Africa: an untapped opportunity for Middle Eastern startups

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Cellular penetration in Africa is growing at a rate of around 4.2 percent – a rate unequalled anywhere else in the world. In terms of mobile internet adoption, the picture is similar; it's expected that the number of smartphone users in Nigeria will rise from the current figure of around six million to more than 35 million by 2017.

The numbers are part of the following in-depth report investigating the state of the African telecoms market, just released by TA Telecom.

With the Arab market becoming more saturated everyday, those unmatched growth rates of technology adoption and usage in Africa reveal why expanding south, into African markets, might be a huge untapped opportunity for startups in the Middle East.

The report indicates that the majority of mobile phone connections in Africa – 62.7% – are still basic 2G voice and SMS services; only 11% of customers on the continent have access to a 3G connection. Further, data services including SMS have been growing at a very healthy 67% over the last few years.

The report anticipates a bright future for mobile internet-based applications and services in Africa, with the arrival of more affordable smartphones, wider 3G coverage, and lower data tariffs. It's expected that African mobile service providers will be seeking new partnerships to profit from the shift in consumer behavior, which in turn presents an opportunity for companies looking to expand in Africa.

Technology startups in North Africa and the region as a whole might do well to begin setting their sights on the growing African market. Their geographical proximity to sub-Saharan Africa, and their experience developing and deploying mobile apps and value-added services to local markets with similar economic conditions makes regional startups prime candidates for partnership with emerging sub-Saharan Africa.

A previous example of technology startups that successfullly cloned their profitable businesses in Middle Eastern and African countries is Rocket Internet, which maintains a number of successful projects in Egypt and Morocco, as well as Nigeria.

Check out the full report attached.

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