Mobilizing Sub-Saharan Africa: Nigeria and Ethiopia Lead Cellular Boom

The Global System for Mobile Communication Association (GSMA), an organization that gathers mobile operators and associated firms to endorse the best practices in the telecom industry, presented its report on “Mobile Economy For Sub-Saharan Africa 2015”. This report was unveiled at Mobile-360, a major industry event, on the 8th of October 2015.

The GSMA’s report adds to the growing body of evidence demonstrating the formidable strength and potential of the African mobile market. Based on its findings, Ericsson, a multinational networking and telecommunications company, estimates that by 2020, there will be 50 billion devices connected to the internet. Fredrik Jejdling, Ericsson’s president and regional head for sub-Saharan Africa, predicted during a press conference in Nigeria that 90 percent of the world’s population over the age of 6 will own a mobile phone by 2020.

Further insights from the report suggest that Africa, along with Asia, will soon dominate 80% of the global smartphone market. This rapid expansion is due to the considerable population growth predicted for these regions. For instance, predictions for 2050 list three African countries – Nigeria (413 million), Congo (195 million), and Ethiopia (188 million) – among the most populous in the world.

The report’s noteworthy findings from GSMA can be summarized as follows:

The mobile industry contributed $100b/20tr Naira/10.3tr KES to the sub-Saharan economy in 2014, accounting for 5.7% of the region’s GDP. Though the mobile market recorded a growth rate of 13% from 2010 to 2015, this exponential surge is predicted to decelerate to 6% from 2015 to 2020.

In terms of growth rates, Sub-Saharan Africa has overtaken Latin America, positioning it as the world’s fastest-growing region for mobile subscriptions. Approximately 41% of Sub-Saharan Africans, nearly 390 million people, are expected to be unique mobile subscribers by the end of this year. By 2020, Nigeria and Ethiopia, with an anticipated combined population of over 320 million, are predicted to make up over 40% of the region’s subscribers. Furthermore, it is forecast that by 2020, sub-Saharan Africa will have over half a billion unique mobile subscribers, this would represent almost half of the region’s population.

According to the GSMA report, the number of Sub-Saharan mobile subscribers is expected to reach 722 million by the end of the year. Migration to higher-speed networks and the rapid adoption of smartphones, largely due to falling device prices, is predicted to continue unabated. As a result, mobile broadband connections are projected to account for almost 60% of the region’s digital connectivity by the end of the decade.

The telecommunication industry’s contribution to the economy is also considerable. The mobile industry directly employed 2 million people in 2014, and the projection suggests an additional 700k jobs being created in the field by 2020. This increase would bring the total to 2.7 million direct employments, with an additional 3.4 million indirect jobs in the same year.

Despite the promising statistics, GSMA’s report also pointed out some challenging areas. On the downside, more than half of sub-Saharan residents currently live in rural areas with minimal access to mobile services. There are economic drawbacks for operators investing heavily in areas where the residents lack the financial power to pay for these services. Additionally, the penetration of broadband services into many African countries has led to a segment of mobile subscribers now depending on their mobile phones chiefly for voice calls among other value-added services.

The full GSMA report can be accessed here.