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Africa: Fast-Paced Mobile Growth Continues
AfricaFocus Bulletin
Nov 16, 2011 (111116)
(Reposted from sources cited below)
Editor's Note
"With over 620 million mobile connections as of September
2011, Africa has overtaken Latin America to become the
second largest mobile market in the world, after Asia. Over
the past 10 years, the number of mobile connections in
Africa has grown an average of 30% per year and is forecast
to reach 735 million by the end of 2012." - GSMA African
Mobile Observatory
It is no longer news that mobile phone usage and
applications in Africa have been growing rapidly. But a new
report released this month from the GSM Association (GSMA),
the operator-led trade association representing the global
mobile industry, has fuller documentation, along with a
prediction that the rapid pace of expansion is set to
continue for some years to come. Although the figures quoted
above overestimate the number of users, because of multiple
connections by some users, the growth is still
extraordinary. Its implications go far beyond the
telecommunications sector, as Africa is also pioneering new
mobile uses.
This AfricaFocus Bulletin contains the executive summary and
brief excerpts from the full report. The full report, which
also contains extensive tables and graphs not easily
reproducible here, is available at: http://www.gsmworld.com / direct URL:
http://tinyurl.com/cvvrewd
One interesting table that is included below, however, lists
the top 25 countries in Africa by mobile connections, along
with their percentage of the market. The top five are
Nigeria, with 89 million connections; Egypt, with 81
million; South Africa, with 59 million; and Algeria and
Morocco, with 37 million each. They are followed by Kenya,
Sudan (including both North and South), Tanzania, Ghana,
Cote d'Ivoire, Uganda, DR Congo, Tunisia, Ethiopia, Libya,
Angola, Cameroon, Mali, Senegal, Zimbabwe, Benin,
Mozambique, Burkina Faso, Zambia, and Madagascar.
For previous AfricaFocus Bulletins on information and
communication technology issues, and links to other sources,
visit http://www.africafocus.org/ictexp.php
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Several weeks ago I was interviewed about AfricaFocus on on
Walter Turner's Africa Today program at KPFA in the
California Bay Area. The interview ran on November 14, and
is available for listening (streaming or download of audio
file at http://www.kpfa.org/archive/id/75153
++++++++++++++++++++++end editor's note+++++++++++++++++
African Mobile Observatory 2011
Driving Economic and Social Development through Mobile
Services
November 2011
For further information please contact: info@gsm.org, GSMA
London Office, T +44 (0) 20 7356 0600
http://www.gsmworld.com
Executive Summary
This is the first African edition in the GSMA Mobile
Observatory series. This Observatory provides a
comprehensive review of the African mobile communications
industry. Included are the latest statistics and market
developments, as a reference point for mobile industry
participants, policy makers and other interested
stakeholders. It covers the state of the industry, including
the evolution of competition, innovation in new products,
services and technologies and the industry's contribution to
social and economic development in Africa.
The mobile industry in Africa is booming.
With over 620 million mobile connections as of September
2011, Africa has overtaken Latin America to become the
second largest mobile market in the world, after Asia. Over
the past 10 years, the number of mobile connections in
Africa has grown an average of 30% per year and is forecast
to reach 735 million by the end of 2012.
Fierce competition has driven down prices and increased
penetration.
Price wars have been common across the continent as
operators compete for market share with innovative revenue
and pricing options - operators have reduced prices an
average of 18% between 2010 and 2011, making mobile
connectivity more broadly affordable to the masses. 96% of
subscriptions are pre-paid with voice services currently
dominating, however the uptake of data services is
increasing rapidly. For example in Kenya data revenues,
including SMS, have increased at a remarkable 67% CAGR over
the last 4 years and now represent 26% of total revenues.
The Mobile Industry in Africa contributes US$56bn to the
regional economy, equivalent to 3.5% of total GDP.
In particular, the mobile ecosystem is estimated to employ
over 5 million Africans and is contributing to bringing
mobile services to customers right across the continent.
However there remains huge untapped potential - 36% of
Africans, within the 25 largest African mobile markets
(A25), still have no access to mobile services. Projections
indicate that raising the whole region to 100% mobile
penetration (see figure 3), could add an additional $35
billion in aggregate GDP to the region, equivalent to a
further 2% increase.
The mobile industry in Africa is an enabler of economic
development far beyond its immediate domain.
