Mobile Phone Service Skyrocketing in Africa, With Huge Potential for Further Growth

on November 10 2011 12:13 PM
Kenyan Lepapa Moyo talks on his cellphone outside their beach home in Ras-Kitau on Manda Island in Lamu
Kenyan Lepapa Moyo talks on his cellphone outside their beach home in Ras-Kitau on Manda Island in Lamu Reuters

The mobile phone revolution is witnessing its most spectacular growth in Africa, according to a report by the GSM Association (GSMA), a consortium of global mobile phone operators.

The numbers of subscribers in Africa has climbed almost 30 percent annually for the past 10 years – so much so that Africa has now overtaken Latin America as the world’s biggest market, behind Asia.

The report suggests that African people are increasingly shifting to mobile communications because landline service is unreliable and too expensive.

Peter Lyons, GSMA's director of spectrum policy for Africa and Middle East, told the BBC that mobile penetration in Africa reached 649 million subscribers in the fourth quarter of 2011 (out of a total population of about 1 billion). That figure is expected to climb to 735 million by the end of 2012. By 2015, over 900 million subscribers are anticipated.

That is equivalent to a 65 percent penetration rate,” he said. “Out of every 100 people, 65 have some form of mobile connectivity.”

In addition, GSMA said that fully 96 percent of subscriptions are pre-paid. (By comparison, in the U.S. only about 25 percent of wireless subscriptions are pre-paid, according to New Millennium Research Council (NMRC).

Within Africa itself, the most populous nation, Nigeria, has the highest number of individual subscribers (93 million – or about one-sixth of all mobile subscriptions on the continent), while South Africa has the highest broadband penetration (6 percent), followed by Morocco (2.8 percent).

Kenya leads the continent in mobile money transfers – with 8.5 million users of the service. After the Nairobi government eliminated the 16 percent general sales tax on mobile handsets two years ago, handset purchases have skyrocketed by more than 200 percent, GSMA noted.

GSMA indicated that the Mobile Industry in Africa contributes $56-billion to the regional economy, equal to 3.5 percent of total GDP.

“In particular, the mobile ecosystem is estimated to employ over 5 million Africans and is contributing to bringing mobile services to customers right across the continent,” the study said.

The mobile industry in Africa is booming and a catalyst for immense growth, but there is scope for far greater development, Lyons said. He added the potential in Africa remains huge because only 36 percent of people in the 25 largest African mobile markets still have mobile service access.

To take full advantage of its potential, African countries need to allocate more spectrum for the provision of mobile broadband services, as well as introduce tax cuts for the industry, he said.

Sufficient spectrum should be provided for mobile broadband services through 3G, HSPA [High-Speed Packet Access] and LTE [Long Term Evolution] technologies, GSMA said.

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