The bank's most recent Africa policy paper argued that the 'success of Information and Communications Technology (ICT), especially mobile phone penetration, shows how rapidly a sector can grow. It also shows how the public sector can set the conditions for the exponential growth of a vital industry that could transform the continent.'
The reality is less encouraging. Although Africa is better with cellphones than it was without (say, 15 years ago), the actual performance of the industry reveals telling weaknesses. These include the role of multinational capital in sucking out profits and dividends, the lack of genuine competition (collusion is notorious even in the largest economy, South Africa), relatively high prices for cellphone handsets and services, and limited technological linkages to internet service.
Last year, a report ('Towards evidence-based ICT policy and regulation') by Johannesburg researchers Enrico Calandro, Alison Gillwald, Mpho Moyo and Christoph Stork unveiled a host of ICT deficiencies, because although 'the mobile market, has experienced significant growth, outcomes have been sub-optimal in many respects.'
For example, the authors argue, cellphone penetration 'figures tend to mask the fact that millions of Africans still do not own their own means of communication.' Moreover:
- Africa continues to lag behind other regions both in terms of the percentage of people with access to the full range of communications services and the amounts and manner in which they can be used - primarily as a result of the high cost of services
- the cost of wholesale telecommunication services as an input for other economic activities remains high, escalating the cost of business in most countries
- the contribution of ICT to gross domestic product, with some exceptions, is considerably less than global averages
- national objectives of achieving universal and affordable access to the full range of communications services have been undermined by poor policies
- as a general trend across the continent, while the voice divide is decreasing, the internet divide is increasing and broadband is almost absent on the continent
- the fixed-line sector continues to show no signs of recovery as most countries experienced negative growth between 2006 and 2008.
Indeed for nearly all of Africa, cellphone penetration rates 'remain below the 40% critical mass believed to trigger the network effects associated with economic growth' and even in more mature markets (Ghana, Kenya, Nigeria, Tunisia and South Africa), 'The high "penetration" figures result form the use of multiple-SIM cards, resulting in over-counting, often by several million.'
As for internet, they report:
- broadband uptake trails even other developing regions in the world with a penetration rate below 2 per cent
- low penetration rates are mainly a result of the prohibitively high costs of internet services
- the landing of several undersea cables and a number of terrestrial fibre investment projects have led to a significant reduction in the costs of accessing the Internet. In some countries, the drop in wholesale prices has not, however, filtered to end-user prices