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New GSMA Report Shows Sub-Saharan Africa Leads The World In Mobile Growth And Impact


News provided by

GSMA

11 Nov, 2013, 10:00 GMT

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-- But a Supportive and Predictable Policy Environment Is the Key to Realising the Longer-Term Potential of the Mobile Sector in the Region

CAPE TOWN, South Africa, Nov. 11, 2013 /PRNewswire/ -- The GSMA today published its latest comprehensive study of the socio-economic impact of the mobile industry in Sub-Saharan Africa. The report, "Sub-Saharan Africa Mobile Economy 2013", developed by GSMA Intelligence, reveals that mobile contributes over six per cent of the region's GDP, higher than any other comparable region globally, and this is forecast to rise to over eight per cent by 2020[1]. Last year, the mobile ecosystem directly supported 3.3 million jobs and contributed US $21 billion to public funding in the region, including licence fees. By 2020, mobile is set to double its economic effect, employing 6.6 million men and women in the region and contributing US $42 billion to public funding.

Sub-Saharan Africa's unique mobile subscriber base has grown by 18 per cent annually over the last five years, making it the fastest growing region globally. By mid-2013, there were 253 million unique mobile subscribers and 502 million connections[2]. With many countries in the region seeing fixed line penetration rates of less than five per cent, mobile has emerged as the main medium for accessing the internet across Sub-Saharan Africa. While 2G connections still dominate in the region, 3G and 4G networks are gaining scale and smartphone ownership is on the rise[3]. With unique subscriber penetration rates still less than 33 per cent, this opens up a major opportunity for growth in the next five years.

"Despite the significant impact of the mobile industry in Sub-Saharan Africa in recent years, even greater opportunities are ahead," said Tom Phillips, Chief Regulatory Officer, GSMA. "Beyond further growth for voice services, the region is starting to see an explosion in the uptake of mobile data. However, a short-term focus by some countries on generating high spectrum fees and maximising tax revenue risks constraining the potential of the mobile Internet."

More Supportive Policy Needed Throughout the Region
Realising the longer-term potential of the mobile sector depends on a transparent and enabling policy environment for the industry itself and for associated verticals. Operators and investors need clarity in order to fund the substantial investment needed to extend coverage to remote areas and meet the growing demand for higher speed connectivity. The report highlighted that the future of the mobile industry depends on three key regulatory policy areas:

  1. Spectrum Management
    New spectrum should be assigned using economically efficient methods that balance the socio-economic benefits with the capital expenditure required to deploy advanced networks, and should, as a matter of priority, be assigned to those operators that have previously demonstrated an ability to use the spectrum efficiently. With a number of existing spectrum licences coming up for renewal across the region, regulators must establish a transparent and predictable process for granting spectrum licences and renewing spectrum usage rights in order to allow operators to plan their investments. The renewal of spectrum usage rights should also be based on recovering administrative costs and promoting investment instead of maximising short-term fees.
  2. Spectrum Harmonisation
    While some governments have recognised the importance of harmonising spectrum across the region, much work remains to be done to fully allocate harmonised spectrum, in particular the 700MHz and 800MHz (Digital Dividend) bands. Accelerating the analogue to digital television switchover and freeing up Digital Dividend spectrum bands for mobile broadband would significantly boost economic growth in the region. Broader economic analysis predicts that mobile broadband adoption would generate up to US $197 billion in additional GDP in Sub-Saharan Africa between 2015 and 2020 and help fuel the creation of 16 million new jobs across a variety of sectors.
  3. Taxation
    Taxation as a proportion of the total cost of mobile ownership is higher than the global average across Sub-Saharan Africa countries, reducing the affordability of mobile services for end users. Nearly half of countries in Sub-Saharan Africa impose customs duties on mobile handset imports, reaching over 30 per cent in some cases. Lowering taxation levels on the mobile sector would benefit consumers, businesses and government by lowering the cost of ownership, encouraging the take-up of new mobile services, improving productivity and boosting GDP and overall tax revenues in the longer term.

Transformative Effect of Mobile
Transparent and stable policy frameworks will support further development and adoption of mobile solutions to address a range of socio-economic challenges in Sub-Saharan Africa. For instance, there are almost 250 mHealth services currently in operation across the region, supporting patients who may not have access to local healthcare services. Mobile is also enabling financial inclusion for previously unbanked populations, with more than 100 active mobile money initiatives and 56.9 million registered mobile money users in the region. mAgriculture solutions can play an important role in improving agricultural output, which generates around a third of the region's GDP and employs nearly two-thirds of the labour force.

"The mobile industry has already had a transformative effect on the social and economic life of Sub-Saharan Africa but there is scope for far greater growth and innovation, if the right conditions are established," continued Phillips. "In addressing key regulatory concerns, policy makers throughout the region have a major opportunity to unlock the potential of a dynamic and interconnected Africa."

The full report can be viewed here: http://www.gsma.com/mobileeconomyssa

Notes to Editors
[1] The mobile industry's contribution to Sub-Saharan Africa GDP in 2012 was US $60 billion and is predicted to rise to US $119 billion by 2020.

[2] Mobile connections refer to total unique SIM cards (or phone numbers, where SIM cards are not used) that have been registered on mobile networks. Unique subscribers refer to individual mobile users.

[3] The region is dominated by lower cost mobile technologies, with over 86 per cent of connections in region at the end of 2013 expected to be 2G. The balance is almost all 3G connections, with 4G expected to account for 0.1 per cent of total connections (a figure that will rise to almost 2% in 2017).

About the GSMA 
The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world's mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as Mobile World Congress and Mobile Asia Expo. 

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.

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