Mobile subscription in Africa set for huge growth

7 November 2014

The number of individual mobile subscribers in sub-Saharan Africa is set to surpass the half billion mark by 2020 as mobile services become more affordable, becoming the world’s second-largest mobile market after Asia Pacific.

In addition, the number of mobile connections in the region is expected to rise to 975-million by 2020, from 608-million in June 2014, according to a report released by the Groupe Speciale Mobile Association (GSMA) on Thursday, 6 November.

“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 4% of total connections by 2020,’ says the report entitled “Mobile Economy 2014: Sub-Saharan Africa’.

Sub-Saharan Africa world’s fastest growing mobile region

These growth forecasts do not come as a surprise, though. The region has been the world’s fastest-growing mobile region over the last five years in terms of both unique mobile subscribers and mobile connections, and is forecast to continue to lead global growth through 2020.

In addition, the economic and social benefits have been tremendous. The mobile industry has been able to transform millions of lives across sub-Saharan Africa, providing a vital gateway to a wide range of healthcare, education and financial services, according to Anne Bouverot, director general of the GSMA.

“As today’s report shows, millions of additional citizens in the region will become mobile subscribers over the next six years, 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.’

Six markets – Nigeria, South Africa, Ethiopia, Kenya, Democratic Republic of Congo and Tanzania – account for over half of Sub-Saharan Africa’s unique mobile subscriber base. According to the report, there were 329-million (38% of the region’s total population) unique mobile subscribers in the region by the end June 2014.

Unique subscriber base grows by 7%

This unique subscriber base is forecast to grow by 7% per year 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,’ states the report.

Also, 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, note the report, adding that 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 in the region.

“According to Ericsson3, mobile data traffic in Sub-Saharan Africa will grow 20-fold between 2013 and 2019, rising from 37 500 terabytes per month in 2013 to 764 000 terabytes per month in 2019. This growth rate is twice the global growth rate over the same period,’ says the report.

Africa’s impressive economic growth

Sub-Saharan Africa has been recording impressive economic growth in recent years, and the trend is set to continue, according to the International Monetary Fund. This growth is underpinned by high levels of infrastructure and mining investment, and it seems the mobile industry is becoming a growing contributor to the regional economies of sub-Saharan Africa.

The reports highlights important economic aspects of the mobile industry in the region. It says in 2013, 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 contributor to reducing unemployment in the region. The report notes that the industry directly employed nearly 2.4-million people and indirectly supported a further 3.7-million jobs.

Mobile industry has potential to grow

However, the industry has potential to grow even further. Currently, some countries in the region lack fixed-line infrastructure, hence mobile is mostly the primary means of accessing the internet. By the end 2013, the report says there were almost 150-million individuals using mobile devices to access the internet.

In order to realise the full potential of mobile in the region, the industry needs a supportive regulatory framework that provides long-term stability and encourages investment, according to Bouverot.

“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,’ said Bouverot.

SAinfo reporter