Unique
mobile subscriber penetration as a percentage of the region’s population is
forecast to rise to 49 per cent by the projected year.
This
is according to ‘Mobile Economy 2014: Sub-Saharan Africa’, the new GSMA report
issued at the Mobile 360-Africa event in Cape Town, South Africa.
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.
“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. “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.”
The World’s Fastest-Growing Mobile Region
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 per cent of the region’s total population. This
unique subscriber base is forecast to grow by 7 per cent per year (CAGR) to
2020 to reach just over half a billion and account for 49 per cent 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.
The 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 per cent 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 per cent 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.
Powering the African Economies
The mobile industry is a valuable and growing contributor to the regional economies of Sub-Saharan Africa. In 2013, the mobile industry contributed 5.4 per cent 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 per cent 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 per cent 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.
Connecting the Unconnected
Despite strong subscriber growth in recent years, Sub-Saharan Africa is still the world’s least penetrated mobile region and local operators face several challenges in their efforts to expand network coverage on a cost-effective basis to unconnected populations. 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 per cent of which were doing so via 2G devices. The mobile internet
penetration rate in Sub-Saharan Africa is expected to increase to 37 per cent
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,” added 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.”
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