Issue 77 Telemedia Magazine

Unlocing Africa: how to tap into the biggest untapped global mVAS market

Africa has the potential to be one of the world’s leading mVAS markets – so long as network investment keeps pace with consumer desire to engage with the digital economy.

The African market for mobile value-added services (mVAS) in 2025 is experiencing substantial growth, driven by increasing smartphone adoption, expanding mobile internet access and the proliferation of mobile financial services and payments. Games alone generate nearly $2 billion in revenues in Africa in 2024 and, if you consider the wider mVAS market that encompasses this and all other fun and useful mobile services, the total is in the many millions.

While it is easy to think of Africa as a single emerging market, it is in fact made up of 47 separate countries, all with varying needs and demands and each at its own stage in exploiting mVAS. So, what is driving these huge potential markets, where are the hotspots and how can telemedia tap in?

MARKET SIZE AND REVENUE

The African mVAS market is projected to generate billions of dollars in revenue by 2025, with the lion’s share of contributions coming from mobile financial services, entertainment and various flavours of ecommerce. But it is building on a sector that is already quite strong in many parts of the market.

In Southern Africa alone, communication services generated $17 billion in 2024, with annual growth projected at 2.3% through 2028. Ethiopia’s mVAS market is expected to grow from $1.43 billion in 2022 to $7.48 billion by 2031, reflecting a CAGR of 20.14%. Nigeria’s telecom market was valued at $9.1 billion in 2022 and continues to grow at a CAGR of 4.6%.

On the other hand, markets such as Zimbabwe, which is experiencing high-inflation and limited economic momentum are struggling to grow their wider economies, which in turn hampers network and smartphone penetration, and so mVAS growth is also restricted and is likely to remain so for some time to come.

USER BASE GROWTH

However, Africa is a thriving market. Smartphone adoption surged by 24% in early 2024, with countries like Nigeria (42% increase in smartphone shipments), South Africa (19%) and Egypt (39%) leading this growth.

Mobile financial services are a key driver of mVAS adoption. For instance, MTN’s MoMo app connects more than 200 million wallets across 24 African countries, with transaction values jumping from $76 billion in 2018 to $204 billion in 2022.

Mobile money services form the bedrock of this growth. Airtel Africa, for example, reports a 29.6% increase in mobile money revenues year-on-year by March 2023. By now, while numbers are hard to come by, this is likely much higher.

And then there is M-PESA. M-PESA is Africa’s most successful mobile payment service, having debuted in Kenya in 2007 and grown to become a key driver of financial inclusion with millions of customers in seven countries.In 2024, M-PESA contributed 42.9% of parent company Safaricom’s service revenue, totalling $600 million, a 16.6% increase over the previous six months.

This service, perhaps more than any other, is what has made mVAS in Africa possible: allowing millions of unbanked consumers to sample the digital economy and they have really taken to it.

CHALLENGES ABOUND

However, there are challenges to growth across the continent. Countries like Ethiopia and conflict zones such as Sudan face slower growth due to limited infrastructure and economic instability that go with emerging markets. Regulation – too much and too little – can also be a barrier to growth.

For instance, while Ethiopia’s mVAS market is growing rapidly due to urbanisation and improved telecom infrastructure, rural areas remain underpenetrated due to limited network coverage. In fact, limited access to smartphones and high-speed internet restricts mVAS adoption in rural areas across the continent. It might all be good in the city, but the countryside is being left behind.

For true growth, this iniquity must be addressed firstly at a network level before telemedia players can unleash their content and services on the masses.

There is also the risk of fraud (see page 13). All VAS markets have their share of cyber crime, but emerging ones often see a disproportionate level of fraud that can often see these nascent markets grind to a half.

Overcoming this and the networks ubiquity issues will allow services to flourish.

To learn more about the African market, go to: www.dubai.wtevent.com