Friday, July 19, 2019 /10:12AM / By GSMA / Header Image Credit: Nairametrics
Half the population in Sub-Saharan Africa will subscribe to mobile services by 2025
By the end of 2018, there were 456 million unique mobile subscribers in Sub-Saharan Africa – an increase of 20 million over the previous year and representing a subscriber penetration rate of 44%. Around 239 million people, equivalent to 23% of the population, also use the mobile internet on a regular basis. Sub-Saharan Africa will remain the fastest growing region, with a CAGR of 4.6% and an additional 167 million subscribers over the period to 2025. This will take the total subscriber base to just over 600 million, representing around half the population.
Nigeria and Ethiopia will record the fastest growth rates between now and 2025, at 19% and 11% respectively. Across the region, the demographic bulge will result in large numbers of young consumers becoming adults and owning a mobile phone for the first time. This segment of the population will account for the majority of new mobile subscribers and, as ‘digital natives’, will significantly influence mobile usage patterns in the future.
3G takes the lead as 4G begins to gain traction
During 2019, 3G will overtake 2G to become the leading mobile technology in Sub-Saharan Africa, with just over 45% of total connections by the end of the year. 3G adoption has doubled over the last two years as a result of network coverage expansion and cheaper devices. The planned KaiOS ‘smart feature phone’ initiative, fronted by some of the region’s leading operators, is set to give impetus to smartphone adoption. The number of smartphone connections in the region reached 302 million in 2018; this will rise to nearly 700 million by 2025, an adoption rate of 66%.
Sub-Saharan Africa lags other regions in 4G adoption. By the end of 2018, 4G accounted for 7% of total connections, compared to the global average of 44%. The high cost of 4G-enabled devices and delays in assigning 4G spectrum to established service providers in some markets have been among the factors holding back 4G uptake. This is beginning to change though, with new 4G spectrum assignments in several countries over the last 12 months and a marked increase in network deployment. Seven LTE networks have been launched in the region since the start of 2019, including in Ghana and Burkina Faso. 4G adoption will overtake 2G in 2023 and rise to 23% of connections by 2025.
Mobile contributing to economic growth and job creation
In 2018, mobile technologies and services generated 8.6% of GDP in Sub-Saharan Africa, a contribution that amounted to over $144 billion of economic value added. The mobile ecosystem also supported almost 3.5 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with almost $15.6 billion raised through taxation. By 2023, mobile’s contribution will reach almost $185 billion
(9.1% of GDP) as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services. The informal economy accounts for a large part of the mobile ecosystem in Sub-Saharan Africa. Almost 1.2 million of the 1.7 million directly employed by the mobile ecosystem are informally employed in the distribution and retail of mobile services.
Mobile enabling digital disruption in key sectors
Mobile-enabled platforms are increasingly disrupting traditional value chains in different verticals across the region. These platforms – mostly developed by a rapidly expanding local tech start-up ecosystem – aim to eliminate inefficiencies in conventional business models, as well as extend the reach of services and provide greater choice to customers.
Sub-Saharan Africa remains a hotbed for mobile money services. By the end of 2018, there were 395.7 million registered mobile money accounts in the region, representing nearly half of total global mobile money accounts. The region is now served by more than 130 live mobile money services, many of them led by mobile operators, and a network of more than 1.4 million active agents.
Promoting policies for sustainable digital progress
With mobile technology at the heart of SubSaharan Africa’s digital journey, it is essential for policymakers in the region to implement policies and best practices on key enablers of sustainable growth in the mobile industry. Arguably the most significant enabler is radio spectrum. Efficient and effective management of this vital but finite resource is key to maximising the opportunities that mobile connectivity can bring to society.
This is especially important as the region transitions from 2G to next-generation mobile broadband networks. While high mobile broadband speeds and increased mobile data consumption have been proven to generate economic benefits, they also require adequate and sufficient spectrum to function effectively and attract the necessary investment for network infrastructure development.