Mobile operators have driven the emergence of a unique
industry in innovative mobile services in Africa. Mobile
Value-Added Services have been launched throughout the
continent to enable and support agriculture, banking,
education, healthcare and gender equality. In particular,
the emergence of mobile money transfers and mobile banking
puts Africa firmly at the forefront of the global Mobile
Money industry. Beyond mobile services, the mobile industry
is also contributing to rural electrical distribution with
lower carbon emissions and facilitating the work of NGOs
across the continent. Many African governments have
prioritized ICT policy as a key driver for development.
Key issues for future growth
For the mobile industry to continue to serve as a catalyst
for growth, sufficient spectrum is needed for the provision
of mobile broadband services.
African countries have currently allocated considerably less
spectrum to mobile services than developing countries in
Europe, the Americas and Asia. Allocating the Digital
Dividend spectrum to mobile services will enable the mobile
industry to accelerate its efforts to bring connectivity and
information to large swathes of rural Africa.
African governments are slowly shifting to more transparent
ICT regulation, but limited spectrum availability remains a
key barrier to sustaining long term growth. The GSMA
supports a technology neutral approach to the use of all
existing mobile bands; governments in Africa should allow
deployment of mobile technologies that can technically coexist
according to what are relevant internationally
harmonised bands for their region. The GSMA encourages
governments in the region to establish clear guidelines for
spectrum planning, licensing, pricing and re-farming.
African governments must clarify future spectrum
availability of both the coverage bands (700, 800, and 900
MHz bands) and the capacity bands (1800, 2100, 2300, 2600,
and 3500 MHz bands).
Regulation practices must continue to improve to ensure the
effective long term development of the mobile sector.
64% of African countries remain in the bottom quartile of
the World Economic Forum's political/regulatory index. GSMA
research indicates that total tax intake of governments
could be boosted, by reducing mobile specific taxes across
Africa. Universal access has also been promoted by most
African governments using taxation schemes, but there is
limited transparency around the distribution of funds.
By working in partnership, mobile operators and African
governments can continue the remarkable growth story of the
African mobile industry. The benefits that mobile services
have already brought to hundreds of millions of Africans can
be extended to those who have yet to connect. By so doing,
the African continent can continue to bring not only
communication services, but also improved financial
services, healthcare and education to its people and drive
an increase in the economic wealth and development.
Excerpts from full report:
Geographic Scope of this Study
Africa comprises a vast region of 54 countries covering 30
million square kilometres and 1.0 billion people. Referring
to Africa as one continent would be to overlook the
intricacies and complexities of life within a huge diversity
of peoples, languages and cultures within and across
national boundaries. It would be impossible to cover all
these countries in the detail and thoroughness that they
deserve. Therefore within this report we consider the 25
countries which contain 91% of the continent's mobile
connections. These markets (hereafter referred to as the
A25) are extremely diverse economically, culturally,
geographically and politically and are therefore a good
representation of Africa as a whole.
Figure 1: Africa 25 and total mobile connections (2011 YTD)
Country Mobile subs Percentage of subs
Nigeria 89,343,017 14%
Egypt 80,616,921 13%
South Africa 59,474,500 10%
Algeria 36,741,368 6%
Morocco 36,522,899 6%
Kenya 26,135,115 4%
Sudan (inc.
South Sudan) 24,628,765 4%
Tanzania 23,334,395 4%
Ghana 20,049,412 3%
Cote d'Ivoire 17,991,035 3%
Uganda 14,754,199 2%
DR Congo 14,098,685 2%
Tunisia 12,254,728 2%
Ethiopia 11,902,288 2%
Libya 11,158,560 2%
Angola 10,797,078 2%
Cameroon 10,658,991 2%
Mali 10,000,229 2%
Senegal 9,686,372 2%
Zimbabwe 8,281,749 1%
Benin 7,996,577 1%
Mozambique 7,750,845 1%
Burkina Faso 6,740,148 1%
Zambia 6,544,630 1%
Madagascar 6,147,499 1%
Others 56,190,285 9%
Total 619,800,290 100%
1. Introduction
The Mobile Observatory series includes
reports on the large and mature European market, the
extensive and dynamically evolving market of the AsiaPacific
region and the fast growing Latin-American region.
These reports underline the industry's commitment to
transparency and to engaging with a wide set of stakeholders
in planning its future direction.
