Mobile market driving growth in Africa
Sub-Saharan Africa is the fastest-growing mobile market in the world, according to a new GSM Association (GSMA) report. It holds huge potential for employment and could fuel the growth of 14.9m new jobs in the region between 2015 and 2020.
The GSMA, which represents mobile operators worldwide, said that sub-Saharan Africa’s mobile market has enjoyed average annual growth rate of 44 per cent since 2000. Mobile connections have surged to 475m, compared to just 12.3m fixed line connections. This represents the highest proportion of mobile versus fixed line connections in the world.
Economic impact
This growth has delivered huge economic benefits, the report states. It has directly contributed US$32b, or 4.4 per cent of gross domestic product (GDP), to the sub-Saharan African economy.
Approximately 3.5m full-time jobs are attributed to the region’s mobile industry, which has also spurred a wave of technology and content innovation.
Government support needed
“Mobile has already revolutionised African society ,and yet demand still continues to grow by almost 50 per cent a year,|” said Tom Phillips, the GSMA‘s chief government and regulatory affairs officer.
“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.”
Despite investments of US$16.5bn over the past five years, the report said sub-Saharan Africa faces a looming capacity and coverage crunch in terms of available mobile spectrum.
“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,” the GSMA said.
Tax and regulation
High levels of government taxation and new regulations also threaten to limit the growth of mobile services across the region, according to the report.
Africa has the highest taxation, as a proportion of the cost of mobile ownership, among developing regions worldwide. Taxes on handset and mobile devices are much higher than elsewhere.
“There is also a worrying trend of new taxes being introduced on essential mobile services,” the GSMA said. “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.”
The report also identifies approvals for tower and fibre deployment as the single biggest obstacle to investment by the mobile community in sub-Saharan Africa.
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