Mobile internet on course to becoming top earner for firms

Access to the internet through cell phones is set to emerge as a significant revenue opportunity for mobile operators, analysts say, adding that consumers are also benefiting immensely from the convenience of portable internet.

Statistics covering October to December last year by the Communications Commission of Kenya (CCK) placed mobile data subscribers at 1,981,048, up from 1,864, 991 in the previous quarter.

Cell phone internet subscribers make up a majority of the mobile data category which also includes access to internet through computers using the plug and play modems.

According to Opera, a software company that studies trends in mobile browsing, Opera Mini alone — controlling 30 per cent of the global mobile browser software — mobile internet users generate more than $4 billion per year for operators globally, using an average pricing of $1 per megabyte.

Win-win situation

“When people browse more, it is a win-win situation as operators receive more revenue, users have more incentive to upgrade their data plans, and people get the Web pages they want in an efficient and affordable manner,” said Jon von Tetzchner, CEO Opera Software.

Kenya has emerged as a leader in mobile internet use in Africa.

A snapshot study by Opera for the month of December last year showed Kenya had the most intensive mobile internet users in Africa, with each user browsing an average of 525 pages each month.

According to the study, the number of unique users grew by 246.2 per cent in the year to November 2009 while page-view grew by 615 per cent in a similar period.

Compared to findings of a similar study in April last year, Kenya had moved up one place to number three in the top 10 African countries with the highest users of mobile internet.

Ghana and Kenya led the top 10 African countries in terms of page-view growth at 4,348.6 per cent and 615.4 per cent respectively.

This means that in the wider scenario, mobile internet use is much higher.

With overall internet penetration estimated at 10 per cent, mobile subscribers still find it cheaper and more convenient to access internet using their mobiles.

This is driven by the cheaper cost of acquiring and maintaining the handsets compared to laptops or desktop computers, though the prices of these items are slowly falling as operators move to subsidize their cost in a bid to push uptake of their internet offerings.

Mobiles with internet capability are retailing from a few thousand shillings while laptops retail from at least Sh26,000.

It may also be cheap to browse using a mobile.

As almost all subscribers are on pre-paid tariff plans, one only pays for data consumed, eliminating fixed costs subscriptions.

Consumers can get the best mobile data bargains though analysts say operators are still maintaining excessive rates for mobile internet.

Yu has one of the cheapest mobile data charges at Sh3 per megabyte (MB) while others have various packages, bringing the pricing range between Sh10 to Sh20 per MB.

Safaricom, the only operator with a 3G service, has a headstart in the mobile internet niche.

The superior data technology offers faster internet connections compared to earlier platforms like EDGE and GPRS.

Given the projected rise in smart phone use, having a 3G network is a major competitive advantage.

The potential growth in mobile internet has not been lost on operators.

CCK reports that investment in mobile data has grown at the expense of fixed internet offerings.

Investment declined

Investment in mobile data and Internet last year recorded growth to reach Sh1.5 billion from Sh1.2 billion in 2008, representing a 23.1 per cent increase.

However, investment in fixed network revenue and investment declined in 2009 to Sh50 billion from Sh52.4 billion in 2008.

As average revenue per user (ARPU) continues to fall, analysts say the steady growth of mobile subscribers continues to offer incentives for investment in mobile data to supplement revenues from the dominant voice services.

CCK reports that ARPU fell from Sh425 in 2007 to Sh376 in 2008 and down to Sh362 last year.

As of December last year, mobile subscribers stood at 19.3 million, representing a penetration rate of about 50 per cent.

“This trend can be explained by among other factors, the reduction in the cost of mobile handsets as well as the low value of prepaid calling cards,” CCK said.