Mobile phone users in sub-Saharan Africa up by 44 pc: Report By XINHUA | Tuesday, November 13   2012 at  15:49

Mobile phones driving sub-Saharan African economic growth. PHOTO | XINHUA 

The number of mobile phone users in sub-Saharan Africa rose by 44 per cent to 475 million, compared to just 12.3 million fixed line connections, representing the highest proportion of mobile versus fixed line connections in the world.

Statistics released on Tuesday by GSMA, a global association of mobile survive providers revealed that mobile industry is driving explosive economic growth in sub-Saharan Africa.

The report says mobile industry growth could also generate a Gross Domestic Product (GDP) increase of $40 billion, representing 0.54 per cent of total GDP, in the region by 2016.

"In many sub-Saharan African countries, mobile broadband is the only possible route to deliver the Internet to consumers. However, to maximise the potential gains, governments need to continue to support the development of mobile broadband, notably through the provision of appropriate spectrum," said Chris Williams, Deloitte telecommunications partner in a statement.

Mr Williams said the current spectrum allocations across the region lag behind those of developed countries and, unless increased, seem likely to raise costs of provision, challenge investment decisions and increase network congestion.

The study, which was prepared by Deloitte for the GSMA, presents market developments in the region and serves as a reference point for participants in the mobile industry, policymakers and other interested stakeholders. It covers the state of the industry as well as the contribution of mobile technology to social and economic development across the region.

Fuel growth

With necessary spectrum allocations and transparent regulation, the report says the mobile industry could fuel the growth of 14.9 million new jobs in sub-Saharan Africa between 2015 and 2020.

The GSMA sub-Saharan Africa Mobile Observatory provides a comprehensive evaluation of the region's mobile industry and its socio-economic impact.

"Mobile has already revolutionised African society and yet demand still continues to grow by almost 50 per cent a year," said Tom Phillips, Chief Government and Regulatory Affairs Officer, GSMA.

"To create an environment that supports and encourages this immense growth, it is imperative that governments work in partnership with mobile operators to enable the industry to thrive throughout the region, ultimately providing affordable options to connect its citizens."

The region has some of the highest levels of mobile internet usage globally. In Zimbabwe and Nigeria, mobile accounts for over half of all web traffic at 58.1 per cent and 57.9 per cent respectively, compared to a 10 per cent global average.

According to the report, 3G penetration levels are forecast to grow by 46 per cent through 2016 as the use of mobile-specific services develops. The rapid pace of mobile adoption has delivered huge economic benefits for the region, directly contributing $32 billion to the sub-Saharan African economy, or 4.4 per cent of GDP.

According to the report, about 3.5 million full-time jobs are attributed to the mobile industry, which has also spurred a wave of technology and content innovation. More than 50 "innovation hubs", which develop local skills and content in the field of ICT services, have been created, including the Hive Colab in Uganda, the iHub in Kenya, and Limbe Labs in Cameroon.

High taxes

Safaricom's M-Pesa mobile money transfer service in Kenya has achieved greater scale than any other service in the world. Today, there are more than 80 mobile money operations for the unbanked across Africa compared to 36 in Asia, the second most popular region for these services.

The report says however that high levels of government taxation and new regulation also threaten to limit the growth of mobile services across the region. Africa has the highest taxation, as a proportion of the cost of mobile ownership, amongst any developing regions worldwide, with taxes on handset and mobile devices much higher than elsewhere.

There is also a worrying trend of new taxes being introduced on essential mobile services; for instance, the Kenyan government recently announced a new 10 per cent tax on money transfer services, threatening the economic viability of the service in the future.

Despite investments of $16.5 billion over the past five years ($2.8 billion in 2011 alone) across the five key markets in the region, mainly directed towards the expansion of network capacity, sub-Saharan Africa faces a looming "capacity and coverage crunch" in terms of available mobile spectrum. The current amount of spectrum allocated to mobile services in sub-Saharan Africa is amongst the lowest worldwide.

Some countries apportion as little as 80MHz, compared to developed markets where allocation for mobile exceeds 500MHz.With mobile Internet traffic forecast to grow 25-fold over the next four years, there will be a considerable increase in network congestion unless governments across the region take urgent steps to release new spectrum in line with the recommendations of the ITU's World Radiocommunication Conference.