African SIM End User Smart Card Markets

Frost & Sullivan
August 19, 2006
SKU: MC1399376
License type:
Table of Contents Related Reports
Countries covered: Africa

Research Overview

This Frost & Sullivan research service titled African SIM End User Smart Card Markets provides an overview of the mobile telephony market in Africa and a comprehensive description of its SIM requirements. The study examines key market drivers and restraints. It also details expected trends for the next two to six years. An analysis of key competitors provides the reader with in-depth market information.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sector in this research:
  • Mobile telecommunications
Market Overview

Enhanced Demand for New SIM Cards Promotes Market Growth

The mobile telecommunications sector in Africa is experiencing the highest level of growth worldwide. Subscriber identity module (SIM) cards are consequently witnessing a surge in growth. In this context, a recent Frost & Sullivan end-user study among mobile operators with operations in more than thirty African countries assesses defining trends and areas of potential growth.

While there are several reasons for the steady growth in the telecommunications market, the most significant one is the lack of infrastructure in Africa. The growing need to ensure the ability to communicate is driving the African mobile telecommunications sector towards exponential growth. The lack of a fixed line infrastructure indicates that mobile telephony is the only alternative for communication. Although the installation of mobile telephony infrastructure is still cumbersome to some extent, the alternatives presented by general packet radio service (GPRS) and satellite services serve to offset this. "Africa’s mobile telecommunications sector is witnessing an upsurge as the demand for communication increases," notes the analyst of this research service. "In such a competitive industry, SIM suppliers will need to maintain high standards of service and quality to ensure client retention."

Increased Emphasis on Low-cost Handsets to Spur Market Growth

The issuance of low-denomination prepaid vouchers is resulting in more affordable mobile services. In addition, the introduction of low-cost handsets is expected to extend access to mobile phone services among lower-end subscribers. Despite these positive trends, factors such as ongoing conflict in some regions, are limiting market expansion "Economic growth in Africa is affected by poverty and continuing conflict in certain regions," states the analyst. "Both these factors also have a profound effect on the telecommunications sector, since operating mobile services in these areas involves high risk and significant costs. In such a scenario, it will become essential to weigh these risks with the rewards."

The needs of African mobile operators are unique to the market in which they operate. As there is increased emphasis on the production of low-cost handsets, SIM manufacturers will need to ensure that they can meet the needs of operators and provide products which are both, reliable and cost effective. Respondents also pointed towards the need for higher memory density SIMs, which are crucial for the advanced applications that have been launched. The study revealed that several African countries have illustrated the potential for high growth. Nigeria, in particular, is a market offering tremendous growth opportunities due to the size of its population and the rising demand for mobile services as the country becomes more developed.


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