Two-thirds of South Africans will be online by 2017 as mobile data booms

The digital economy will expand rapidly across all of Africa in next five years, new research has found - especially online advertising.
Written by Adam Oxford, Contributor

Almost two-thirds of South Africans will have a mobile data subscription by 2017, more than doubling the number of people online in the country today, research has found.

According to PwC's annual South African Entertainment and Media (E&M) Outlook, the number of people with a mobile data subscription in South Africa will rise from 29 percent of the population today to 62 percent by 2017. The report also predicts that the number of mobile data subscriptions in Nigeria and Kenya will rise from four percent in both countries now to 23 percent and 24 percent respectively over the same timescale.

By comparison, the number of households with fixed-line broadband access will remain low, at around 24 percent for South Africa, 12 percent for Nigeria and just four percent in Kenya by 2017.

Mobile gaming will be one of the biggest beneficiaries of increasing mobile data subscriptions, Vicki Myburgh, E&M industries leader at PwC, said while the market for 'freemium' games on smartphones will grow by 20 percent over the next five years. According to PwC's figures that would make it bigger than either the markets for music or films in South Africa, with total revenues of R3.1bn ($320m).

"Companies that are agile and can adapt to change are the ones that will win," Myburgh said, "for example, the market for digital books [in South Africa] is growing at 47 percent".

Myburgh said that South African consumers are highly responsive to mobile advertising too.

"Thirty percent said that they are happy to receive advertising on smartphones, which is very good news for the industry," she said.

Myburgh also highlighted data usage as a challenge for the industry. While South Africans are generally happy to share information with digital media owners, they expect something in return — such as exclusive offers and discount vouchers — and are increasingly careful about their privacy.

"There's a lot of consensus that there's value in big data," she said. "What's less clear is how to get at that value. 'Small data' is more important these days, identifying what customers want and leading them to it... while at the same time respecting their privacy."

Despite rapid growth, however, digital media will remain a small part of the whole E&M sector in South Africa. Even by 2017, PwC predicts that online advertising will account for just eight percent of the total spend. According to the latest figures from eMarketeer, by 2017 over 36 percent of advertising money will be spent online.

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