Africa and the Middle East (AME) — a region in which we include Africa, the Gulf, the Levant, Iran and Turkey — is an area blessed with many active mobile operators and almost complete mobile coverage of urban areas, combined with little to no wireline infrastructure in many markets. It is by now very clear that the result of this combination will strongly favor mobile broadband, but the region’s operators are only just beginning to feel their way towards the tariff levels and structures that will work best in the AME’s overwhelmingly prepaid, largely low-income markets. Clearly, the all-you-can-eat, postpaid-oriented and subsidy-based plans which have historically been the default in wealthier regions will be ill-adapted for use in developing markets.
The absolute number of data card users in AME is still very small — by far the lowest out of any region worldwide — but data card adoption is growing no less robustly in AME than elsewhere in the world. However, mobile operators in AME typically have much less extra network capacity than their peers in the developed world, and they must therefore be careful right from the start to adopt pricing strategies that will maximize revenues without clogging their networks.
In order to get an idea of what common trends might be emerging now that over half of all African markets have 3G, we looked at the mobile broadband prices offered by 36 different operators in 15 very diverse AME markets. Our analysis begins by briefly summarizing the opportunities and risks for operators offering mobile broadband, and then examines the current and forecast size of the mobile broadband market from 2009-2014. After discussing the common patterns in mobile broadband pricing that have emerged across the region so far, and then the areas in which operators’ strategies still diverge significantly, we look in detail at the available packages in Saudi Arabia and Nigeria, home to some of AME’s most experienced mobile broadband providers. As AME operators seek to increase their share of the $1.5bn mobile broadband market without exceeding their networks’ capacities, some consensus seems to have emerged around the optimal tariff-levels for basic monthly broadband plans, but operator strategies still vary widely in terms of how best to price services for very-low-usage subscribers.
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