[AfrICANN-discuss] African internet market poised for growth

[Mawaki Chango]

Hi,
I must have missed something here:

> Developing a sound market share in the limited market base
> characteristic of
> Africa needs product differentiation to increase consumers'
> switching costs.

I seemed to think that in our IP world, nobody would any longer
recommend increasing switching costs as a viable market solution
- especially for growth and competition. Granted, the market
base is limited, but why not recommend some creative
diversification in the offerings (without any lock-in effect),
and above all, a quality customer service to retain and grow
market share? Why would one want to advise locking in customers
with higher switching costs? Is this just about businesses
making money, no matter how, or also about people enjoying
better access to communications and good service?

Best,

Mawaki

--- Anne-Rachel Inné <annerachel at gmail.com> wrote:

> African internet market poised for growth
> 
> Growth levels in double digits but penetration still low
>  Ian Williams, vnunet.com <http://www.vnunet.com/> 19 Oct 2007
> 
> http://www.vnunet.com/articles/print/2201554
> 
> The market for internet access and services in Africa is
> growing fast, but a
> number of hurdles still remain, according to research from
> Frost and
> Sullivan <http://www.frost.com/>.
> 
> Growth rates for internet use in Africa are in the double
> digits but have
> been predicated on a narrow base, and the overall number of
> internet users
> remains limited.
> 
> However, the low penetration rates indicate a huge potential
> market for
> internet services.
> 
> ISPs and governments are gradually designing new strategies,
> but are having
> to cope with restrictive licensing regimes, poor telecoms
> infrastructure and
> low affordability of services.
> 
> However, governments and private telecoms operators are making
> significant
> investments in infrastructure in an attempt to exploit the
> potential of the
> African internet market.
> 
> "The African internet services market is growing," said Spiwe
> Chireka,
> research analyst at Frost & Sullivan.
> 
> "Most governments have embarked on ICT-led development
> strategies aimed at
> developing e-governance and, subsequently, internet
> penetration."
> 
> Chireka predicts that markets such as Kenya, Tanzania, Uganda,
> Senegal,
> Angola and Mozambique are set to enjoy high growth levels.
> 
> These countries enjoy technology-neutral licensing regimes,
> independent
> regulators, high levels of foreign investment and highly
> liberalised
> markets.
> 
> On the other hand, Ghana and Nigeria have high growth
> potential, but this is
> hindered by poor economic performance and prohibitive
> licensing regimes
> which have limited foreign investment into these markets.
> 
> The main factors dampening uptake are widespread poverty that
> makes internet
> services unaffordable, low literacy levels that limit demand
> and high
> operating costs that continue to keep service prices high.
> 
> Furthermore, poor telecoms infrastructure is hindering
> penetration rates
> even as the restrictive regulatory frameworks contain market
> growth.
> 
> "ISPs will need to consolidate their efforts and create
> strategic
> relationships with cellular operators," said Chireka.
> 
> "The further development and increasing penetration of
> cellular networks
> would allow ISPs to offer mobile internet access and boost
> penetration of
> their services, thus reducing the high initial investment
> costs."
> 
> At the same time, mobile handset operators need to partner
> with ISPs to
> provide affordable tools for mobile internet access.
> 
> Developing a sound market share in the limited market base
> characteristic of
> Africa needs product differentiation to increase consumers'
> switching costs.
> 
> 
> "In addition, ISPs need to target markets outside the major
> urban areas
> which are saturated in terms of operators," added Chireka.
> 
> "Partnerships with cellular operators would go a long way to
> address this
> challenge. Low cost and high speed access will also be crucial
> to ensuring
> market growth."
> Permalink to this story <http://www.vnunet.com/2201554>
> www.vnunet.com/2201554
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