Smart Phone Penetration in Africa Growing Faster than You Might Think

Wikipedia founder Jimmy Wales has been spending the past couple of years working on Wikipedia Zero, a way to make Wikipedia available to users who don’t own a computer or can’t get access to 3G mobile data.

On the other hand, Wales says the pace of smart phone adoption in Africa is happening much faster than people typically think.

The pace of change in Africa was surprising enough that Wikipedia Zero, which formerly had been focusing on India, now is paying a lot more attention to Africa, thanks to the growth in ownership of cheap, Android-powered handsets. 

The African mobile market in the third quarter of 2012 served 1.08 billion people using 821 million subscriber information modules, representing subscription penetration of 76.4 percent. In the first quarter of 2013, mobile penetration will eclipse 80 percent, according to ABI Research.  

One might predict that, even though Internet usage remains low, and broadband as well, that likewise will change dramatically over the next decade. 

How Do Tablets Get Used at Work?

Tablet users spend 2.1 hours daily on their tablet for work purposes, a survey of 600 workers has found. Tablet users say they gain 1.1 hours in daily productivity by using their tablet, CDW says. 

Some 84 percent of tablet users say tablet use makes them better multi-taskers, while 71 percent of tablet users say tablet use makes work more enjoyable.

Digital Device Market Growth Will Shift to Emerging Markets by 2017

The global connected device market, including PCs, tablets, and smartphones, grew 27.1 percent year-over-year in the third quarter of 2012, reaching a record 303.6 million shipments valued at $140.4 billion dollars, and a rapidly-growing share of such sales will occur in "emerging" markets in the coming years. 

Expectations for the holiday season quarter are that shipments will continue to reach record levels rising 19.2 percent over the third quarter and 26.5 percent over the same quarter a year ago, IDC estimates. 

Smart Connected Device Market by Product Category, Shipments, Market Share, 2012-1016
(shipments in millions)
Product Category			2016 Unit Shipments			2016 Market Share			2012 Unit Shipments			2012 Market Share			2016/2012 Growth
Desktop PC			151.0			7.2%			149.2			12.5%			1.2%
Portable PC			268.8			12.8%			205.1			17.2%			31.1%
Smartphone			1405.3			66.7%			717.5			60.1%			95.9%
Tablet			282.7			13.4%			122.3			10.2%			131.2%
Total			2107.8			100.0%			1194.0			100.0%			76.5%
Source: IDC Worldwide Quarterly Smart Connected Device Tracker, December 10, 2012. By perhaps 2017, more tablets will be sold in "emerging" countries than in "developed" or "mature" countries, according to NPD.  Also, there is significant awareness and appetite on the part of "emerging market" firms to use the latest collaborative and digital technologies. In fact, appetite for cloud computing, business intelligence, mobile services and devices, collaboration tools, social media and telepresence is significantly higher in emerging countries than in developed nations.

U.S. Delegation Takes Tough Stand Against ITU "Takeover" of Internet

The U.S. delegation to the International Telecommunication Union talks about regulation of the Internet has threatened a veto if proposals seen as posing a danger of censorship. 

New Money, Old Problems

Would-be innovators in the virtual currency business face a problem other entrepreneurs in the Internet ecosystem also have faced, but with even-higher obstacles. 

The problem is that there now are many ways "money" or its equivalents can be exchanged between people, and lots of new ways people can use "banking" functions involving the receipt or sending of money. 

But what can be done, in terms of technology, is not always legal. Banking, everywhere, is among the most regulated of all industries, and always is viewed from a "national interest" perspective.


"A digital payment can move between two people as they pass each other on the street, or between two people on opposite sides of the Earth, with no difference between the character of the two payments,” says Erik Voorhees, a Bitcoin entrepreneur who works at Bitinstant. 

So technology alone will not dictate how "money" and "banking" will change. Regulators will be quite vigilant about protecting existing ways of doing things, not specifically to safeguard incumbent business interests, but everywhere to "protect the public."

One might note that mobile payments already have run into a "post-hype" period where muted expectations will be the rule. Virtual money or virtual currency has not yet even emerged into a full-blown hype phase. 

2013 Could be a Big Year for Internet Access in the United States

A U.S. Court of Appeals finally will hear a Verizon challenge to Federal Communications Commission network neutrality rules. How the court rules could lead to big changes for the broadband access business. 

Specifically, if the court sustains the network neutrality rules, it is possible the "best effort only" rules that now apply to fixed access providers likely will be extended to mobile service providers as well. 

It is conceivable that new rules could be considered that extend FCC rules over terms and conditions of service, including such items as prices or data caps. 

The case, which is before the Court of Appeals for the D.C. Circuit, is Verizon's challenge to the FCC's controversial net neutrality rules. The case has been winding its way through the courts since 2010.

