Thursday, 05 March 2020

Data gathered by indicates that the Chinese market accounted for almost half of the global mobile app spend at 40%. From the data, the total global mobile app spend was $120 billion in 2019.

Global mobile app spend doubles 

From the data, the total global spend on mobile apps has grown by at least double from 2016. By approximation, the Chinese spend was $92 billion followed by the United States at $50 billion while Japan is third at $32 billion. South Korea is fourth with $10 billion while the UK is fifth with $5 billion.

The total mobile spend accounts for all apps on the iOS app store, Google Play, third-party Android in China.  According to the report:

“This is an indicator that Chinese mobile application stores are growing fast, hosting more apps, and capturing a larger share of new app creation.”

Over the last year, emerging markets led by Brazil, India, and Indonesia immensely contributed to the 204 billion mobile applications downloaded. This was a 6% rise from 2018 and up 45% since 2016.

In China 95 billion apps were downloaded, followed by India at 40 billion, the United States had 12.3 billion, Brazil had 8 billion with Indonesia had 5.5 billion.  Between 2016 and 2019 India’s app download grew by a staggering 190%.

The 204 billion app downloads were dominated by industries of ridesharing, fast food/food delivery, dating, sports streaming, health, and fitness.

A review of the data further shows that from 2017 to 2019, 17% more games surpassed $5 million in annual consumer spend. The total figure for these games was 372.

In 2019, about 283 games brought in $10 million while 183 games brought in $20 million. In total, 1121 mobile games brought in over $5 million, with 140 games accounting for about $100 million in 2019.

This year, games that drive deep engagement with mobile users are expected to dominate.

Published in World

In the recent State of the Nation address President Cyril Ramaphosa hailed the South African Competition Commission’s ruling to dramatically reduce data prices as

an important step to improve lives, bring people into the digital economy and stimulate online businesses.

Late last year the Commission told dominant operators to reduce their retail prices by between 30% and 50% within two months. But will the proposed interventions produce these outcomes?

South Africans do indeed pay some of the highest prices for data on the continent. The country is ranked 19 out of 46 countries on the RIA African Mobile Pricing (RAMP) Index. The prices of the first-entrant operators – MTN and Vodacom – remain high relative to Cell C and Telkom Mobile, which dropped their prices in the first half of last year.

But the commission’s cuts in retail prices will not fix poor competitive outcomes in the market. That can only be resolved by regulating the underlying bottlenecks in the wholesale market. These include the costs of roaming and facilities leasing.

The bottlenecks are correctly identified in the commission’s summary report. It urges the sector regulator – the Independent Communications Authority of South Africa – to remedy the situation urgently.

Telecommunications regulators around the world define markets and determine dominance to design the appropriate ex-ante regulation to promote competition. Ex-ante regulations are those designed to protect consumers in the retail market by safeguarding fair competition in wholesale markets where the bottlenecks occur. They design regulations in the interest of delivering affordable user prices and efficient investments.

It’s for this reason that South Africa’s 2005 Electronic Communications Act requires the communications regulator to undertake a market review to determine and remedy market dominance. But it has failed to conclude a review for over 10 years. This would have created a more level playing field for late entrants by reducing the negative duopoly effects of MTN and Vodacom on the market. One such effect is high prices.

Prices and profit levels of the incumbents are high, as the benchmarking by the commission correctly shows. This indicates that the operators could accommodate retail price reductions. But the right price for data ought to result from effective regulation and competition in the wholesale market.

Regulator’s failures

The regulator has failed for more than a decade to finalise this critical determination. It has undertaken the market review three times at enormous public expense, twice to completion. Last year it made an interim finding on markets but failed to propose remedies for dominance.

Operators should not be penalised for their business success in a fair competitive market. But the dominance of the incumbents, MTN and Vodacom, in the wholesale market prevents the late entrants, Cell C and Telkom Mobile, from competing fairly and being able to exert pricing pressure.

This is because data quality is as important as price. Probably more so. At the height of the #datamustfall campaign South African’s continue to forgo the far lower prices offered by Cell C and Telkom Mobile for the more expensive, higher quality network of the dominant operators. This while the market share of the dominant players continued to increase at the expense of the late entrants.

Vodacom and MTN’s dominance gives them the liquidity to reinvest in their network infrastructure, extending coverage and improving quality. Vodacom was swift off the mark a few years ago. It used the profits from its successful voice business to invest in its data network. It quickly became the most pervasive and best quality network.

This enabled Vodacom (and later MTN when it had woken up to the fact that it could not milk its voice services anylonger) to attract more customers, and become more profitable. This placed the operators in a better position to enhance the quality of their networks by re-engineering their existing networks to offer competitive 4G services. This was in the absence of the regulator releasing this high-demand spectrum allocated for 4G use for over six years.

Even in the absence of anti-competitive practices, this has created a virtuous business cycle for the dominant operators. And a vicious one for smaller operators.

Unintended consequences

As welcome – or as politically expedient – as the commission’s decision is for cash strapped consumers there are several possible unintended consequences of the retail price intervention.

If the communications authority doesn’t address the wholesale issues urgently, the outcome could be that Vodacom and MTN, with dramatically reduced prices, will attract price-sensitive users from the late entrant networks. This would leave Cell C and Telkom Mobile unable to compete on either price or quality.

