Read time: 3 minutes

4G handset cost a major headache for operators

4G handset cost a major headache for operators

One of the key outcomes of the latest Intelligence African Market Outlook 2016 is that 4G handset cost is the single biggest problem operators in Africa face in getting users onto 4G.

This is based on the views of the 39% of respondents in the research survey launched in October with responses from more than 150 telecom operators on how they see the 4G technology, though it is still in its relevance infancy in Africa.

A dig into the 4G uptake is relevant going by recent numbers from Orange which suggest that while mobile penetration is at a high point across the continent – with more than 70% of African citizens owning some sort of feature phone, just 17% are using some form of smartphone.

A close second place big problem in the industry is that which was expressed by 37% of the audience who say limited 4G network coverage - which could be as a result of insufficient distribution of spectrum by regulatory bodies; complex terrain and meteorological challenges that affect laying network infrastructure; cost of infrastructure etc. - is limiting 4G data usage.

Other factors they cited are a lack of awareness of flexible data pricing plans (13%), poor network quality (6%) and multi-Sim handset complexity (6%).

They also suggested solutions to the problem: 42% of respondents see the promotion of adaptable LTE plans and tariffs as one of the biggest tools, 35% see the promotion of adapted LTE plans and tariffs as important while 32% believe the answer lies in incentivising consumers to adopt 4G handsets, 29% want to see a greater quality of experience on the network side of things, and 20% are looking towards data-driven value-added services.

Relatedly, while LTE continues to be a priority area of investment – 37% and 36% respectively selected LTE-A rollout and LTE network optimisation as major areas they're further developing at the moment - 43% see the cost of network infrastructure as the biggest challenge facing them today saying there's still a lot more to come from LTE especially as many companies struggle to launch a 4G service.

The survey, which had participants questioned on their views on customer experience, acquisition and retention, as well as a broad overview of the African marketplace, also highlighted that 76% of operators - against 24% - believe churn is a major problem for them, due to the dominance of pre-paid tariffs while nearly half the audience say IoT is the top technology area for investment at the moment in Africa.

For customer retention strategies, customer experience came out as the overwhelming favourite with 74% and 41% of respondents considering VAS as the most important element of the strategy, 49% consider adapted tariff plans important and 42% see promoting plans and services, mobile marketing campaigns as important.

In all, an uncertain 19% of respondents say the market is stagnating or that it's turbulent and unsure, but nearly 70% is more optimistic with one quarter saying the market is growing incredibly quickly as affluence increases throughout society. Under half the audience believe there exists a fantastic opportunity to reach a new market of smartphone users and grow 4G user-bases quickly in the short-term.

Daily newsletter