The regulations, adopted by the commission in late 2010, mandate that the only class of service a consumer Internet service provider can offer is "best effort," with no quality of service policies or traffic shaping.

The intent is to bar ISPs from charging application providers for expedited delivery or class of service features. The logic there is that such business practices could lead to invidious business practices where an ISP either favors its own services, or a situation where larger app providers are able to afford a better end user experience than their smaller rivals.

But if the FCC loses, some FCC commissioners will be tempted to reclassify broadband Internet as a "telecommunications service" under the Communications Act, which would give the FCC more authority to regulate it.

On the other hand, some observers think the same court, which upheld  the Federal Communications Commission’s data-roaming rules, has sent a signal it will upheld in the net neutrality case as well.

In the earlier decision, the U.S. Court of Appeals for the District of Columbia ruled against a Verizon Wireless challenge to the FCC’s rules requiring wireless operators to provide roaming access. 

Up to this point, the legality of the network neutrality rules as applied to mobile service providers has been unclear, as the FCC has said it has the authority to apply net neutrality rules, but simply has avoided doing so. 

If the FCC wins the appeals court case, some members of the FCC might be emboldened to extend rules over broadband access that make it a common carrier service. Many observers think that would lessen innovation and reduce investment in the business, on the part of access providers. 

So 2013 could be a big year for the broadband access business. 

Broadband Growth Should Shift Beyond BRICS

IDC predicts that emerging markets will contribute for 53 percent of 2012’s global information and communications technology growth. And a poll of 675 global IT and business professionals suggests Indonesia, Vietnam, Qatar and Myanmar are the countries to lead that growth.

But Israel, Iraq, Uganda and Cambodia were other countries also viewed as countries where growth could occur.

Notably, just five percent of respondents chose Brazil, Russia, India, China or South Africa as among the nations having the strongest growth, though the so-called BRICS nations have been at the top of global growth lists for some years.

Regionally, Asia-Pacific (exclusive of China and India) was cited by compared to 61 percent of survey respondents as the region most likely to lead revenue growth.

Even the Middle East seems a more promising market, with 15 percent of respondents
choosing it as the next boom region.

In part, the shift of growth expectations is a logical consequence of rapid development in the BRICS nations over the last decade. The International Monetary Fund has cut its 2012 and 2013 growth expectations for China, India and Brazil, for example. Those countries have made large
investments in their technology and telecom infrastructure. Though not yet at a saturation
point, those countries are fast approaching saturation, at least for mobile and computing infrastructure.

In Indonesia, for example, there are around 55 million internet users. But that’s just a tiny fraction (22 percent) of its 245 million population. But growth is going to be rapid. The number of internet users grew 29 percent in the most recent year.

Predictions point to 76 million users by 2015. Perhaps ironically, the majority of Internet users are accessing the web while on the go, and not from a desk. While mobile penetration is at 54 percent, PC penetration is just five percent.

But PC sales are grew 36 percent in the most recent year.

In Vietnam, 2012 information technology spending will have increased by 19 percent, IDC says. The total number of smart phones in Vietnam is expected to rise by five percent in 2012 to 21 percent.

The number of people using mobile phone services is expected to reach 90 percent of its population by 2015 and 95 percent by 2020.

By 2015, about 45 percent of the population will be using the Internet by 2015, up from about 30 percent in 2012.
Tablet penetration currently stands at two percent, but it’s expected to rise 92 percent by the end of 2012.

IDC is expects 15 percent year-over-year growth of information technology and communications spending in Myanmar in 2012. Internet usage is quite low, probably in low single digits, while mobile penetration rates likely are similar.

Around 80 percent of the Myanmar population of about 60 million people live in rural areas, pointing out the challenges of getting Internet service to most people.

Qatar’s state-backed Qatar National Broadband Network Company plans to build a fiber to home network reaching 95 percent from the current five percent, reaching 30,000 homes by the
end of 2012 and 300,000 by 2015.

In most emerging markets, wireless will be the preferred access method.  For example, in a recent project that Analysys Mason undertook involving nine countries in the Middle East and North Africa, Analysys Mason found that in Algeria it would be commercially viable to roll out fiber to the home to around 12 percent of the population and wireless technologies to around 70 percent of the population.

                                    Economic Viability of Various Access Technologies

Retail cost of service remains a key business issue, though. A study by Ovum found that South Africa had the most expensive broadband tariffs of 19 studies countries. Entry-level services in South Africa cost as much as $1,443 per year, with the prices of high-end services up to $6,000 per year.
Ovum found that lower end entry-level services cost as much as $1,211 per year in Nigeria.

In the countries that Ovum looked at, broadband services using HSPA (mobile 3G) technology were the cheapest option for entry-level users, with an average price of $223 per year.

Still, since broadband penetration in the developing world is only about  six percent , there is lots of room for growth.