Mobile tech industry targets $166 billion in Nigeria, others
Creates two million jobs
THE mobile technology industry in Nigeria, South Africa, Kenya and other sub-Saharan African countries is expected to contribute about $166 billion in value to the region by 2020, which translates to about 8 per cent of the region’s expected GDP.
Besides the report, which was released in South Africa explained that the industry contributed more than $ 100 billion to the region’s economy in the 2014 business year.
This was disclosed in a new Global System for Mobile communications Association (GSMA) study published and presented at the ‘Mobile 360 Series – Africa’ conference, in Cape Town, South Africa.
The new study, tagged: ‘The Mobile Economy – Sub-Saharan Africa 2015’, found that the $102 billion economic contribution in 2014 was equivalent to 5.7 per cent of the region’s GDP.
It noted that mobile operators directly contributed $31 billion, representing 1.7 per cent of GDP in the region.
GSMA observed that this economic contribution is set to increase over the coming years as mobile operators continue to extend connectivity to unconnected populations across the region and roll out new mobile broadband networks and services.
Going by analysts, the, Nigerian market is adjudged the largest telecommunications market with over five big players including MTN Nigeria, Globacom, Airtel, Etisalat and Visafone. The market, which is worth over $32 billion, has surpassed the 100 per cent teledensity mark and currently has over 150 million active telephone subscribers.
According to the Acting Director-General and Chief Technology Officer at GSMA, Alex Sinclair, the mobile industry remains a key driver of economic growth and employment in Sub-Saharan Africa, making a vital contribution given the population growth and high unemployment levels seen in many countries in the region.
“Despite revenue and margin pressures, local mobile operators continue to invest heavily to extend network coverage to serve unconnected communities and accelerate the migration to high-speed 3G/4G mobile broadband networks. Mobile technology is also playing a central role in Sub-Saharan Africa by addressing a range of socio-economic challenges, particularly digital and financial inclusion, and enabling access to vital services such as education and healthcare, “ Sinclair said.
The study observed that the SSA region will be the world’s fastest-growing mobile region.
It forecast that there will be 386 million unique mobile subscribers in Sub-Saharan Africa by the end of this year, equivalent to 41 per cent of the region’s population.
It disclosed that the region’s subscriber base has grown by 13 per cent a year (CAGR), on average, during the first half of this decade (2010 to 2015), growing at more than twice the rate of the global average (6 per cent) during this period.
GSMA said the region overtook Latin America in 2014 to become the world’s third-largest mobile subscriber market, behind only Asia Pacific and Europe. The number of unique mobile subscribers in Sub-Saharan Africa is forecast to surpass half a billion (518 million) by 2020, representing almost one in two (49 per cent) of the region’s population by this point.
According to the study, total mobile connections in Sub-Saharan Africa are on track to reach 722 million by year-end.
“Mobile broadband (3G/4G) will account for almost a quarter of connections this year, but will increase to 57 per cent by 2020, driven by expanding mobile broadband network coverage and falling device costs.
“Commercial 3G networks have been launched in 41 countries across Sub-Saharan Africa as of June 2015, while 4G networks have been launched in 23 countries. Investment in these high-speed networks is resulting in a corresponding growth in consumers using their devices to access the internet; almost a quarter (23 per cent) of the Sub-Saharan African population will be using the mobile internet this year, a figure forecast to rise to 37 per cent by 2020.
“Mobile is seen as the primary means of accessing the internet in a region where fixed-line infrastructure is severely limited”, it stated.
The GSM body noted that the increasing availability of mobile broadband networks, alongside the introduction of affordable mobile data tariffs and falling device prices, has led to a surge in smartphone use.
According to it, the smartphone adoption rate has doubled over the last two years and now accounts for one in five connections, though this is still half the global adoption average (40 per cent).
It is predicted that regional smartphone connections will reach 540 million by 2020, accounting for half of total connections by that point.
The report noted that the average selling price (ASP) of smartphones has fallen significantly in most regional markets, with an increasing number of models now available in the sub-$100 price range.
The report said in 2014, the mobile ecosystem directly employed approximately two million people in SSA, with the majority working in the distribution and retail sectors and approximately 325,000 employed by mobile operators.
A further 2.4 million jobs were indirectly supported as result of the demand generated by the mobile sector, bringing the total to 4.4 million.
It is forecast that the industry will grow to support more than six million jobs by 2020.
The mobile ecosystem also made a contribution to the public finances of the region’s governments via general taxation of approximately $15 billion in 2014.
Mobile operators in the region invested $9 billion in network infrastructure development in 2014, a 16 per cent increase on the amount invested in 2013.
The ongoing investment in mobile broadband networks will see capital investments reach $13.6 billion by 2020.
The report highlighted how mobile operators are working on innovative solutions to expand network coverage to underserved populations in rural and geographically remote areas, and to tackle the barriers to mobile phone adoption, including affordability and digital literacy. It also indicates that mobile operators, governments and international development organisations have been working on a range of mobile-based solutions to address a variety of social challenges in the region, many of which arise from lack of access to essential services, such as basic education and health.
“Mobile is having a hugely positive and transformative impact across Sub-Sahara Africa, but future progress will depend on governments working with the industry to provide a regulatory environment that encourages investment and innovation,” Sinclair added.
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