Overview

Overall subscriber growth rates in MENA are slowing but there are diverging trends across the region. Some countries (such as wealthy GCC states) are launching advanced services based on 4G and IoT, while other markets (particularly the African Arab states) are focusing on digital and financial inclusion. Migration to mobile broadband, smartphones and other advanced services is continuing, and revenues are returning to growth. Mobile is helping deliver economic growth and innovation throughout the region. It is also addressing social challenges. Regulatory modernisation can help drive growth and stability going forward.

INDUSTRY OVERVIEW

By mid-2016, there were 339 million unique subscribers across the MENA region, accounting for 60% of the population. This followed relatively strong subscriber growth of 6% on average annually over the last five years. The regional penetration figure masks significant variations at the country level in terms of mobile market maturity. In the GCC states, 77% of the population on average are mobile subscribers, and three of these markets (Bahrain, Kuwait and the UAE) have a subscriber penetration rate of over 90%, placing them among the most penetrated mobile countries in the world. By contrast, the non-GCC Arab States have an average subscriber penetration rate of 56%, and this sub-region is home to three markets with subscriber penetration rates below 30% (Comoros, Djibouti and Somalia).

Subscribers in MENA are increasingly migrating to mobile broadband services, with mobile playing a crucial role in providing Internet access given the general lack of fixed broadband infrastructure in the region. By the middle of 2016, mobile broadband (3G and above) accounted for more than 40% of connections, up from just under 30% in 2014.

MOBILE DRIVING GROWTH

In 2015, the total value added generated by the mobile ecosystem was around $52 billion (or 1.4% of GDP), with network operators accounting for the vast majority. In addition to their direct economic contribution, firms in the mobile ecosystem purchase inputs from their providers in the supply chain. We estimate that in 2015, this additional economic activity generated a further $13 billion in value add (or 0.3% of GDP) in the region.

Mobile operators and the ecosystem provided direct employment to approximately 0.5 million people in the region in 2015. The mobile ecosystem also makes a significant contribution to the funding of public sector activity in the region through general taxation. For most countries, this includes value added tax, corporation tax, income tax and social security from firms and employees. We estimate that the ecosystem made a tax contribution to the public finances of the region’s governments of $15 billion in 2015.

MOBILE ADDRESSING SOCIAL CHALLENGES

Across the highly diverse MENA region, 40% of the population do not currently subscribe to mobile services, and a further 24% only use voice and text services. It is primarily in the developing countries of the region where subscriber penetration is at its lowest: in Somalia for example, only 30% of the population subscribe to mobile services, leaving 70% unconnected. Meanwhile in Mauritania, although subscriber penetration is relatively high, only 14% of the population use the mobile internet. These developing countries face numerous challenges to connectivity, including difficulties in expanding network coverage, affordability, limited digital skills and a lack of locally relevant content. Mobile is helping overcome these barriers, while also providing identification solutions and responses to humanitarian crises.

GOVERNING DYNAMIC DIGITAL MARKETS

Digital technologies and services are transforming the lives of people throughout MENA. They are fuelling economic growth, making businesses more efficient and effective, and helping policymakers pursue their objectives. Mobile connectivity is at the heart of this new digital era. To enable the digital economy to develop further, governments across this diverse region need to ensure that all their citizens can access high-quality connectivity whether they are at home, at work or on the move. Information, communication and entertainment need to be accessible everywhere. The ultimate goal for policymakers has to be the ubiquitous availability and adoption of broadband.