This is the first African edition in the GSMA Mobile
Observatory series. This Observatory provides a
comprehensive review of the African mobile communications
industry. Included are the latest statistics and market
developments, as a reference point for mobile industry
participants, policy makers and other interested
stakeholders. It covers the state of the industry, including
the evolution of competition, innovation in new products,
services and technologies and the industry's contribution to
social and economic development in Africa.
The report integrates data from a wide range of existing
sources to provide a comprehensive picture of the African
mobile industry. These include public sources such as the
ITU, World Bank and research by National Regulatory
Authorities as well as commercial providers such as Wireless
Intelligence, Informa, Gartner, Buddecomm and IDC. Where
appropriate, data from different sources has been combined
to show more complete industry trends. The regular
geographic scope of this study consists of the 54 countries
of Africa -- both North Africa and sub-Saharan Africa. All
references to 2011 YTD correspond to the first nine months
of 2011. All references to African statistics refer to the
largest 25 African countries by number of mobile connections
unless stated otherwise. This report was commissioned by the
GSMA and developed independently by A.T. Kearney.
3. Competitive landscape and consolidation
Key Messages
- With over 620 million mobile connections as of September
2011, Africa has overtaken Latin America to become the
second largest mobile market in the world, after Asia
- Africa continues to be the fastest growing mobile market
in the world
- The African mobile market is highly competitive and has
experienced significant price reductions over the period
2007-2011, with decreases of up to 60% in a matter of months
in some markets
3.1. Market dynamics
In 2010, the total number of mobile
connections in Africa surpassed both Western Europe and
Eastern Europe for the first time. As of September 2011,
with 620m connections, Africa has overtaken Latin America,
making it the second largest mobile market in the world
after Asia Pacific. From 2007-2011, the number of
connections has more than doubled from 283m to 620m. This
represents a staggering 22% CAGR over these four years and
the growth is expected to continue at the fastest rate of
all global regions over the next 4 years.
The significant growth in mobile subscribers in Africa has
been driven by several key factors:
- The opening of markets to the forces of globalisation and
foreign direct investment
- The introduction of low-cost handsets and the reduction of
mobile usage prices, driving down the minimum cost of mobile
ownership
- Substantial economic development in the region, increasing
the prosperity of citizens and hence an increasing
affordability of communication services
- The success of cost-effective pre-paid services (96% of
African connections vs 82% in Latin America and 52% in
Europe in 2011) allowing consumers to take control of their
spending and gain access to flexible, low-cost voice and SMS
services
- The ambitious rollout of mobile network infrastructure by
operators to expand geographic and population coverage
combined with the lack of adequate fixed-line infrastructure
and service
These factors have contributed to a growth in mobile
population penetration across Africa from 2% in 2000 to more
than 57% ten years later (see Figure 3). 2010 was a landmark
year for Africa as mobile penetration passed 50% for
the first time. Despite this impressive growth, these
figures go to underline the further growth potential and
necessary investment required to connect the remaining
population. Whilst mobile connection growth is expected to
slow to 11% CAGR from 2011 to 2015, in several markets such
as Zimbabwe and Rwanda connections are still growing at 50%
p.a. from a low existing customer base. By 2015, the total
number of connections is estimated to reach 84% of the total
African population.
...
Mobile networks are leading the expansion of broadband
internet access across Africa, with broadband access today
largely confined to a small minority of the more developed
Africa countries. Poor infrastructure remains a key barrier
to the expansion of broadband. However, the roll-out of 3G
services has provided a viable alternative to fixed
broadband, in the form of internet enabled handsets and
wireless modems/dongles. Whilst penetration rates are still
low, to date growth in mobile broadband has been exponential
and the explosive growth is expected through to at least
2015. The number of connections has increased from c. 0.2m
in 2006 to c. 15m by the end of 2010 and is expected to hit
over 230m by 2015 (see Figure 9). Such is the growth
predicted, that Cisco estimates that by 2015, sub-Saharan
Africa will have more people with mobile access than with
access to electricity at home.
