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AfricaMoney | August 21, 2017

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Fastest telecom growth in Africa; rural Africa the next frontier?

Fastest telecom growth in Africa; rural Africa the next frontier?

Deloitte’s report shows that many urban markets in Africa have begun to mature, leaving the rural areas as the next frontier. (Image:PHYS)

Mobile subscriber growth in Africa remains the fastest across the world, positively impacting telecom markets as well as African economies at large, according to a report by global consulting major, Deloitte.

Deloitte’s report also shows that many urban markets in Africa have begun to mature, leaving the rural areas as the next frontier.

Improved economic conditions have enabled Africa to experience the fastest telecom growth worldwide in the last five years, which have changed the fundamental aspects of social and business life in the continent, states the report titled “The future of Telecoms in Africa: The BluePrint for the Brave”.

Over the last decade, African mobile telecom has witnessed massive growth. During the period from 2006 to 2008, subscriptions reached 42% whereas subscriptions between 2009 and 2011 are estimated at 21%.

Mobile services being a core life enabler to all user segments, favorable macroeconomic factors flowing to higher consumption, licensing opportunities and improved regulatory environment are the factors that have contributed to this massive growth.

Sub-Saharan Africa saw its 2011 mobile revenues hit $35 billion, representing a contribution of approximately 3% to the GDP, thus creating a positive impact in the African continent.

According to the recent Deloitte report, partnered by GSMA, a 10% increase in mobile penetration in developing economies will lead to an increase in productivity by 4.2%.

“Mobile subscriber growth is maturing and could well saturate in the medium term in some markets if rural coverage does not increase,” the report outlines.

Mobile subscription penetration has reached an average of 72% across Africa by the third quarter of 2012, but varies vastly on a country-wise basis.

Multi-SIM ownership is well-known and actual penetration of individuals could be closer to 40% to 50% in some countries, thus resulting in more opportunity for additional growth. The report illustrates this point through a case in Nigeria where mobile penetration is above 60% but human penetration just above 26% with multi-SIM ownership at a whopping 2.4 per user.

The report concludes that the level of subscribers will increase if call prices are reduced and overall cost of ownership of handsets to gain access to lower income segments.

Secondly, in rural areas there should be better network coverage and operating models adapted to serving such remote connectivity needs.

And finally, mobile data connectivity must be set up because this has already proved very successful in a number of countries.

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