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African Handset Sales to Continue Rising After Subscriber Base Flattens

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The mobile handsets market in sub Saharan Africa will continue to achieve high growth long after the number of mobile subscriptions has started to decline. This will be true particularly for the low end devices segment, although rising migration to middle and high tier devices by both existing and new subscribers due to price declines will also support market expansion.

New analysis from Frost & Sullivan finds that over 139 million handsets were shipped to sub-Saharan Africa in 2007 and this is expected to reach 400 million by 2014.

"High growth in the new subscriber base is currently spurring demand for mobile handsets," says Frost & Sullivan Industry Analyst Spiwe Chireka. "Growth in the low-end devices sector is increasing the availability of relatively affordable handsets."

Mobile subscription growth in sub-Saharan Africa is higher than the global average. Several handset vendors have concerted their efforts to expand their low-end device offerings to more effectively penetrate the region.

However, mobile network capabilities in the region still lag far behind that of devices. As a result, users in the region are deprived of a complete experience, despite significant improvements in the devices to support various applications.

Additionally, most devices are designed to better support data and broadband applications, and the high cost of these services limits the uptake of the devices designed for this purpose. Therefore, low-end devices remain the key driver of growth in this region.

Most mobile networks in sub-Saharan Africa offer only voice and SMS-centric services. Though there are various applications on devices that could enhance user experience and encourage usage and adoption, they are very expensive, further reducing the uptake of some middle and high-tier devices.

"The current middle-tier devices should become the new low-tier devices in the region, in terms of price and functionality," concludes Chireka. "Through affordable devices that can support a wider range of data applications, vendors can effectively tap into a fast emerging segment in the region while enabling operators to increase their average revenues per user (ARPU) and data services usage, resulting in a win-win situation."

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