6. Corporate sustainability: The environmental and social
impact
Key Messages
- Mobile operators have driven the emergence of a unique
industry in innovative mobile services in Africa enabling
and promoting agriculture, banking, education, health and
gender equality
- 86% of NGO employees use mobile phones which are
considered an essential tool
- Mobile phones can now be used as a mass communication
system throughout Africa in the event of emergencies and
environmental disasters
- The mobile sector now plays a key role in promoting rural
access to electricity and sustainable energy
6.1. The social impact of the mobile industry
By 2015, it is predicted that sub-Saharan Africa will have
more people with mobile network access than have electricity
at home. As mobile service penetration across Africa begins
to exceed that of other core infrastructure, the mobile
industry is beginning to have an increasingly significant
impact on society. As well as improving communication, the
mobile phone is facilitating improvements in agriculture,
banking, education, healthcare and the empowerment of women.
m-Agri
The International Food Policy Research Institute estimates
that 65% of the population in sub-Saharan Africa relies on
subsistence farming. Crop yields can be highly variable
which can severely strain farmers' ability to feed
themselves and their families. One of the key problems is
that poor farmers lack access to vital agricultural
information, training and advice on topics such as pests,
diseases, weather, fertilizers and proven farming practices.
Mobile connectivity offers a new opportunity to bridge this
gap and to connect the farmer with up-to-date agricultural
knowledge.
In Kenya, where 70% of the population is employed in
agriculture, the GSMA Development Fund established M-Kilimo,
a dedicated helpline providing information and advice to
small-hold farmers. Typically, the helpline experts dealt
with four main topics of enquiry:
- Agricultural tips and efficient farming practices
- Questions on plant and animal diseases and treatment
- Agriculture-specific weather forecasts
- Market price information
Since the dialogue between the farmer and the helpline
expert occurs in real time, most problems can be resolved
during the call. However, complex queries sometimes need
more time and M-Kilimo undertakes to try to resolve these
more complicated issues within a 24hr period.
m-Banking
Mobile banking services have been widely publicized as
revolutionizing access to financial services to low income
groups. In Kenya in 2007, Safaricom's M-Pesa money transfer
service was the first to launch. In the first 30 months of
service, 8.5m Kenyans registered50 as M-Pesa users and
US$3.7bn worth of transfers were made (approximately 10% of
Kenyan GDP). M-Pesa allows users to deposit, transfer and
withdraw cash via Safaricom's M-Pesa agents, of which there
were 18,000 in April 2010, compared to 491 bank branches.
These developments enable subscribers to transfer money to
family members, make a payment for goods or services or
simply save their money in a more secure form than cash.
Money transfer services have since been launched by many
other mobile operators in several other countries including:
Ghana, Tanzania, Uganda, Nigeria and South Africa.
Since the original launch of M-Pesa, the mobile money
industry has continued to develop in many African countries.
Today, it has reached a level of sophistication not seen
anywhere else in the world. In addition to transaction
services, Africans are now able to use mobile banking to
access savings accounts, agriculture insurance, pensions,
health insurance, micro-finance loans and life insurance
products. For example, Safaricom in partnership with The
Equity Bank in Kenya provides customers with an M-KESHO
account allowing them to save, buy insurance and arrange
micro-finance loans all via mobile banking. Similarly, Tigo
Ghana's "Life Care" service offers Life Insurance with
monthly premiums as low as GHC1 (Euro 0.54).
Studies have shown that in addition to providing greater
stability to low income groups, mobile banking often acts as
an entry to more formal banking services. Mbiti and Weil
show that the introduction of M-Pesa has led to a 58%
increase in the number of Kenyans who have bank accounts.
Therefore, not only do these innovative mobile services
provide an immediate service to the poor, but they act as a
catalyst to the on-going development in the wider economy.
In 2009, the GSMA launched the Mobile Money for the Unbanked
(MMU) programme, aimed at accelerating the provision of
money services to those living on less than $2 per day.
Supported by a grant from the Bill & Melinda Gates
Foundation, MMU has the goal of reaching 20 million people
by 2012 and ultimately to make mobile money a mainstream
business.
m-Learning
Education is widely regarded as the best long-term tool to
improve the standards of living for the poor. M-learning
initiatives facilitate education and learning in even the
most remote locations, and provide a supplement to bricksand
-mortar schools in areas where schools are sparse and
access to education is limited. Low income groups' access to
education is restricted by many factors including: the cost
of education and expectations that children may undertake
child employment, as well as language and social barriers.
M-learning offers a solution to several of these key
challenges. It is inclusive and non-discriminatory, it can
be accessed from wherever the user wishes to learn, can be
tailored to individual learning needs and can progress at
each users' own pace, while fitting around income generating
activities. M-learning can also help to overcome the gender
inequality in many developing countries, by providing women
with a safe learning environment without leaving the
household or community.
