Africa’s mobile users to hit half a billion

A client uses a solar-charged mobile phone handset at a retail centre in Nairobi. There will be over half a billion mobile phone users in sub-Saharan Africa in the next six years, according to this year’s GSMA Intelligence report. PHOTO | FILE

What you need to know:

  • Projection for the next six years is based on sub-Saharan Africa’s robust economic growth and increasing affordability of handsets

There will be over half a billion mobile phone users in sub-Saharan Africa in the next six years, according to this year’s GSMA Intelligence report.

The region remains the fastest growing in mobile telephony subscription, a trend attributed to its robust economic growth and the increasing affordability of mobile phone services.

By mid this year, there were 329 million unique subscribers representing a penetration rate of 38 per cent. Further, there were over 600 million SIM connections equivalent to a penetration rate of 68 per cent in the region as consumers and businesses increasingly use mobile use beyond communication.

This number is set to rise at a compound annual growth rate of seven per cent to reach just over half a billion in 2020.

Mobile phone firms have also deployed more 3G connections that accounted for only 15 per cent of the total base in 2013 and are expected to rise to over half by 2020, making the region among the largest in terms of 3G connections only behind the highly populated Asia-Pacific region.

The rise in 3G connections largely reflects the accelerating rate of smartphone use. Sub-Saharan Africa is forecast to witness the highest growth of any region in terms of the number of smartphone connections (between 72 and 525 million) over the next six years. This means over half of the total connection then will be on smartphones.

The growing adoption of smartphones along with other data-capable devices such as tablets is in turn driving an explosion in data traffic.

The region’s mobile data traffic is forecast to record a 20-fold increase from 2013 to 2019, about twice the global growth rate.

This upswing is expected to push up revenue for the mobile companies across the region. The firms have already seen strong jump in revenues in the last few years, driven in particular by an increase in the number of connections and subscriber base.

Revenues grew at a compound annual growth rate of 7 per cent yearly between 2008 and 2013. The growth rates are however set to slow slightly going forward, but increasing data traffic will see revenue growth remain at a healthy 5.6 per cent up to 2020.

This calls for more investments in the network capacity to cope with the expected growth in data traffic, as well as increase in 3G coverage.

In 2013, the mobile industry contributed 5.4 per cent to overall gross domestic product in the region, and this is forecast to increase to 6.2 per cent by 2020.

The mobile industry is also a significant source of jobs in sub-Saharan Africa directly employing nearly 2.4 million people. This is also expected to increase to around 3.5 million by 2020.

The industry also makes a very large contribution to the funding of the public sector in the form of general taxation ($13 billion in 2013), and through further payments in the form of licence as well as regulatory fees and spectrum auctions.

Despite the progress to date, there remains a significant proportion of the population in the region who do not have access to the internet.

At the end of 2013, there were almost 150 million individuals using mobile devices to access the internet in sub-Saharan Africa. This is equivalent to an overall mobile internet penetration rate of only 17 per cent of the total population, compared to a global average of just over 30 per cent.

This figure will more than double by 2020, reaching 38 per cent, with an additional 240 million people across the region gaining mobile internet access by that date.

There are a number of barriers to extending mobile internet access in sub-Saharan Africa, with affordability and network coverage in rural areas being key challenges given high levels of poverty.

More than 70 per cent of the population lives in rural areas.

Telcoms, governments, regulators and other entities all have a role to play in addressing these barriers. Allowing commercially-agreed network sharing and ensuring timely release of digital dividend spectrum will be key in enabling growth of network coverage.