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Young ‘digital natives’ drive mobile subscriber growth

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More than 160 million new unique mobile subscribers will be added across Sub-Saharan Africa by 2025, driven primarily by the youth population.

This number is expected to bring the total subscriber number to 623 million, representing around half of the region’s population, up from 456 million in 2018.

This is according to a new report titled: The Mobile Economy, Sub-Saharan Africa 2019 conducted by GSMA Intelligence, the research arm of the GSMA.

According to the report,Sub-Saharan Africa will remain the world’s fastest-growing mobile region over the coming years, as millions of young African consumers become mobile users for the first time.

Mobile subscriber additions will see a 44% increase by 2025, driven by high-growth markets such as Nigeria, Ethiopia, the Democratic Republic of the Congo, Kenya and Tanzania.

“A new generation of youthful ‘digital natives’ across Sub-Saharan Africa are set to fuel customer growth and drive adoption of new mobile services that are empowering lives and transforming businesses,” says Akinwale Goodluck, head of Sub-Saharan Africa at GSMA.

“With mobile technology at the heart of Sub-Saharan Africa’s digital journey, it is essential for policymakers in the region to implement policies and best practices that ensure sustainable growth in the mobile industry, and enable the transition to next-generation mobile networks.”

GSMA notes Nigeria and Ethiopia will record the fastest growth rates between now and 2025, at 19% and 11% respectively.

Across the region, the demographic bulge will result in large numbers of young consumers becoming adults and owning a mobile phone for the first time. This segment of the population will account for the majority of new mobile subscribers and, as ‘digital natives’, they will significantly influence mobile usage patterns in the future.

Mobile contribution to economic growth

The report calculates the mobile ecosystem across Sub-Saharan Africa generated almost $150 billion in economic value last year – equivalent to 8.6% of the region’s GDP.

Mobile technologies and services also supported almost 3.5 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector in 2018, with almost $15.6 billion raised through taxation.

“By 2023, mobile’s contribution will reach almost $185 billion (9.1% of GDP), as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services,” reveals GMSA.

“The informal economy accounts for a large part of the mobile ecosystem in Sub-Saharan Africa. Almost 1.2 million of the 1.7 million who are directly employed by the mobile ecosystem are informally employed in the distribution and retail of mobile services.”

Over 800 million remain offline

At the end of 2018, 239 million people across Sub-Saharan Africa were connected to the mobile Internet, an increase of 35 million from the previous year. However, almost three-quarters of the population remains offline, according to the report.

The evolution of mobile Internet adoption in the region is based on four primary enablers of digital inclusion: infrastructure, affordability, consumer readiness and availability of content/services.

“The infrastructure and availability of content/services enablers recorded the highest rise, as a result of significant investments in 3G and 4G network expansions and the increasing availability of locally relevant online content. Mobile broadband (3G and above) networks now cover more than 70% of the population, while the past year has seen mobile operators and tech start-ups roll out a number of digital services across a wide range of sectors, including entertainment, commerce and financial services.”

Mary Meeker’s 2019 Internet Trends report shares this sentiment, revealing global Internet users are on a slow growth phase, increasing to only 3.8 billion people in 2018, up from 3.6 billion in 2017.

“Internet user growth was at 6% in 2018 versus 7% the previous year; new Internet users are hard to find,” she explained during her presentation at the Vox/Recode's Code Conference in Scottsdale, US, last month.

Growth slowed globally in 2018 because a large number of Internet users had come online in the past few years, and new users are harder to come by, she explained.

The GMSA report notes while there is a modest improvement in the Sub-Saharan Africa aggregate score in the Mobile Connectivity Index, this is still some way off the global average across all four enablers.

Addressing social challenges

The use of mobile networks generates huge amounts of data about people’s geographic location, phone call information and messaging behaviour.

This mobile ‘big data’, when aggregated, anonymised and analysed, can provide valuable and actionable insights across a wide variety of use cases, it notes.

While the majority of mobile big data implementations are commercial use cases and research, pilot projects have demonstrated that qualities of mobile big data, such as frequency and high penetration rate, can also add value when addressing environmental, social and governance challenges, from tackling environmental issues and tracking disease outbreaks to improving urban planning and responding to disasters.

“The application of mobile big data for social good use cases is still at a nascent stage in Sub-Saharan Africa. However, the potential impact is significant given the rapid adoption of mobile technologies and the lack of sufficient relevant data to support efficient solutions and actionable insights,” asserts the report.

Report highlights

  • Around 239 million people, equivalent to 23% of the region’s population, use the mobile Internet on a regular basis.
  • Smartphones accounted for 39% of mobile connectionsin Sub-Saharan Africa in 2018, forecast to increase to two-thirds of connections by 2025.
  • 3G will overtake 2G to become the leading mobile technology in Sub-Saharan Africa this year.
  • 4G will account for almost one in four connections by 2025. However, 4G uptake is being dampened in some markets by the high cost of 4G devices and delays in assigning 4G spectrum.
  • The region’s mobile operators are increasing investment in their networks and are expected to spend $60 billion (capex) on network infrastructure and services between 2018 and 2025 – almost a fifth of this total being invested in new 5G networks.
  • Across the wider Sub-Saharan Africa region, mobile data usage will grow four-fold by 2024.
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