With dominant operators’ prices more attractive, and late entrants unable to address critical quality challenges, this will intensify the factors driving subscribers to the dominant operators networks.

The public focus has been on the mandatory retail price reductions for operators and the immediate relief it would provide to consumers - but policy makers and the regulators should consider possible unintended consequences of this intervention for the critical sector to the new economy.

Undoubtedly, one possible outcome is the inhibition of critical network investment. R70 billion of MTN and Vodacom’s significant surpluses have gone into network investment over the past three years. This is despite not receiving any new spectrum during this time.

Although prices are indeed too high – and the profitability of the dominant operators is excessive – their significant role in the economy has to be recognised and carefully managed. The lack of signalling by the commission of the nature and extent of the remedies imposed hit the share prices of Vodacom and MTN.

There is no benefit in this for anyone, least of all the country’s fragile, zero-growth economy. Of particular concern is that it may result in negative investor sentiment while still failing to address the underlying reasons for the high communication costs in the country.

The commission was at pains to point out that its intervention was a response to the absence of effective regulation by the communications authority in the wholesale market. This included the critical issues of releasing the high demand spectrum that has stifled cost-effective 4G deployment in South Africa..The Conversation


Alison Gillwald, Adjunct Professor, Nelson Mandela School of Public Governance, University of Cape Town

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Telecoms
Nepalese Prime Minister KP Sharma Oli on Wednesday underwent surgery for a kidney transplant at a government hospital in Kathmandu

This is the second transplant since he was diagnosed with renal failure 13 years ago, doctors involved in the surgery said.

A team of surgeons led by Prem Raj Gyawali performed the operation at Tribhuvan University Teaching Hospital, according to the hospital’s Managing Director, Prem Krishna Khadga

“His vitals are good and his transplanted kidney has started working,’’ Khadga said in a statement.

Oli, 69, received his first kidney transplant 13 years ago in India.

The prime minister was flown to Singapore in September after his transplanted kidney showed symptoms of dysfunction.

He has been undergoing weekly dialysis since then.

Oli, leader of the ruling Nepal Communist Party, came to power after a coalition of communist parties won parliamentary elections in late 2017.

Published in World
Nigeria overtakes South Africa as Africa’s biggest economy.

As if a recession wasn’t enough bad news for South Africa, it’s now confirmed as the continent’s second-largest economy.

The answer to the question of whether South Africa or Nigeria, the two countries that account for almost half of sub-Saharan Africa’s gross domestic product, is the biggest economy on the continent has long depended on which exchange rate you use for the West African nation. But now both the official naira rate of 306 per dollar and the weaker market exchange rate of around 360 that almost all investors use put Nigeria tops.

Nigeria’s economic growth beat forecasts in the fourth quarter, helping its economy to expand the most in four years in 2019 as oil output increased and the central bank took steps to boost credit growth. GDP in the West African country stood at $476 billion or $402 billion, depending on the rate used.

South Africa’s economy went in the opposite direction.

It slumped into a second recession in consecutive years, contracting more than projected in the fourth quarter as power cuts weighed on output and business confidence. For the full year, expansion was 0.2%, the least since the global financial crisis, and even less than the central bank and government estimated. Based on an average rand-dollar exchange rate of 14.43 for the year, GDP was $352 billion.

Projections show Nigeria’s economy will continue to grow faster. While the International Monetary Fund cut its forecast for Nigeria’s 2020 growth to 2% from 2.5% last month due to lower oil prices, South Africa’s GDP is forecast to expand only 0.8%.

Published in News Economy
The United Nations Economic Commission for Africa (UNECA) has shifted the date for the 2020 edition of Conference of (African) Ministers of Finance, Planning and Economic Development, as a precaution against COVID-19.
The decision is contained in a statement made on Wednesday in Lagos by the Communications Section of UNECA.
The body has, however, not released fresh timetables for the conference and its other events.
The 53rd session of the Conference was earlier scheduled to hold in Addis Ababa, the Ethiopian capital, from March 18 to March 24, 2020.
The statement read: “Following global health concerns pertaining to the COVID-19 and the need for added vigilance, upon consultation with partners, the ECA will postpone all its public meetings until further notice.
“These include the 2020 Conference of Ministers of Finance, Planning and Economic Development.
“ECA will reach out to ministers to discuss member states preparedness,” the statement read in part.
The ECA said that the theme of the conference: “The future of Africa: Industrialisation in the digital era’’, recognises Africa’s desire to industrialise and create jobs for its populace, particularly the youth.
The body explained that, while the fourth industrial revolution, presents challenges for countries in Africa, it also offers an opportunity for boosting competitiveness and industrial leapfrogging.
More than 3,000 people worldwide had died from Covid-19 and no fewer than 90,000 others infected in over 45 countries.
Most of the death and those infected had been recorded in China.
However, Europe and the Middle East had been reported to have recorded rising cases more than China while the first infection in Latin America was recorded on Wednesday in Brazil.
A few cases have surfaced in Nigeria, Algeria and Egypt, despite the continent’s close economic ties with China.
Published in World
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