The media market in Africa is booming for both home-grown and international content, but to develop further, Africans need cheaper data, faster network access and devices capable of streaming media.
According to Dion Price, CEO of revenue and device security specialist Trustonic, the challenge is that the average selling price of phones is going up, and in some cases by a marked amount. “Even at the lowest end of the market, the minimum specification for an Android device has increased over time,” he explains. “Google rightly wants to ensure a positive consumer experience when using even the most basic Android devices but that means a handset manufacturer has to provide decent hardware (screen, camera, memory etc) along with sufficient processing power for it to run smoothly for the end consumer. Despite huge economies of scale in the industry, the prices of components can only fall so far and will climb as minimum specifications increase,” he predicts.
Trustonic conducted research into how this is affecting the market in South Africa. It found that while 66 per cent of customers are happy with their operator, customers frequently churn to get access to a better device. Devices are a huge issue for South Africans, with the Trustonic survey finding that two-thirds change their device every two years and 21 per cent of men and 15 per cent of women change their device annually.
These fast handset cycles mean that they will be able to get access to the latest 5G networks when these are available in their area, as customers upgrade to 5G-capable devices – also helping build the market for mobile entertainment services. The fly-in-the-ointment though is that much of this upgrading is being driven by handset theft rather than choice. Half of South Africans (47 per cent) have had to buy a new mobile recently as a result of loss or theft, which rises to 75 per cent in the 25-34 year old age group. Altogether almost two-thirds of South Africans (64 per cent) report having had their phone stolen at some point.
Theft makes it harder for a South African to afford a top-end handset and makes it riskier to own one. Even so, the importance of their mobile means that 56 per cent intend to upgrade to a 5G capable phone in the next 12 months – with 61 per cent of the 25-44 age group intending to do so. This raises two key issues. The first is how to enable customers to afford a feature rich phone that will support their experience of entertainment and media services, and secondly how can operators help secure phones to discourage theft?
Price explains that operators can overcome these hurdles by securing the devices themselves. “When the devices are secured via improved locking technology, the risk of extending finance and spreading the cost of the device over time without the need for any form of consumer credit rating is removed or dramatically decreased,” he advises. Theft is also discouraged, because a device can be rendered useless by the mobile operator or retailer, reducing its onward or resale value. “If a phone can be reduced to a glorified paperweight at the flick of a switch, no one is going to want to buy it on the second-hand market,” he notes.