By the end of this decade Africa’s mobile revolution will be complete. The telecommunications industry has been transformed in the space of less than two decades. But there is another revolution well under way — one that is set to be even faster. Investment in next-generation cellular networks and the landing of submarine cables has created an insatiable appetite for the Internet, mainly by way of smartphones and tablets.

Increased Internet access will generate more consumer spend than any other media product or service in the next five years in the entertainment and media industry across Sub-Saharan Africa (SSA), according to recent research carried out by PwC. Nigeria, followed by South Africa and Kenya, will experience the fastest growth in Internet access revenue globally during the next five years.

Every year PwC analyses the Entertainment and Media (E&M) outlook in South Africa, Nigeria and Kenya for a forecast period of five years. We also uncover how shifts in spending are likely to shape the future of 12 entertainment and media industry segments over these next five years, as well as how various trends and norms are transforming the industry and how they are expected to play out in the long-term. PwC’s “Entertainment and Media Outlook:2014-2018” report includes historical and forecast data on the Internet, television, filmed entertainment, radio, recorded music, consumer magazine publishing, newspaper publishing, consumer and educational book publishing, business-to-business publishing, out-of-home advertising, video games, and sports.

South Africa’s entertainment and media market is expected to grow by 10.2 percent compounded annually (CAGR) from 2014 to 2018 to a value of 190.4 billion South African Rand ($17.4 billion). Although all entertainment and media segments are projected to see growth to 2018, the Internet’s growth will be the most significant, leading to a market share of 37.6 percent. As a result, every other segment will see its overall share of the pie decline by 2018, with television in particular falling to just a 20.5 percent share in 2018, down from 26.3 percent in 2013.

Although there is a significant uptake in digital, there are still plenty of opportunities in traditional media, with the likes of television and radio revenues still guaranteeing the kind of medium to captivate mass audiences that the Internet cannot offer. Unlike in other markets where the shift to digital is more advanced, South Africa’s newspaper and magazine industry still presents a window of opportunity for publishers to experiment with various business models before increased Internet access compels them to alter their businesses.

According to the report, Nigeria’s entertainment and media revenues are projected to reach $8.5 billion in 2018, more than doubling from the 2013 figure of $4 billion at a compound annual growth rate of 16.1 percent. This represents one of the fastest growth rates in the world.

Kenya’s entertainment and media revenues are forecast to rise to $1 billion in 2018. Advertisers are also starting to follow Kenyans onto the Internet.

This year, for the first time, we have an included a Connectivity Index in our E&M report to measure the state of connectivity for all markets in Sub-Saharan Africa (SSA) with a population of more than 10 million. The findings presented in the Index highlight those markets that offer the greatest potential for the future consumption of entertainment and media services because of their relative maturity in terms of connectivity. The Index has an important place in highlighting what is required to achieve a better-connected Africa. Despite the progress being made in improving communications across Africa in the past decade, no one can afford to be complacent — a better connected Africa will enable and accelerate economic growth for the continent.

The countries that appear toward the top of the Index are typical of markets where consumers have embraced digital services the most, and regulators and policymakers are making their best efforts to ensure that consumers have a good service quality. As the most mature of markets in SSA, it is no surprise that South Africa tops the Index as it offers strong potential in terms of its entertainment and media industry. Although South Africa scores highly in terms of current connectivity and quality of connectivity, relative to other markets on the continent, there is still room for improvement. Mobile broadband services are still expensive for consumers with nearly 0.5 percent of a South African consumer’s average GDP per capita going toward mobile broadband services. In terms of quality of services, download speeds in South Africa are respectable, but significantly slower than in Madagascar, Ghana, Mali and Senegal.

Kenya also performs well in terms of connectivity with the continued rise in its international bandwidth usage. The landing of international submarine cables on the East Coast has also improved coverage and capacity. Like South Africa, Kenya scores poor on affordability, especially for mobile broadband services.

The surprise market in the Index is Côte d’Ivoire. Aided by the landing of submarine cables in West Africa, broadband Internet connectivity at superfast speeds has become a possibility.

Although broadband penetration may be high in a country, it does not necessarily mean that it will score high in terms of connectivity. This is the case of Nigeria where the cost of mobile broadband services is too high. This is a direct consequence of the scarcity of Internet bandwidth. The only two markets in the Index with lower Internet capacity according to ITU figures are Ghana and Cameroon, suggesting that despite the landing of the WACS cable, a lack of robust last-mile connectivity remains a challenge in providing affordable and quality Internet services.

Highly populous markets such as the DRC and Nigeria offer huge growth potential. However, there is still a digital divide in some SSA markets where Internet adoption is low.

Until recently, Africa has offered a relatively simple business model for Communications Service Providers (CSPs): ensuring connectivity for a growing number of consumers has been the main challenge. But entering the age of digital transformation, CSPs need to address the threat of competition from Over-The-Top (OTT) players, deal with the evolving data service requirements of a more discerning customer base and ensure an excellent quality of service by investing in infrastructure.

It is only those markets that are best connected that will offer the true benefits of the digital transformation to consumers and businesses alike. VS

Vicki Myburgh has been with PwC for 20 years. She is a partner in the Assurance Practice and has been the Southern African Leader for PwC’s Entertainment and Media practice for the last five years.