Sub-Saharan Africa is the fastest-growing mobile market in the world, with an average annual growth rate of 44 per cent since 2000, according to industry body the GSMA.
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.
“Mobile has already revolutionised African society and yet demand still continues to grow by almost 50 per cent a year,” said Tom Phillips, Chief Government and Regulatory Affairs Officer, GSMA. “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 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 ten 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.
The rapid pace of mobile adoption has delivered huge economic benefits for the region, directly contributing $32bn to the sub-Saharan African economy, or 4.4 per cent of GDP. Approximately 3.5 million full-time jobs are attributed to the mobile industry, which has also spurred a wave of technology and content innovation. More than 50 ‘innovation hubs’, which develop local skills and content in the field of ICT services, have been created, including 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 across Africa compared to 36 in Asia, the second most popular region for these services.
But despite investments of $16.5bn over the past five years ($2.8bn in 2011 alone) across the five key markets in the region, 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 (700-800MHz) band and the 2.6GHz band, and also liberalising existing licence agreements to allow the deployment of high-speed UMTS and LTE networks in the 900 and 1800MHz bands.
The GSMA believes 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 with the potential for an additional 14.9 million jobs to be created between 2015 and 2020 in the key six markets in the region.
Conversely, failure to harmonise spectrum allocations in the region could add up to $9.30 in increased handset costs for African consumers.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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