The global GSM Association has published some staggering figures in Tanzania. The group collects data every five years from its 800 network providers. These figures, combined with the research conducted in the Sahel Region, provide a clear picture of mobile usage across the continent.
According to a GSMA report from 2015, almost half of Africa’s 1,17 billion people (557 million) had a mobile phone plan. The GSMA report states that by the end of 2015, nearly half of the 1.17 billion-strong African population (557 million people) had some mobile phone plan.
Studies conducted on the ground reveal two main characteristics of users. First, users favor pre-paid packages. Each subscriber has an average of 1.92 SIM cards.
This is despite the complications that this creates for operators. The market for SIM cards will be huge by 2020, with an estimated 1.3 Billion units.
By 2020, this explosive growth in demand will result in 730 million individual subscribers. The figures are different from one country to another, as is expected. Data for 2014, for example, shows that the top 5 countries (Nigeria, Egypt, South Africa, Ethiopia, and the Democratic Republic of Congo ) make up 44% of total GDP, while the 30 lowest countries only account for 10%.
The actual market penetration rate for SIM cards is 67% amongst those aged 15+ (including those who have multiple cards); certain countries (Mali and Gambia), Gabon, and Botswana boast rates of over 100%.
A mobile shop in Kabale. Adam Cohn/Flickr, CC BY-NC-ND
Mobile phones have grown in popularity as landlines failed to meet customer expectations during the second half of the 20th century. Mobile use today has an inverse relationship to landlines.
4G expands rapidly in a continent with 2G.
In Africa, 2G is still the most popular package. However, 4G/LTE connections are growing in popularity. In 2015, 46/LTE accounted for 25% of the African market. This will increase to 60% by 2020.
4G is now available across 24 countries.
The smartphone market now accounts for 23%. As infrastructure and network coverage are improved, these sales will increase. These low-cost phones currently make up half of the market.
The potential for revenue growth per subscriber is high, particularly when compared to figures in Europe or North America. However, it depends on a wider variety of options, improved network coverage, and better service quality. The average revenue per African subscriber in Africa is EUR8 (ranging between EUR2 in Ethiopia and EUR28 in Gabon), compared to EUR27 in Europe and EUR53 in North America.
The Nairobi Entrepreneurship Summit. July 2015. MEAACT/Flickr, CC BY-NC-ND
A report from 2013 showed the potential of mobiles and their ecosystem, as well as their direct and indirect contribution to growth.
In 2012, the economic activity associated with mobile phones and their lifetime accounted for approximately 3.3 million jobs and 6.3% of the GDP of this region, but market penetration was lower than 40%. With the advent of 4G-LTE, there is a huge potential for growth.
This robust activity has its unique characteristics. It is primarily a result of Africa’s informal economic system, which, on a side note, is shamelessly exploited in developed countries. Look at the ease with which a smartphone can be repaired in souks and markets like Derb Ghallef, Morocco.
The phones are not easily recyclable. The majority of phones are disposed of in landfills or unauthorised markets, such as Agbogbloshie. We must draw attention to the devastating social and environmental impacts of the industry at a time when Africa hosts COP22.
African consumers are just like their counterparts around the globe, demanding and well-informed. They are looking for clear, reliable, and smooth mobile solutions to help compensate for the perceived or real shortfalls of Africa. They have adapted the technology in innovative ways (beeping and flashing, credit transfers).
Consumers are also interested in learning, payment, and sound quality. The rarely used formal banking system can be circumvented by users, who are able to avoid the administrative and banking red tape.
The growth of Mobile Banking is phenomenal in Africa. Take, for example, the incredible success of M-PESA‘s shopping and bill settlement solutions or the market penetration for mobile education and distance learning.
The consumer’s appetite for mobile phones can be stifled. Is responsible for this phenomenon despite the fact that it is generally accepted as a technology that contributes to the development of. Consider the poor pricing due to the weak purchasing power of the continent or the under-coverage in rural areas. Due to the unreliability and structural problems of the operators, there are two SIM cards on average per person in Africa, as well as the popularity of phones with dual SIM capability.