Fashion Category Bar

WhatsApp Is Hurting Mobile Revenue Growth In Africa And Telcos Want To Fight Back

Written by Desmond FrimpongDate: 7/25/2017
Mobile revenue growth has declined in sub- Saharan Africa since 2013 and is expected to continue its downward trend

As at the end of 2016 mobile subscribers in Africa hit 420 million and Sub-Saharan Africa is expected to add more than 100 million unique subscribers by 2020, that is according to the recent Mobile Economy report by the GSM Association (GSMA).

The growth is expected to be up due to the rise in the number of unconnected young adults getting connected. These unconnected young adults make 40% of the population in several countries.

Although their numbers have been increasing over the years, mobile revenue growth has declined since 2013 and industry players expect a continuous downward trend until the end of the decade although subscriber base in fast growing.

Mobile Economy report blames the revenue shortfall on the use of over-the-top (OTT) messaging services like WhatsApp and Facebook Messenger.

The report explains that there is an “increasing cannibalization of traditional voice and messaging revenues,” as more mobile users prefer chatting and making voice calls.
GSMA 2017 Revenue report (Atlas)
 
Currently, telcos in Africa are still committing some investments to voice calls and SMS texting services which serve as the major sources of revenue.

Although the African region is expected to hit 100 million subscribers in the next three years, smartphone penetration and mobile-data networks are also catching up with more users using social media apps like WhatsApp, Messenger and Skype.

Capital investments made in the telecom industry is huge. The GSMA says the industry would need to invest around $31 billion in expanding across sub-Saharan Africa over the next four years.

The Chief Executive Officer of MTN Ghana, Ebenezer Twum Asante says there is the need to work on regulating  Over-The-Top (OTT) calls made through social media networks such as WhatsApp to stop the increasing loss of revenue suffered by telcos and government.

Services like WhatsApp and Facebook Messenger have been subject of debates by local mobile operators and regulators.

In 2016, Nigeria’s telecoms regulator made claims that OTT services out performed telcos in terms of revenue generation. In February Nigeria’s authorities wanted to regulate apps like Whatsapp and Facebook

South Africa also debated to stop WhatsApp freeloading off local networks following complaints by local mobile carriers

Local regulators keen to be seen as supportive of digital platforms favoured by young people also do not want to discourage investors or harm tax revenue by ignoring the complaints of the phone companies.

Source: pulse.com.gh