12 July 2017

East Africa: #M360Africa - Mobile Adoption Still Rising, but Growth Continues to Slow, Shows New Gsma Report

At the end of 2016, 65% of the world's population had a mobile subscription - a total of 4.8 billion unique mobile subscribers.

By 2020, almost 860 million new subscribers will be added, taking the global penetration rate to 73%. However, mobile subscriber growth is slowing; we expect a compound annual growth rate (CAGR) of 4.2% between 2016 and 2020, compared to 5.6% over the preceding four years.

This is according to a New Report by GSMA, 'The Mobile Economy: Sub-Saharan Africa 2017', which was launched at the GSMA Mobile 360 - Africa event held in Dar-es-Salaam Tanzania. Unlike last year's report that focused on the whole of the African Continent, this year the study covered only the Sub-Saharan Region.

With developed markets approaching saturation, the report further showed that developing markets will account for nine out of ten new subscribers in the four years to 2020. Asia Pacific will add approximately 571 million unique subscribers, representing two thirds of new subscriber growth globally over the same period. Annual subscriber growth in Sub-Saharan Africa - the world's most under-penetrated region - is expected to be 6.2%.

The new report forecasts that the number of unique mobile subscribers in Sub-Saharan Africa will grow from 420 million (43 per cent of the population) at the end of 2016 to 535 million (50 per cent of the population) in 2020, making it the fastest growing region in the world over this period.

The report also highlighted the Sub-Saharan Africa mobile ecosystem's growing contribution to regional GDP, jobs, innovation and socio-economic development.

"Sub-Saharan Africa will be a key engine of subscriber growth for the world's mobile industry over the next few years as we connect millions of previously unconnected men, women and young people across the continent," said Mats Granryd, Director General of the GSMA. "Mobile is also offering sustainable solutions that address the lack of access to services such as health, education, electricity, clean water and financial services, which still affect large swathes of the population."

Speaking to CIO East Africa, Kenechi Okeleke, Lead Analyst GSMA Intelligence also pointed out that the four key hindrances to mobile penetration in Africa which included Accessibility, digital literacy, Affordability and lack of local content still persisted.

However, Mr. Kenechi also said that the report findings also showed new trends to grow mobile penetration were emerging including the second hand market way of acquiring smartphones as well as Mobile Operators finding ways to offer affordable data bundles to their customers.

Major highlights from the report show that subscriber growth is expected to be concentrated in large, underpenetrated markets such as the Democratic Republic of Congo (DRC), Ethiopia, Nigeria and Tanzania, which together will account for half of the 115 million new subscribers expected in Sub-Saharan Africa by 2020.

Growth will also focus on currently under-represented segments such as the under-16 age group, which accounts for more than 40 per cent of the population in many countries, and women, who are currently 17 per cent less likely to have a mobile phone subscription than their male counterparts.

Mobile is also a vital tool in delivering digital and financial inclusion in Sub-Saharan Africa. Around 270 million people in the region now access the internet through mobile devices, while the number of registered mobile money accounts has reached 280 million.

Mobile operators and others are also leveraging the ubiquity of mobile networks across the region to deliver services that are working towards achieving the UN Sustainable Development Goals (SDGs) in areas such as energy, water and sanitation, healthcare, and education.

Mobile technologies and services generated $110 billion of economic value in Sub-Saharan Africa in 2016, equivalent to 7.7 per cent of regional GDP, a figure expected to grow to $142 billion (8.6 per cent of GDP) by 2020. The mobile ecosystem also directly and indirectly supported approximately 3.5 million jobs in the region last year, and made a $13 billion contribution to the public sector in the form of taxation.

Local mobile operators have invested $37 billion in their networks over the past five years, mainly to deploy new 3G/4G mobile broadband networks. About a third of mobile connections in region were running on mobile broadband networks at the end of last year, forecast to rise to 60 per cent by 2020. These new networks - alongside rising smartphone adoption - are driving demand for digital content and services.

"As Sub-Saharan Africa transitions to higher levels of mobile engagement, underpinned by growing access to mobile data services and smart devices, we are seeing a flourishing mobile ecosystem emerge, supported by growing investments by operators and others in mobile-focused start-ups and tech hubs," added Granryd.

He further added that building this digital society will require collaboration between governments and the mobile industry to develop the policies and programmes that create the right incentives for innovation and an enabling environment for extending connectivity to all.

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