Overcoming Excessive Mobile Data Costs in Africa

There is no doubt that mobile is an important, if not the most essential, medium for brands to engage with consumers. This is particularly relevant in emerging markets like South Africa, where mobile is not only a consumer’s first Internet device, in most cases it is their only Internet device.

The Problem

There are three main hurdles that stand in the way of mobile brand — consumer engagement:

  1. Internet access (largely driven by number of mobile data connections)
  2. Internet usage cost (largely driven by cost of data)
  3. User experience

1. Internet Access

African Internet usage is typically mobile only, hence the proportion of consumers who are connected to the Internet depends almost exclusively on the Mobile Data connection penetration. As an example, South Africa has around a 50% Mobile Data connection rate, compared with typical western rates of between 90–100%. See below.

Given that the mobile phone ownership in South Africa is currently 92% around 40% of mobile users are deliberately refusing to use their Mobile Data connection — in most cases because of the high cost of data.

In order for brands to engage with consumers, there needs to be an open communication channel. The Mobile Data channel is currently closed for a large proportion of the consumer base.

2. Internet Usage Costs

For brands to effectively engage with consumers, there needs to be as little friction as possible. If a communication channel is restricted, it reduces the ability for effective engagement and most certainly restricts the quantity and duration of consumer interactions.

As can be seen in the chart below, South African mobile users use on average 600KB of Mobile Data per month. This compares with typical developed market Mobile Data usage of about 2GB.

It should also be noted that developed market users typically also have easy and cheap access to other Internet connections such as Wi-Fi at home or at work, which means that the disparity in overall Internet data consumption between emerging and developed markets is far higher in reality (the so-called “Digital Divide”).

Another interesting point to note in the chart above is the relatively high monthly Mobile Data usage for Indian consumers. This recent rise in usage can be attributed directly to the massively reduced cost Mobile Data deals offered by the Jio network in India.

So why such a difference? Let’s dig deeper into the actual costs. The chart below shows the cost of 1GB of Mobile Data as a ratio of Per Capita GDP for a selection of developed and emerging nations, but excluding Africa. The US and other developed markets are the lowest cost countries, with India, China, Brazil and African nations a lot less affordable for the average consumer. Zimbabwe has been excluded because it is an outlier with 1GB costing an incredible 18% of monthly per capita GDP!

To simplify the comparison, the chart below shows the average rate for developed markets against South Africa and Africa as a whole. The relative cost to access the Internet is at least 3 times higher in South Africa and at least 7 times more (on average) in Africa.

It is important to note that the above charts are based on Per Capita GDP ratio, which does not reveal the true extent of the problem. Since the level of Income is markedly lower in emerging markets, it is clear that the level of Disposable Income for these consumers would be far lower than their developed market counterparts — putting even more pressure on the affordability of Mobile Data.

3. User Experience

Given the problems above, some brands and advertisers work around these issues by using alternative communication channels or by drastically reducing the quality of engagement. Examples of this are the ubiquitous SMS and email marketing (or spam) that result in little to no conversion, and virtually no opportunity for ongoing engagement.

A recent article in Adweek made the case that mobile marketers need to put the user experience above all else: “Mobile is not a channel. It is a fundamental part of our lifestyle. It’s how we communicate, how we spend time and, more and more, how we transact.”

Therefore, mobile content and services need to be high quality, the content needs to be highly valued, and the delivery must be fast and easy to use for the end consumer.

Balancing these needs with the access and cost constraints mentioned previously make this an extremely tough nut to crack.

Solutions

There are few ways for consumers to reduce data costs without sacrificing the experience:

  • Consumers can restrict their devices to only access the Internet via Wi-Fi. This allows them to connect to the Internet either for free (at free Wi-Fi locations such as airports and cafes) or at home/work at a vastly reduced cost. However, the unfortunate reality is that in emerging markets, such facilities are few and far between.
  • Consumers can make use of data efficient browsers such as Opera Mini, to reduce the data usage and therefore cost of Internet usage. Data usage is still unpredictable for the user however, and it is difficult for the content publisher to fully control the user experience.
  • Consumers can take advantage of content that is zero-rated, i.e. free to use. This means that there is no cost to the end user, and the consumer can access content even with a zero Mobile Data balance.

Many companies are turning to the services provided by #datafree — an organisation that provides a platform for building rich mobile content experiences delivered at zero cost to the end user. The content is highly optimised and cached which markedly reduces the data consumption of the apps. The cost of data used by the apps is covered by the publisher. Below is a small selection of content currently available on this platform at zero cost to the user.

#datafree apps already available in Google Play

Conclusion

Services such as #datafree are breaking down the barriers of high Mobile Data costs and may ultimately pave the way for more ubiquitous use of the Mobile Internet in developing markets across the world. This in turn, will open up opportunities for education, communication and more inclusion in the economies within which these consumers live and participate.

This approach opens up a compelling opportunity for brands and businesses to access and build relationships with previously inaccessible consumers, or to build richer, stickier and more engaging experiences with new and existing Mobile Internet users.

References

South Africa Has 21 Million Internet Users, Mostly On Mobile

Top countries in the world by mobile data usage per month

Optimising mobile data usage in Africa is key

What is #datafree?

AGENCIES: IT’S TIME TO DRIVE A MOBILE-FIRST STRATEGY FOR BRANDS

Why brands need to wise up about mobile marketing in Africa

Marketers Need to Stop Looking at Mobile as a Channel. It’s a Lifestyle

List of countries by GDP (PPP) per capita

List of countries by number of Internet users