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Whatsapp May Put Pressure On Already Declining Africa Mobile ARPU

05 April, 2014

Source: ICT Africa

Africa Mobile operators may encounter reduced ARPU due to the recent acquisition of WhatsApp by Facebook. According to Fitch, an international think tank, intense pressure on mobile service providers across the globe will arise because of the announcement that the messaging service would expand to include voice calls on what was previously an instant messaging service.

The popularity of Whatsapp in Africa, which boasts over 9 million active users in South Africa alone, and its current move that will make it an over the top operator similar to Skype is likely to create an unnerving situation for mobile operators, especially those that rely heavily on voice for their revenue streams.

The graph below, which we published in an earlier article, shows that Africa mobile ARPU is already taking a nose dive. The key driver for the decline is voice and companies that rely entirely on voice in their product mix are facing steeper declines.

Africa Mobile ARPU Declining

Sadly, according to Budde Research, Mobile operators in Africa make up to 70% of their revenue from voice. It is perilous for any operator in Africa to be holding on to voice as a main source of their revenue. This could be exasperated by the Whatsapp development, making those who fail to move quickly to include data, video and other value added services in their offerings to face relegation.

We are cognisant of the challenges African operators face when considering offering more data services. These include the poor quality of service as discussed in a number of ICT Africa articles. While Africa can now boast of over 700 Million mobile lines, most of them are not high capacity capable. It is imperative that operators do whatever it takes to address the QoS issue and quickly offer more data, video and other services.


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