18 January 2013

Kenya: Tech Predictions for 2013 - Kenya Not Far Off

This week, Deloitte Global released some major predictions for the technology, media and telecommunications sector for 2013.

The likely developments over the next 12 to 18 months that are likely to have significant medium to long-term impacts for companies in the sector, other industries as well as consumers.

They were mainly drawn from what has been happening in the last few years.Some of these predictions are not very far from what is likely to happen here in Kenya.

The year for LTE adoption

According to Deloitte, more than 200 operators in 75 countries will have launched a Long Term Evolution network by the end of 2013. This will also see subscriptions pass the 200 million, a 17‐fold increase in just two years.

About 300 LTE devices (smartphones, tablets and dongles) should be available by year‐end, including a range of sub‐$100 (Sh8,500) smartphones. However, the report says it will be a year of momentum for LTE, rather than completion: at the end of 2013 the vast majority of 1.9 billion smartphone customers are likely still to use 3G and 2.5G devices.

The Kenya government last year gave its nod to a consortium of nine private firms to partner with it in implementing the 4G roll out. And even though there are no adequate LTE enabled devices in the market, they are starting to flow in.

A billion Smartphones

In 2013, the consulting firm predicts that global shipments of smartphones will likely exceed one billion units and close to two billion devices by year‐end.

The absolute number of those exploiting the full breadth of a smartphone's capability is likely to increase, but the proportion and absolute number of those using only the basic functionality of a smartphone - voice, text and photos - is also likely to rise.

Kenyans are already fast adopting smartphones. This was boosted by the introduction of lower-prices gadgets in the market.

Mobile advertising split

Deloitte predicts that in 2013, what is currently described as "mobile" advertising will get split into two categories representing two similar but distinct devices - tablets and smartphones.

The smartphone sector may generate about $4.9 billion (Sh416.5 billion) in revenues, while advertising on tablets may be worth about $3.4 billion (Sh289 billion). Mobile advertising has traditionally grouped tablets and smartphones together because of their many similarities.

Apps offers

More mobile operators will offer all‐you‐can‐eat services with unlimited access to specific applications. All‐you‐can‐app will, for a fixed monthly subscription, offer unrestricted use of each service's content, with connectivity charges bundled in.

This aimed primarily at customers interested in, but hesitant about, mobile data usage, due to worries about running up large data charges. Operators are also likely to partner with existing third party companies to jointly offer AYCA services, as well as create their own. Local operator Safaricom has already announced plans to launch its 'Safaricom store' that will prioritise local apps.

The spectrum issue

Deloitte predicts that although additional spectrum will continue to be made available in 2013 in many

global markets, spectrum exhaustion will continue to exacerbate in many countries, especially in dense urban areas. The demand for additional spectrum is tied directly to the seemingly insatiable consumption of wireless broadband communications.

Wireless traffic has more than doubled each year since 2009. The shortage, the report says, can be solved by either reallocation of frequency bands to operators or making more efficient use of limited spectrum.

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