General

Why mobile connectivity in Sub-Saharan Africa might be overrated

June 22, 2017 · 3 min read
No Image

With an estimated population of over 800 million, Sub-Saharan Africa (SSA) is one of the most populous regions of the world. With this number projected by the United Nations to more than double by 2050, it is also the fastest growing region.

But even as population rises, mobile subscriptions continue to see a steady decline. A 2015 report by the GSM Association (GSMA) projects a 6% drop in subscriber growth between 2015 and 2020.

Real-time data from GSMA intelligence, a research arm of the GSMA, corroborates this fact. According to live data, there are now over 5 billion unique mobile subscribers (not to be confused with multiple mobile connections which is over 8.1 billion) in the world — about two-thirds of the global population.

However, SSA is responsible for only a measly 9% of global mobile subscriptions. That puts the region at a close tie with Europe and Latin America, two far less populated regions.

Compare this to Asia, home to India and China, which has the fastest growing population rate yet still manages to account for 55% of mobile subscriptions. It comes as no surprise that India continues to be pinpointed as the country to drive future mobile subscriber growth. According to GSMA:

The most highly penetrated region in the world is Europe, where 86 per cent of citizens are subscribed to a mobile service. Sub-Saharan Africa is the least penetrated region at 44 per cent. It is forecast that the number of unique mobile subscribers worldwide will increase to 5.7 billion by the end of the decade2. By that point, almost three-quarters of the world’s population will subscribe to a mobile service. India is expected to account for the largest share of growth over this period, responsible for around 30 per cent of new unique subscribers by 2020.

Why is SSA playing catch up?

There are a number of valid reasons why SSA continues to play catch up. Despite the advent of 3G and 4G, network coverage in the region is around 50% and 16% respectively, which according to GSMA is around 30% lower than the global average. The reason for this is not far-fetched.

More than half of the people in SSA live in rural areas where, due to the sparse population distribution and extremely low purchasing power, it makes little or no commercial sense for network providers to expand to. There is also the challenge of literacy. At less than 60%, Africa has some of the lowest literacy rates in the world. This hampers the usage and adoption of mobile phones at a reasonable scale.

What this means for African entrepreneurs

Africa is repeatedly touted as a ‘mobile-only’ continent, and rightly so. However, businesses that primarily target mobile subscribers will want to pay close attention to these numbers, over the coming years, and ignore ‘vanity metrics’. The estimation that the subset smartphone market in Nigeria, for instance, is at 30% penetration is quite misleading. Most reports that tout these figures do not monitor the monthly active usage of mobile internet, without which smartphones are almost useless. I have written extensively about why apps are overrated, as far as Africa is concerned.


Suggested ReadApps are overrated: How Nigerian developers can tap into the SMS goldmine


Should GSMA’s projections prove to be dead-on, a resulting effect would be an over-saturation of the market, as many more business would have sprung up to serve the near stagnant space. By that time, even the dumbphone market could be equally affected.

While the big guns continue to eye expansion as an avenue for increasing profit margins, small and medium scale entrepreneurs will need to find  innovative ways to circumvent this. This may involve partnerships with the big guns, or possible peer-mergers.

What do you think? Will the mobile connectivity market continue to be a viable area for businesses to explore or could we be seeing a diversion of interests to more promising markets in Asia?

Photo Credit: ZICTA / michael pollak via Compfight cc


Techpoint is conducting a survey of tech worker salary satisfaction in Nigeria. Please take just three minutes to fill this anonymous form. Thank you.

Múyìwá Mátùlúkò

Múyìwá Mátùlúkò

Author

I bully myself because I make me do what I put my mind to. Find me on Twitter @MuyoSan.

Latest Stories

Loading...

Techpoint Logo Footer
location

43b, Emina Cres, Allen, Ikeja.


Techpoint instagramTechpoint twitterTechpoint facebookTechpoint youtubeTechpoint linkedin

© 2022 Techpremier Media Limited. All rights reserved