African phone industry set for World Cup surge

Topics

JOHANNESBURG - South Africa's mobile phone advertising industry will be strongly boosted by the 2010 World Cup, a U.S.- based research group said on Wednesday.

JBB Research said it expected advertisers to use mobile phone devices as a key platform during the month-long World Cup which starts on June 11.

Mobile advertising is expected to be the key driver of the UGC (user generated content) market in South Africa as the country prepares for the world's most watched sporting event.

The country's UGC market - which includes advertising funded social networking, chat and dating services like Facebook and MXit - is expected to grow to 24 million users and $476 million in revenue by 2013 from a current 14.2 million customers and $195 million in revenue, JBB said.

"Many advertisers want to take advantage of this global event. At the end of the day, this could mean more money toward mobile advertising," JBB analyst Julien Blin told Reuters.

"During the World Cup, you will see the emergence of various advertising funded mobile UGC applications ... featuring video streaming and video-based mobile blogging capabilities."

Vodacom, South Africa's biggest mobile phone operator, which is owned by British Vodafone, has the largest portfolio of advertising-funded mobile services such as The Grid.

"The other carriers are lagging behind," Blin said.

Despite the potential, JBB warned that for the UGC market to reach its potential, South Africa needed to overcome the high cost of multimedia-capable handsets, and lack of return on investment from operators in existing mobile data services.

"I think the World Cup is going to offset most of these inhibitors," Blin said, predicting that digital video broadcasting-capable handsets are likely to be commercially available in South Africa by the end of this year.

"Instant messaging-based enhanced chat services like MXit, MTN's noknok, Vodacom's Meep and Facebook have gained traction over the past few years, Blin said.

"In fact, most young South Africans do not speak on their phones," Blin said. "Instead many of them use those mobile social networking services to communicate with each other."