In addition to providing general education, m-learning is
also providing valuable support to professionals in on-thejob
training. Community Health Workers (CHW) in the UN's
Millennium Villages in Uganda, Rwanda and Kenya have access
to m-learning modules on their mobile phones. Information on
reproductive health and care for new-borns are two of the
subjects CHWs can download from a central database to their
mobile phone. Mobile networks provide the privacy, quality
of service and interoperability required to deliver this
learning application, to improve the lives of the
communities that the CHWs serve.
m-Health
Sub-Saharan Africa has the lowest average life expectancy of
any region in the world at 52 years. In Lesotho, it is only
46 years. In this context, access to appropriate, quality
healthcare remains a major challenge to improving the
standard of living for Africa's population.
Mobile technology is emerging as an important tool to
improve the delivery of healthcare across Africa and is
currently being used in a number of areas:
- Capturing and analysing data for disease surveillance
- Providing remote diagnoses via telemedicine
- Supporting community health workers in gathering and
managing health information
- Improving access to health education, information and
resources through health hotlines
- Coordinating drug and medical supply distribution
In Rwanda, MTN, Voxiva and the GSMA Development Fund have
deployed a system to enable healthcare workers in the field
to use mobile phones to collect data related to outbreak of
contagious disease, numbers of patients, drug stocks etc.
The use of mobile technology means that this information is
available, and can be acted upon in real time, rather than
the traditional paper-based systems which can cause errors,
inefficiency, and delay.
In Ghana and Nigeria, systems have been deployed to allow
users to check the authenticity of pharmaceuticals.
Counterfeit drugs are a major issue in Africa and the
scheme, endorsed by the West Africa Health Organization, is
being promoted by a number of drug companies.
GlaxoSmithKline is one of the recent pharmaceutical firms to
sign up to the initiative; which enable users to send a code
printed on the drug packet via SMS and receive a reply,
either verifying the authenticity of the drugs or giving a
warning that the product may be fake and providing a
helpline number to call for advice.
m-Women
The GSMA Development Fund formed the mWomen programme after
identifying a sizeable gender gap in mobile phone ownership
in middle and lower income countries. Across Africa, women
are on average 23% less likely to own a mobile phone than
men, meaning that women are missing out on many of the
social and economic benefits that mobile connectivity
brings. A recent survey of female mobile phone users in
lower and middle income countries showed that 93% of women
say they felt safer and more connected to friends and family
with a mobile phone, whereas 85% felt more independent. 41%
of women reported an increase in earnings or professional
opportunities due to owning a mobile phone, a figure which
rises to 55% among female business owners.
In Liberia, MTN recognised that women in the market were
underserved and only required regular contact with a small
circle of family and friends. MTN developed new tariff plans
for the "Her & Home" segment offering discounted calling
during relevant times of day and preferential rates for a
selected group of friends and family. The marketing of these
services were also designed to appeal to the needs of women
to encourage uptake.
The Authors
The GSM Association (GSMA) is the operator-led trade
association representing the global mobile industry. The
GSMA represents the interests of the worldwide mobile
communications industry. Spanning 219 countries, the GSMA
unites nearly 800 of the world's mobile operators, as well
as more than 200 companies in the broader mobile ecosystem,
including handset makers, software companies, equipment
providers, Internet companies, and media and entertainment
organisations. The GSMA is focused on innovating, incubating
and creating new opportunities for its membership, all with
the end goal of driving the growth of the mobile
communications industry.
A.T. Kearney is a global management consulting firm that
uses strategic insight, tailored solutions and a
collaborative working style to help clients achieve
sustainable results. Since 1926, we have been trusted
advisors on CEO-agenda issues to the world's leading
corporations across all major industries. A.T. Kearney's
offices are located in 55 major business centres in 38
countries.
The firm's telecoms practice works with the senior
management teams of fixed line, mobile, cable and satellite
operators as well as vendors on their most important
strategic and operational challenges.
AfricaFocus Bulletin is an independent electronic
publication providing reposted commentary and analysis on
African issues, with a particular focus on U.S. and
international policies. AfricaFocus Bulletin is edited by
William Minter.
AfricaFocus Bulletin can be reached at africafocus@igc.org.
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