Subscribe
  • Home
  • /
  • Broadband
  • /
  • Mobile tech not bringing enough economic benefit for Africans

Mobile tech not bringing enough economic benefit for Africans

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 13 Jul 2017
Sub-Saharan Africa has 420 million unique mobile subscribers, which is only a penetration rate of 43%.
Sub-Saharan Africa has 420 million unique mobile subscribers, which is only a penetration rate of 43%.

Africa's mobile revolution holds huge opportunities for the continent but is still missing the mark when it comes to actual economic benefit for Africans.

This was the view of Rapelang Rabana, founder and CEO of education technology company Rekindle Learning, speaking as part of a panel discussion at the AfricaCom 2017 launch event in Johannesburg.

"Obviously, I think we are all quite fascinated by mobile, digital and all things Internet, and the potential of what it can do. While we have come a very long way in the last 10 years, it is always important to put this in perspective that Africa still contributes less than 5% to global trade and global GDP, so we still haven't made the economic impact we need to make," she said.

According to "The Mobile Economy: Sub-Saharan Africa 2017" report released by GSMA this week, mobile technologies and services generated just 7.7% of GDP in Sub-Saharan Africa in 2016.

GSMA found that last year, mobile-related tech and services generated $110 billion (R1.5 trillion) of economic value in the region. This amount is set to grow to $142 billion (R1.9 trillion), or 8.6% of GDP, by 2020. The mobile ecosystem also supported approximately 3.5 million jobs in Sub-Saharan Africa in 2016.

Sub-Saharan Africa has around 420 million unique mobile subscribers but that is still only a penetration rate of 43%. GSMA expects mobile users to grow to over half a billion by 2020, which will be closer to a 50% penetration rate in a region that is growing at a rate of 50% higher than the global average.

Rabana said when mobile technology and mobile phones first came out, there was a lot of excitement that they would have social and economic benefits, but Africa's challenge now lies in how to increase economic participation for Africa using mobile technologies ? especially for small and medium enterprises (SMEs).

"We say there are a billion people on the continent but where do you find them and how do you communicate to them? How do you tell them about your services? How do you collect money from them?

"Until we solve those problems, we can't actually increase the economic participation and growth potential of SMEs. We really need to question ourselves more about the bigger role that mobile can play, along with other offline services that use mobile as a connector or as a platform," Rabana said.

This as mobile broadband network coverage and penetration rates continue to vary significantly across the region. GSMA says in SA, 3G is almost universal and 4G networks now reach three-quarters of the population. Consequently, SA has a mobile broadband penetration rate of more than 70%. However, in comparison, penetration rates are less than 5% in Burundi, the Central African Republic, Niger and South Sudan, where the majority of the population are still underserved.

Overall, GSMA says the number of mobile broadband connections will reach half a billion by 2020, more than double the number at the end of 2016, and will account for nearly two-thirds of total connections in the region.

A question of access

Elizabeth Migwalla, senior director of government affairs for Africa at Qualcomm, was also on the panel and highlighted that Africa's fixed broadband penetration still remains extremely low. Migwalla said a majority of Africans remain off the grid and are not participating in the digital transformation of the continent.

"The great equaliser is the Internet, so if only 2% or 3% of the African population is on the Internet, will we transform?" she asked.

Google SA country director Luke Mckend had a more positive view, highlighting the fast pace of Internet access growth in Africa.

"If I take YouTube usage, for example, as a proxy for how fast it is growing, you are talking about 100% year-on-year growth in most of our countries across Africa, which is pretty fast but of course we would like it to be faster. Mobile queries as a proxy for the use of the mobile Internet are growing at between 70% and 120% depending on the country you are in. So I think it is important to recognise there is also an enormous amount of growth and it's not just a story of no access [in Africa].

"There are solutions that are currently being created, that are being trialled in a variety of different places and I'm pretty optimistic there are things I can't currently imagine that will resolve some of the connectivity problems we are experiencing," Mckend said.

He gave the example of Google's Project Loon, which aims to bring Internet connectivity to people in rural and remote areas worldwide using a network of modified weather balloons travelling on the edge of space.

"So are there technologies like [Project Loon] that might bring us different solutions or answer these problems in different ways? I'm pretty confident they will, because it's become almost a human imperative for there to be universal connectivity. I just don't think it's going to happen tomorrow, but in 10 years' time I'm pretty confident we are going to be having a very different conversation about connectivity in Africa," Mckend added.

AfricaCom 2017 will take place from 7 to 9 November in Cape Town - marking the 20th anniversary of the event.

Share