UAE mobile company to tap African market with $8 phones

The X1 handset from Midcom Group. Courtesy Midcom Group

A UAE company will offer feature phones priced at US$8 throughout Africa while tapping the higher-end market in Saudi Arabia, as it looks to establish itself among the biggest sellers in its markets.

Midcom Group will expand on its distribution base after identifying a gap in the market serving the middle segment.

“There is always a certain segment that wants to use various features of a product, but with the affordability of the big brands they cannot have,” said Akash Kumar, the managing director of Midcom.

The new range of mobile phones will cater to not only rural communities in Africa and higher-end customers in Saudi Arabia, but also people that may travel for the Haj.

The Fero line offers 16 models that start at $8 and inch up to more than $180.

Five products in the line were tested in markets across Nigeria, Kenya, Uganda and Tanzania at the end of last year, selling more than a million handsets in less than six months. Now, distribution areas include Ivory Coast, Ghana, Rwanda, Senegal and Togo, with plans to hit Congo and Cameroon before the end of the year.

While this sector is mostly dominated by Asian vendors, other vendors are trying to take a larger chunk of the market.

Sub-Saharan Africa continues to scale up its mobile industry, and recorded 367 million subscribers by the middle of last year, according to Groupe Spécial Mobile Association (GSMA).

The decreasing cost of technology is encouraging more smartphones to come into play. The GSMA said 200 million individuals across sub-Saharan Africa accessed the internet through mobile devices by the middle of last year. And that figure is expected to almost double by the end of this decade, to 540 million smartphone users.

Smartphones typically cost in the hundreds of dollars. Last March, one of Africa’s largest mobile phone carriers, Orange, announced plans to launch a cheaper version at less than $40.

Despite the increase in smartphones and mobile broadband, about 450 million connections will remain based on feature phones by 2020. “Affordability remains a key limiting factor for many consumers in the region, especially poorer rural dwellers who still struggle to afford data-enabled devices and tariffs, despite falling prices,” GSMA said.

Midcom expects Nigeria to make up a large chunk of its sales, but another sector will be Saudi Arabia, which Midcom will dive into later this year. The company’s 2020 vision expects double-digit growth year over year, with new manufacturing facilities in Africa. “We want to be one of the top five brands in all the markets we operate,” Mr Kumar said.

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