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How Mobile Telephony is transforming Africa for Future Growth Opportunities

In a few short years, mobile phone penetration is sub-Saharan Africa has increased dramatically, where mobile technology often represents the first modern infrastructure of any kind.

Mobile phones are a crucial mode of communication and welfare enhancement in poor countries, especially those lacking an infrastructure of fixed lines. There are 747 million SIM connections in sub-Saharan Africa, representing 75% of the population in 2019, according to the most recent report from GSMA. The establishment of mobile phone networks has also defied structures hostile to investments, warfare, failed states and natural disasters.

Shipments of mobile phone to South Africa and Nigeria, the continent’s biggest markets, rose 2% and 5.2% year over year. Basic phones such as flip phones or feature phones are generally the most common type of mobile device owned by sub-Saharan Africans. The exception is in South Africa, where 51% own a smartphone that can access the internet and apps, making it the most common device in that country in 2018. While Ghana, Senegal, Nigeria and Kenya, just about one-third of adults own smartphones. Smartphone ownership is again lowest in Tanzania (13%).

As governments across the globe continued responding to COVID-19’s devastation, the mobile sector is playing a crucial role in supporting efforts tackling the pandemic and enhancing health services response to it, according to report.

Mobile money revolution

Reaching the one billion mark is a tremendous achievement for an industry that is just over a decade old. The mobile money industry of today has a host of seasoned providers with a broad set of operational capabilities, a full suite of products and a global reach.

Meanwhile, millions of migrants and their families are experiencing the life-changing benefits of faster, safer and cheaper international remittances and humanitarian cash assistance is being delivered more thoughtfully to those in crisis situations.

All of this is unlocking new solutions to some of the world’s most intractable development challenges and highlighting the catalytic role that it is playing in achieving the Sustainable Development Goals (SDGs) on the continent Africa.

Bridging the dreaded digital divide

Sub-Saharan Africa will remain the fastest growing region, with a CAGR of 4.6% and an additional 167 million subscribers over the period to 2025, a report noted. During 2019, 3G overtake 2G to become the leading mobile technology in the region, with just over 45% of total connections.

For Africans, a cell phone can mean a world of difference, and it doesn’t end with just agriculture. From education to banking to health, mobile phones opened up to a whole new realm of possibilities for the citizens of developing countries.

“World Bank data indicates that around 40 percent of the population in the region is under the age of 16, a demographic segment that has significantly lower levels of mobile ownership than the population as a whole.”

Other growth considerations include the cost of services for less affluent consumers and the volume of customers, about 50 percent, living in rural environments.

Affordability remains the critical barrier to mobile ownership, while lower awareness, as well as a lack of literacy and digital skills, are vital factors preventing women’s mobile internet use.
According to the UN Broadband Commission, an handset and 500MB of data costs 10 percent of an average monthly income in Africa, double the five percent threshold recommended. Addressing this issue will therefore be essential for driving future growth.

Data and subscription packages that cater for less cash-rich consumers are one part of the equation. But, alongside that shift, making handsets cheaper for consumers will also help.
Government policies can also play a role in this area, driving digital inclusion and growing the digital economy in the process.

However, it can be difficult to get an accurate estimate of the number of unique subscribers throughout the region, and even more challenging to tell who has access to a mobile phone, even if they do not own one. This is due to multiple factors around phone usage in sub-Saharan Africa: For example, it is common for individuals to own multiple SIM cards, switching between them in order to take advantage of a particular network’s deals or to maintain service when one network goes down. At the same time, if an individual does not own a phone, they may have access to someone else’s: Even in 2013, 58% of Kenyans who did not own a mobile phone said that they shared one with someone else. Fixed line networks hardly reach the remote rural areas where a relevant percentage of the African population lives.

The industry is renewing its commitment to reaching women with digital and financial services to address the persistent mobile gender gap. Providers are attracting new investments and forming strategic partnerships, leveraging data and innovative financial technologies, and developing robust and interoperable payments systems to diversify their revenue, product offerings and customer base.

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