Tax incentives for internet services needed

This expansion will be driven primarily by demand for mobile voice and Internet services‚ said Frost & Sullivan. In 2010 there were 181.7-million mobile and fixed telephony subscribers and 29.8-million Internet subscribers in the region.

In South Africa Vodacom‚ Telkom‚ MTN‚ FibreCo and Cell C are spending billions on rolling out new high speed networks to increase capacity and resolve the demand for faster broadband Internet. In the past four years several undersea cables were connected in Africa resulting in a slight reduction in wholesale bandwidth prices.

"The growth of voice and Internet markets in Africa is expected to be driven by a decline in retail price for these services‚" said Frost & Sullivan's information and communication technologies business unit leader for Africa‚ Chantel Lindeman.

Operators in the region are investing significantly in mobile infrastructure‚ including base stations and transmission networks.

"It is expected that this will result in the availability of higher network capacity at lower cost‚ with operators spurring growth by passing savings on to the users‚" said Lindeman.

MTN SA's chief technology officer‚ Kanagaratnam Lambotharan‚ on Tuesday reaffirmed the importance of investing in infrastructure that enables seamless, converged communications.

Lindeman highlighted that the key challenge facing service providers in Africa is the low disposable income of the majority of users who cannot afford high-priced devices or expensive subscriptions.

She says service providers should encourage governments to offer tax subsidies on mobile phones‚ laptops and smartphones to lower the cost of access to Internet services. In addition‚ operators need to extend their range of Internet access packages to accommodate more consumers‚" said Lindeman.