A woman using a mobile phone. Africa accounts for just nine per cent of total global mobile subscriptions. FILE PHOTO | NATION
The mobile telecommunications ecosystem will add more than $150
billion in value to sub-Saharan Africa’s economy in the next four years,
equivalent to nearly eight per cent of the region’s GDP.
Last
year, mobile technologies added $110 billion to the continent’s
economy, notes the 2018 Mobile Economy report by GSMA, the body that
represents the interests of mobile operators worldwide.
GSMA
is pegging the rise to the growing number of mobile subscriptions,
which it expects to hit 634 million — equivalent to 52 per cent of the
population — by 2025, from 44 per cent as at the end of 2017.
“For
many citizens across the region, particularly those living in rural
areas, a mobile phone is not just a communication device, it is also the
primary channel for getting online and a vital tool for improving their
lives,” said GSMA chief regulatory officer John Giusti.
“More
needs to be done to connect underserved populations across sub-Saharan
Africa, including coming up with investment-friendly policies and
supportive regulatory frameworks.”
Smartphone connections
As at December 2017, the total number of smartphone connections
stood at 250 million, equivalent to just a third of the total
connections base; still the GSMA expects the adoption rate to double by
2025 to reach two-thirds of total connections, equivalent to an
installed base of around 690 million.
After rapid
growth in the first half of this decade, that saw overall subscriber
penetration grow by 21 per cent since 2010, mobile adoption in the
region is expected to slow in coming years to an annual growth rate of
4.8 per cent between 2017 and 2022.
“Subscriber growth
has slowed in recent years as the industry confronts the challenges of
affordability and a youthful population, but growth rates remain well
ahead of global averages,” the GSMA said.
Despite the
slowing subscriber growth, GSMA forecasts that the industry’s
contribution to sub-Saharan Africa’s economies will grow by an average
of $10 billion every year in the next four years, to reach $150 billion
by 2022, as countries benefit from improvements in productivity and
efficiency, particularly due to the increase in mobile Internet
adoption.
As at 2017, the mobile ecosystem in
sub-Saharan Africa supported three million jobs and contributed almost
$14 billion to the funding of the public sector in the form of general
taxation as well as sector-specific levies on the consumption of mobile
services.
Mobile money
At
least two-thirds of the countries in the region had excise taxes on
airtime, SIM cards or mobile money transactions, or higher VAT rates on
the usage of mobile services which represented more than 20 per cent of
all mobile taxes directly supported by consumers in the region.
Mobile
money also continued to expand rapidly across the region, with the
total value and number of transactions growing by 14 per cent and 18 per
cent to reach $19.9 billion and 1.2 billion, respectively in 2017.
East
Africa remains the largest mobile money market, accounting for 56.4
million of total 122 million active 90-day accounts and 51 out of the
total 135 live mobile money services across the region at the end of
2017.
The mobile industry is also playing a key role in
delivering the United Nations Sustainable Developments Goals,
predominantly through increased connectivity and access to information,
as well as supporting a fast-growing tech start-up ecosystem.
There
were 202 active mobile health (mHealth) services in the region in 2017,
a 58 per cent increase from 2016, taking the proportion of the region’s
population getting health services via their mobile phones to about 11
percent.
Tech start-up
Mobile
is becoming a key factor in sub-Saharan Africa’s fast-growing tech
start-up ecosystem, with many start-ups in Africa now using mobile as
the primary platform to create solutions that address a range of
socioeconomic challenges.
A total of $560 million was
raised by 124 tech start-ups across Africa in 2017, 53 per cent up from
2016, in which sub-Saharan Africa accounted for around $515 million in
more than 100 deals.
This year has already seen a
number of high-profile investments, including the $3.5 million put in
Kenyan mobile survey platform mSurvey to fund its expansion into Nigeria
and South Africa, and $1.1 million in seed funding for Nigerian
start-up Piggybank.ng, which offers online savings plans to low- and
middle-income Nigerians.
The GSMA also notes that
mobile operators already play a key role in supporting the tech start-up
ecosystem in sub-Saharan Africa through initiatives to identify and
develop new talent and solutions, including direct funding of
incubators, competitions and mentorship programmes.
The
report highlights Orange’s $58 million African start up investment
initiative, launched in June 2017 and dedicated to African start-ups
that utilise mobile network capabilities, and Safaricom’s BLAZE BYOB TV
show, a start-up training and funding competition.
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