The countries covered in this report include: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Chad, Cote d’Ivoire, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, South Sudan, Sudan, Swaziland, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe.
Improved mobile network capability in Africa stimulating smartphone adoption
Within Africa there is considerable diversity in the availability and capability of mobile telecom infrastructure. Vast tracks of the continent, particularly in the northern desert regions, are sparsely populated with little in the way of network coverage. However, intense investment programs undertaken by several pan-regional operators in recent years has meant that population coverage in most countries is excellent.
Much of the phenomenal growth in the take-up of mobile voice and data services has stemmed from the lack of fixed-line alternatives. Fixed-line networks provide limited reach, particularly so in rural areas but also in many urban areas. Before market liberalisation efforts started some two decades ago most incumbent telcos were government-owned enterprises. There was little commercial incentive to invest in infrastructure, and combined with a lack of regulatory oversight, poor management and government neglect, fixed-line penetration remained very low by global standards. In many countries, such as in the DRC, Sudan, Mozambique, South Sudan and Libya, war and civil conflict largely destroyed what little infrastructure there was in place.
Mobile voice and data services were able to fill this void very effectively. As a result, in many countries in the region the use of telecoms services is morphing from being predominantly mobile to being solely mobile. Investment in fixed-line infrastructure is being side-lined in favour of mobile infrastructure. Operators are predominantly investing in spectrum, particularly in the 700MHz band as this is being released into 2017 and 2018 following the switch from analogue to digital broadcasts. They are also strengthening the robustness of their networks by migrating from 3G to LTE-based services. This in turn is being supported by increased international connectivity from a number of new submarine and terrestrial cables. These cables are providing the required backbone infrastructure to support the growing flow of data. Prominent projects include the SACS cable running between Angola and Brazil, with onwards connectivity to Miami, as well as the Liquid Sea cable being built by the pan-regional infrastructure provider Liquid Telecom along the continent’s east coast.
Smartphones are increasingly becoming the principal mobile device used among consumers. The adoption of smartphones is being encouraged by a plethora of cheaper units manufactured locally. The growing take-up of such devices is in turn supporting a tremendous growth in m-commerce, m-money and m-banking services. With the majority of Africans being unbanked, m-payment systems are thriving in most markets where they have been deployed. This has been helped by operators facilitating money transfers between their cross-border networks, as also by co-operation among different players and by a wider number of banks hosting such services. M-money is particularly popular in markets such as Kenya, though the more sophisticated banking sector in South Africa was a contributing factor in the Vodacom’s M-Pesa service being withdrawn from that market in mid-2016.
More than three quarters of mobile subscribers on the continent are expected to subscribe to broadband services by 2020, compared to about a fifth in early 2016. With more than a billion mobile subscribers in the region this presents a vast market for vendors and application providers. Although the relatively low purchasing power in the region will not translate into a similarly rapid growth in revenue, considerable potential remains.