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GSMA Report Shows Mobile Changing Lives In Sub-Saharan Africa

Milcah Lukhanyu by Milcah Lukhanyu
8 years ago
in Business
10 min read
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 The GSMA on November 13 revealed that sub-Saharan Africa is the fastest-growing mobile market in the world, with an average annual growth rate of 44 per cent since 2000.

The report shows that mobile connections have leapt to 475 million, compared to just 12.3 million fixed line connections, representing the highest proportion of mobile versus fixed line connections in the world. With necessary spectrum allocations and transparent regulation, the mobile industry could fuel the growth of 14.9 million new jobs in sub-Saharan Africa between 2015 and 2020. Based on research from Deloitte, the GSMA sub-Saharan Africa Mobile Observatory provides a comprehensive evaluation of the region’s mobile industry and its socio-economic impact.

According to Tom Phillips, Chief Government and Regulatory Affairs Officer at GSMA, “Mobile has already revolutionized African society and yet demand still continues to grow by almost 50 per cent a year.”

Phillips added, “To create an environment that supports and encourages this immense growth, it is imperative that governments work in partnership with mobile operators to enable the industry to thrive throughout the region, ultimately providing affordable options to connect its citizens.”

The sub Saharan region has some of the highest levels of mobile internet usage globally. In Zimbabwe and Nigeria, mobile accounts for over half of all web traffic at 58.1 per cent and 57.9 per cent respectively, compared to a 10 per cent global average. 3G penetration levels are forecast to grow by 46 per cent through 2016 as the use of mobile-specific services develops.

READ  Kenya-Re projects Sh1bn drop in earnings due to the COVID-19 pandemic

 

The report adds that the growth of  mobile adoption has come with huge economic benefits with a contribution of US$ 32 billion to the sub-Saharan African economy, or 4.4 per cent of GDP.  Creation of nearly 3.5 million full-time jobs due to the mobile industry, technology and content innovation and more  than 50 ‘innovation hubs’, for local skills and content building. Hubs include the Hive Colab in Uganda, the iHub in Kenya, and Limbe Labs in Cameroon.

Safaricom’s M-PESA mobile money transfer service in Kenya has achieved greater scale than any other service in the world. Today, there are more than 80 mobile money operations for the unbanked acrossAfrica compared to 36 in Asia, the second most popular region for these services.

 

Despite investments of US$ 16.5 billion over the past five years (US$ 2.8 billion in 2011 alone) across the five key markets in the region(4), mainly directed towards the expansion of network capacity, sub-Saharan Africa faces a looming ‘capacity and coverage crunch’ in terms of available mobile spectrum.

The current amount of spectrum allocated to mobile services in sub-Saharan Africa is amongst the lowest worldwide. Some countries apportion as little as 80MHz, compared to developed markets where allocation for mobile exceeds 500MHz. With mobile Internet traffic forecast to grow 25-fold over the next four years, there will be a considerable increase in network congestion unless governments across the region take urgent steps to release new spectrum in line with the recommendations of the ITU’s World Radiocommunication Conference (WRC). This includes capacity in the Digital Dividend (700-800 MHz) band and the 2.6 GHz band, and also liberalising existing licence agreements to allow the deployment of high-speed UMTS and LTE networks in the 900 and 1800MHz bands.

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The combined aggregated effect of the spectrum release of the Digital Dividend, 2.6GHz and the refarming of 1800MHz would have a positive impact on job creation: an additional 14.9 million jobs could be created between 2015 and 2020 in the key six markets in the region(3). Mobile industry growth could also generate a GDP increase of US$ 40 billion, representing 0.54 per cent of total GDP, in the region by 2016. Meanwhile, failure to harmonise spectrum allocations in the region could add up to US$ 9.30 in handset costs for African consumers.

Chris Williams, Deloitte telecommunications partner, comments: “In many sub-Saharan African countries, mobile broadband is the only possible route to deliver the Internet to consumers. However, to maximise the potential gains, governments need to continue to support the development of mobile broadband, notably through the provision of appropriate spectrum. The current spectrum allocations across the region lag behind those of developed countries and, unless increased, seem likely to raise costs of provision, challenge investment decisions and increase network congestion.”

 

High levels of government taxation and new regulation also threaten to limit the growth of mobile services across the region. Africa has the highest taxation, as a proportion of the cost of mobile ownership, amongst any developing regions worldwide, with taxes on handset and mobile devices much higher than elsewhere. There is also a worrying trend of new taxes being introduced on essential mobile services; for instance, the Kenyan government recently announced a new 10 per cent tax on money transfer services, threatening the economic viability of the service in the future.

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Meanwhile, approvals for tower and fibre deployment have been identified as the single biggest obstacle to investment by the mobile community in sub-Saharan Africa. As capacity increases and such deployments are urgently required to cope with substantial traffic growth, complex and uncoordinated national and local regulations and approval processes, especially with regards to rights of way, could be simplified to aid this process.

Phillips continued: “Tackling stifling regulation, addressing high taxation and implementing a harmonised approach to future spectrum allocation will further boost the success story of mobile across the continent. There is not only the potential to lift millions out of poverty, but also the opportunity to ensure that Africa benefits from global economies of scale in terms of both network technology and mobile devices.”

 

 

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Milcah Lukhanyu

Milcah Lukhanyu

Milcah Lukhanyu covers daily news briefs at TechMoran. She is the person who will probably read your press release and get the story out of it or totally trash it. Send tips to [email protected]

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