Mobile in Sub-Saharan Africa Scaling Rapidly

Your Excellencies, distinguished guests, ladies and gentlemen, thank you for joining us this week at Mobile 360 – Africa.

As we open the conference this morning, I’d like to share some thoughts on mobile in the region, including highlights from our Mobile Economy report on Sub-Saharan Africa, which was released just this morning. It is clear that mobile technology plays a central role in addressing a range of socioeconomic developmental challenges across the region, particularly digital and financial inclusion. Greater digital inclusion will drive economic and infrastructure development, increasing productivity and employment across the economy, and will improve access to vital services such as education and healthcare.

Mobile in Sub-Saharan Africa has scaled rapidly – there will be 386 million subscribers by the end of this year. We see the continued migration to higher speed networks and smartphones – mobile broadband connections will grow from almost a quarter of the connections base this year to 57 per cent by the end of the decade.

It is forecast that smartphones will account for half of all mobile connections in the region by 2020. Falling devices prices are driving rapid adoption of smartphones – more than 400 million new smartphone connections will be added by 2020, for a total installed base of over half a billion. And as of the middle of this year, 200 million individuals across the region were accessing the internet through mobile devices, a figure that will almost double by 2020.

At the same time, mobile has had significant impact on Sub-Saharan Africa economy. In 2014, mobile contributed $102 billion to regional GDP, or 5.7 per cent of GDP, and this is expected to grow to $166 billion, 8.2 per cent of GDP, by 2020. The mobile ecosystem directly and indirectly supported 4.4 million jobs in the region in 2014, and this is forecast to increase to more than 6 million by 2020.

And mobile continues to invest – capital investment in 2014 totalled $9 billion and is set to reach $13.6 billion by 2020. In terms of public funding, we estimate that the ecosystem made a contribution to the finances of the region’s governments via general taxation of approximately $15 billion in 2014.

Sub-Saharan Africa has been a centre of innovation over last 5 years, in areas such as mobile money and crowdsourcing. A number of incubators and accelerators have developed and a flourishing app economy is emerging in the region.

Much More to Be Done to Extend the Power of Mobile

Despite this progress, there is still much to be done to extend the transformative power of mobile to the rest of the population. We see subscriber growth slowing over the coming years – the growth rate in the second half of this decade will be around 7 per cent, compared to 14 per cent in the first half. More than 60 per cent of the population will still lack internet access by the end of the decade.

Improving the affordability of mobile services and extending network coverage to rural areas are particular challenges, given the high levels of poverty and the large proportion of the population living in rural areas. Operators, other ecosystem players, governments and regulators all have a role to play in addressing these challenges.

Driving the Development of Digital Economies

The ongoing vibrancy of the mobile economy in Sub-Saharan Africa depends heavily on the actions of the region’s policymakers and regulators. If governments can create a flexible, forward-looking and fair regulatory environment, we can further nurture and encourage the innovation enabled by mobile technologies and services.

Policymakers and regulators in the region can drive the development of their digital economies by:

• Releasing more internationally harmonised spectrum for mobile broadband services, fuelling investments in both greater capacity and wider coverage;

• Introducing incentives to encourage mobile operators to deploy infrastructure in remote and economically challenging areas;

• Revising their taxation policies to encourage adoption and usage of mobile services, together with greater investment in networks; and

• Honing their competition policies to improve the business case for rolling out new digital infrastructure and increasing connectivity.

With digital services enriching and enhancing the daily lives of people around the world, we encourage governments in Sub-Saharan Africa to take these actions sooner rather than later. Underpinned by enlightened regulation, a vibrant mobile economy can continue to generate substantial socio-economic benefits for people across the region.