VIRTUAL PRESS OFFICESTM   (011) 807 3294   itnews@itweb.co.za | Advertise on ITWeb   Mon, 22 Dec, 14:53:09 PM
You are here Home Networking

Spectrum fears loom large

Sub-Saharan Africa leads the world in mobile growth, mobile Internet and mobile money transfer.

Sub-Saharan Africa leads the world in mobile growth, mobile Internet and mobile money transfer.

Sub-Saharan Africa is the fastest growing mobile market in the world, with an average annual growth of 44% since 2001. However, a considerable increase in network congestion can be expected unless governments across the region take urgent steps to release new spectrum.

This is according to the latest GSMA report, based on research from Deloitte. The GSMA sub-Saharan Africa Mobile Observatory 2 provides an evaluation of the region’s mobile industry and its socio-economic impact.

Mobile connections in the Southern Africa region have leapt to 475 million, compared to just 12.3 million fixed-line connections. This represents the highest proportion of mobile versus fixed-line connections in the world. The GSMA says, with necessary spectrum allocations and transparent regulation, the mobile industry could fuel the growth of 14.9 million new jobs in sub-Saharan Africa between 2015 and 2020.

Tom Phillips, chief government and regulatory affairs officer at GSMA, says it is crucial that government works together with mobile operators to support the industry.

“Mobile has revolutionised African society, and yet demand still continues to grow by almost 50% per year. To create an environment that supports and encourages this immense growth, it is imperative that governments work in partnership with mobile operators to enable the industry to thrive throughout the region, ultimately providing affordable options to connect its citizens.”

According to the GSMA, sub-Saharan Africa has some of the highest levels of mobile Internet usage globally. In Zimbabwe and Nigeria, mobile accounts for over half of all Web traffic at 58.1% and 57.9%, respectively – over five times that of the global average (10%). 3G penetration levels are forecast to grow by 46% through 2016 as the use of mobile-specific services develops.

Economic impact

The GSMA says the rapid pace of mobile adoption has delivered huge economic benefits for the region, directly contributing $32 billion (about R260 billion) to the sub-Saharan African economy – 4.4% of GDP.

“Approximately 3.5 million full-time jobs are attributed to the mobile industry, which has also spurred a wave of technology and content innovation. More than 50 ‘innovation hubs’, which develop local skills and content in the field of ICT services, have been created, including the Hive Colab, in Uganda; the iHub, in Kenya; and Limbe Labs, in Cameroon.

“Safaricom’s M-PESA mobile money transfer service in Kenya has achieved greater scale than any other service in the world. Today, there are more than 80 mobile money operations for the unbanked across Africa, compared to 36 in Asia, the second most popular region for these services.”

Spectrum crunch

The GSMA says, despite investments of $16.5 billion over the past five years ($2.8 billion in 2011 alone) across the five key markets in the region, mainly directed towards the expansion of network capacity, sub-Saharan Africa faces a looming “capacity and coverage crunch” in terms of available mobile spectrum.

“The current amount of spectrum allocated to mobile services in sub-Saharan Africa is among the lowest worldwide. Some countries apportion as little as 80MHz, compared to developed markets where allocation for mobile exceeds 500MHz.”

With mobile Internet traffic forecast to grow 25-fold over the next four years, the GSMA says there will be a considerable increase in network congestion unless governments across the region take urgent steps to release new spectrum in line with the recommendations of the International Telecommunication Union’s World Radiocommunication Conference. “This includes capacity in the digital dividend (700-800MHz) band and the 2.6GHz band, and also liberalising existing licence agreements to allow the deployment of high-speed Universal Mobile Telecommunications System and long-term evolution networks in the 900MHz and 1 800MHz bands.”

The GSMA says the combined aggregated effect of the spectrum release of the digital dividend, 2.6GHz and the re-farming of 1 800MHz, would have a positive impact on job creation.

“An additional 14.9 million jobs could be created between 2015 and 2020 in the key six markets in the region. Mobile industry growth could also generate a GDP increase of $40 billion, representing 0.54% of total GDP, in the region by 2016.”

Chris Williams, Deloitte telecommunications partner, says in many sub-Saharan African countries, mobile broadband is the only possible route to deliver the Internet to consumers. “However, to maximise the potential gains, governments need to continue to support the development of mobile broadband, notably through the provision of appropriate spectrum.

“The current spectrum allocations across the region lag behind those of developed countries and, unless increased, seem likely to raise costs of provision, challenge investment decisions and increase network congestion.”

Tax and regulation stifle

The GSMA says high levels of government taxation and new regulation also threaten to limit the growth of mobile services across the region.

“Africa has the highest taxation, as a proportion of the cost of mobile ownership, among any developing regions worldwide, with taxes on handset and mobile devices much higher than elsewhere. There is also a worrying trend of new taxes being introduced on essential mobile services; for instance, the Kenyan government recently announced a new 10% tax on money transfer services, threatening the economic viability of the service in the future.”

Meanwhile, approvals for tower and fibre deployment have been identified as the single biggest obstacle to investment by the mobile community in sub-Saharan Africa. As capacity increases and such deployments are urgently required to cope with substantial traffic growth, complex and uncoordinated national and local regulations and approval processes, especially with regards to rights of way, could be simplified to aid this process.

“Tackling stifling regulation, addressing high taxation and implementing a harmonised approach to future spectrum allocation will further boost the success story of mobile across the continent,” says Phillips.

“There is not only the potential to lift millions out of poverty, but also the opportunity to ensure that Africa benefits from global economies of scale in terms of both network technology and mobile devices.”

Enjoyed this story? Subscribe to ITWeb's Networking newsletter.

Our comments policy does not allow anonymous postings. Read the policy here



 

 

 

Sponsors Message