetric digital subscriber line (ADSL) networks.”

In Mozambique, however, Frost & Sullivan said companies must create a need for the service to retain existing users as well as attract new customers.

In addition, more submarine fibre cables in Mozambique and Namibia are expected to slash the price of bandwidth in the region.

The research company has noted, though, that while bandwidth prices are falling, inconsistent power supplies are affecting the quality of service.

Also, high levels of poverty and illiteracy hamper market growth.

"To survive in this increasingly competitive and integrated market, companies need to place emphasis on product differentiation and innovation," concluded Govan-Vassen.