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Africa is a mobile continent. It’s something we’ve heard so often that it’s become a cliche. Like many cliches however it’s based in truth. And for evidence of that, you don’t need to look any further than figures from a new GSMA report which shows that the number of unique mobile subscribers in Sub-Saharan Africa will pass the half billion mark in 2020.
According to the body, which represents the interests of mobile operators around the globe, that represents significant growth across the region, and will see the mobile industry contributing around 5.4% to its Gross Domestic Product (GDP).
Given the immense number of people living in Sub-Saharan Africa, half a billion subscribers will equate to around 49% of the population having a unique mobile subscription. Given its immense size though, it’s also pretty obvious that the increase in subscriptions won’t be uniform. You only have to look at the current situation to see that.
The Sub-Saharan Africa region includes 46 countries in total. The six largest markets, in order of size, are Nigeria, South Africa, Ethiopia, Kenya, Democratic Republic of Congo and Tanzania, which together account for over half of the region’s unique mobile subscriber base.
There were 329-million unique mobile subscribers in Sub-Saharan Africa at the end of June 2014, equivalent to 38% of the region’s total population. This unique subscriber base is forecast to grow by seven percent per year (CAGR) to 2020 to reach just over half a billion and account for 49% of the population. By this point, Sub-Saharan Africa will have overtaken Europe to become the world’s second-largest mobile market after Asia-Pacific.
According to the GSMA, the total number of mobile connections in the region stood at 608-million in June 2014, forecast to rise to 975-million by 2020. The region is seeing a rapid migration to mobile broadband networks; 3G accounted for only 17% of total connections in June 2014, but is forecast to account for more than half of the total by 2020 as local operators deploy new mobile broadband networks and smartphones become more affordable. 4G adoption is at an early stage in the region today, but is expected to account for four percent of total connections by 2020.
Sub-Saharan Africa is also expected to see the strongest growth of any global region in the number of smartphone connections over the next six years, reaching 525-million by 2020. The growing adoption of smartphones along with other data-capable devices such as tablets and dongles is contributing to a significant increase in mobile data traffic. According to Ericsson, mobile data traffic in Sub-Saharan Africa will grow 20-fold between 2013 to 2019, rising from 37 500 terabytes per month in 2013 to 764 000 terabytes per month by 2019. This growth rate is twice the global growth rate over the same period.
“The mobile industry has transformed the lives of millions of people across Sub-Saharan Africa, providing not just connectivity but also an essential gateway to a wide range of healthcare, education and financial services,” said Anne Bouverot, Director General of the GSMA.
“Millions of additional citizens in the region will become mobile subscribers over the next six years,” she says, “with many being able to access the internet for the first time via low-cost smartphones and mobile broadband networks. Operators and other ecosystem players, as well as governments and regulators, all have a role to play in ensuring that affordable mobile services can be extended across the region.”
An economic boom
The GSMA reckons that the increase in subscribers, alongside an increase in the total number of mobile connections should have a massive effect on the region’s economy. In 2013, the organising body says, the mobile industry contributed 5.4% to overall gross domestic product (GDP) in the region, equivalent to US$75-billion; this included a direct contribution by mobile operators of US$27-billion or 1.9% of GDP. It is estimated that by 2020 the mobile industry will contribute US$104-billion to the region’s economy, representing at that point 6.2% of the region’s projected GDP.
The industry is also a significant source of employment and job creation in the region. In 2013, the mobile ecosystem directly employed nearly 2.4-million people and indirectly supported a further 3.7-million jobs. The industry also makes a large contribution to public funding in the form of general taxation (US$13 billion in 2013), and through further contributions via licence and regulatory fees and spectrum auctions.
Operators in the region invested more than US$45-billion over the last six years (2008 to 2013) to expand coverage and increase network capacity. Capital expenditure over the next seven years (2014 to 2020) is forecast to total around US$97-billion as operators accelerate investments in order to meet rising demand for mobile data services.
The GSMA does however point out that there are still massive challenges that need to be overcome when it comes to increasing network capacity while keeping costs down.
According to the report, the implementation of commercially agreed network sharing deals and ensuring the timely release of Digital Dividend spectrum will be important factors in achieving this goal.
Due to the lack of fixed-line infrastructure in the region, mobile is established as the primary means of accessing the internet. At the end of 2013, there were almost 150 million individuals using mobile devices to access the internet across the region, over 60% of which were doing so via 2G devices. The mobile internet penetration rate in Sub-Saharan Africa is expected to increase to 37% by 2020, with an additional 240 million people across the region becoming mobile internet users over the period.
“To fully realise the transformative potential of mobile in Sub-Saharan Africa, the mobile industry requires a supportive regulatory framework that provides long-term stability and encourages investment,” Bouverot adds. “This includes the need for clear and transparent spectrum management processes, as well as tackling high levels of taxation in some markets. Addressing these issues will allow mobile to power a fresh wave of growth and innovation in this fast-developing region.”
Image: Ken Banks via Flickr.