BuzzCity CEO on the rise and future of Africa’s mobile marketplace

Mobile in Africa is a well-documented juggernaut. In late 2012, Africa was well on its way to reach 750 million mobile subscribers and the number is expected to rise to one billion by 2015. Recent forecasts from Cisco revealed that the number of mobile devices will tip seven billion in 2013, outnumbering the human population, thanks to growth in developing areas, such as Asia, the Pacific and Africa. It’s a pretty good time to be involved in a mobile startup.

Whether coming via an international competition, or an industry report, the message is clear, Africa’s mobile sector is an ever-expanding pool of opportunities for entrepreneurs.

A recent report from mobile advertising network BuzzCity, underlines the growth in Africa’s mobile industry. BuzzCity’s network grew by 67% in 2012 to serve 210.8 billion ads on mobile devices around the world. In the fourth quarter of last year alone, the company recorded 59 billion ad banners across its network of more than 10 000 publisher sites, to reach over 300 million unique users per month. Launched in 1999, the ad network has become well positioned to deliver trend information in the regions that it covers, which includes key African countries such as South Africa, Nigeria and Kenya.

BuzzCity co-founder and CEO, Dr KF Lai, shared some key findings of the report to provide insight into Africa’s mobile marketplace.

South Africa

Ads served in South Africa saw an overall growth of 57% in 2012 and smartphone penetration has grown to 32%. Usage is expected to grow with the benefits of reduced bandwidth costs and improved infrastructure in the country. Monetisation opportunities for domestic publishers are also predicted to rise as demand for content increases.

Nigeria

Lai calls Nigeria’s growth “phenomenal” and points to three quarters of double-digit growth that led to a year on year annual growth of 68%. Although Nokia phones still dominate the market, 39% of ads were served on Nokia devices, compared to 62% previously. White box or unbranded phones (30%) continue to gain popularity (previously 24%). Smartphone penetration remains modest (10%) in relation to the rest of the world and advertisers are targeting feature phones users before they migrate to smartphones.

Kenya

Despite softening demand at the end of 2012, Kenyan traffic saw growth of 45% year on year. As with Nigeria, smartphone penetration remains low at around 12% with Nokia and white box phones topping the charts.

Lai highlighted emerging “growth hotspots” in continental Africa where its network saw high activity: Ghana(61%), Tanzania (81%) and Egypt (14%). Lai said that Egypt in particular has a relatively high smartphone penetration (33%) and nearly 70% of Egyptians prefer to surf with their smartphone.

Having said to have leapfrogged the PC era, Africans are using smartphones in innovative ways. Across Africa and Asia, “mobile phones are used less for talking and more today as platforms to support daily living,” writes Robin Renee Sanders, a former US Ambassador to Nigeria, who argues that creative apps and mobile services are improving people’s quality of life.

Lai highlights the success of mobile banking and micro financing and predicts that mobile healthcare will develop and grow in much the same way; by solving the problem of accessibility. Lai also points to South Africa’s MoMaths, a teaching tool that targets users of a popular instant messaging platform as well as an NGO called Refugees United that “offers a safe, secure and anonymous way to find family and friends”.

So what does this mean for the future of mobile in Africa?

Lai believes innovation is key. “Consumers are still willing to do more with their mobile phones, in fact we have seen an increase in mobile commerce, particularly for physical purchases in South Africa (33%). If this continues transactions for physical products may outpace mobile entertainment content this year. In addition, with the reduced cost of bandwidth and infrastructure continuing to improve over the coming year we will certainly see this reflected in economic growth of the region,” says Lai.