Africa’s mobile market now world’s second largest, contributes $15b to government revenues – Report

Africa is now the world’s second largest mobile market by connections after Asia and the fastest growing mobile market in the world, says global mobile phone operators’ body, the GSM Association November 9, 2011.

According to GSMA’s new report titled “Africa Mobile Observatory 2011,” Africa achieved this milestone as mobile penetration reached 649 million connections in 2011 fourth quarter – having first exceeded 50 per cent mobile penetration in 2010.

“Over the past five years, the number of subscribers across Africa has grown by almost 20% each year and will reach more than 735 million by the end of 2012,” said the report.

The report said 96% of subscriptions are pre-paid with voice services currently dominating, although uptake of data services is increasing steadily. “There are currently six live HSPA+ networks across Africa, with a seventh deployment planned in the near future.” High-Speed Packet Access (HSPA) is a technical standard for wireless and broadband telecommunication.

The Association with members representing more than five billion GSM and 3GSM connections predicts that next-generation LTE networks is expected to reach 500,000 connections in Kenya, 1.1 million connections in Nigeria and 2.5 million connections in South Africa by 2015.

The mobile ecosystem in Africa, it noted, currently generates approximately $56 billion or 3.5 per cent of total GDP, with mobile operators alone contributing $49 billion.

It cited recent studies by the World Bank and others showing there is a direct relationship between mobile penetration and GDP. “In developing countries, for every 10 per cent increase in mobile penetration there is a 0.81 per cent point increase in a country’s GDP. The mobile industry contributes $15 billion in government revenues and is a significant contributor to employment in Africa.”

In 2010 alone, approximately 5.4 million people were employed directly and indirectly in the mobile ecosystem, the association added.

However, the report reveals that Africa’s huge untapped potential still remains.

It said, “36% of Africans within the 25 largest African mobile markets currently have no access to mobile services. Projections indicate that reaching 100 per cent mobile penetration could add over $35 billion in aggregate GDP – an increase of 2% – but only if governments and operators work together to bring mobile communication to the entire African population.”

Commenting on the report, Peter Lyons, Director of Spectrum Policy, Africa and Middle East, GSMA said “The mobile industry in Africa is booming and a catalyst for immense growth, but there is scope for far greater development.”

He added, “To take full advantage of its potential, African countries need to both allocate more spectrums for the provision of Mobile Broadband services, as well as introduce tax cuts for the industry. By doing so, they will increase consumption of mobile services, thereby boosting their economic and social development.”

Recently the United Nations Conference on Trade and Development (UNCTAD) said Africa is leading the trend with 51 mobile money systems in place, and as many as 37 of the deployments being in least developed countries (LDCs).

UNCTAD said in its report titled “Information Economy Report 2011: ICTs as an Enabler for Private Sector Development” that there are now more than 40 million users of mobile money citing data from subscription providers.

By Ekow Quandzie

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