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    Home » Duncan McLeod » Risks to Africa’s mobile boom

    Risks to Africa’s mobile boom

    By Duncan McLeod8 June 2014
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    Duncan-McLeod-180-profileIn the mid-1990s, there were fewer telephone connections in the whole of sub-Saharan Africa than there were in Manhattan. What a difference two decades has made: by the end of this year, there will be more than 635m active telephone subscriptions on the sub-continent. That number is twice the population of the entire US.

    The impact on the continent of the boom in mobile telecommunications has been vast. The Kenyan and Tanzanian economies, for example, now literally run on top mobile devices, thanks to M-Pesa. Across the region, hundreds of millions of Africans are connecting to the Internet for the first time using their phones, many of them on smartphones whose prices have plummeted to below US$100 (and which continue falling).

    Swedish telecoms equipment maker Ericsson, in its latest Mobility Report, predicts that by 2019, the number of mobile subscriptions in sub-Saharan Africa will have risen to 930m. More significantly, smartphones — powered by broadband networks — are expected to displace so-called “feature” phones in the coming years.

    According to Ericsson, the number of 2G, non-broadband devices in use in the region will peak at just over 500m this year. They will then begin declining at an accelerating rate as 3G devices come to dominate the market (4G will take longer to gain traction because of higher device prices and spectrum scarcity). By the end of the decade, broadband-ready phones will have largely replaced older 2G devices, the report predicts. There will be about 600m 3G subscriptions across the region by then.

    At the end of 2019, 65% of sub-Saharan Africans will be covered by a 3G network, up from 20% now, while 4G networks will reach 40% of the population, up from just 5% now. 2G coverage will also continue to expand, reaching 80% by 2019, from 65% now. Between 2013 and 2019, data traffic traversing mobile operators’ networks will jump 20-fold, against 10-fold for the world as a whole.

    The significance of this boom in mobile broadband is difficult to overstate. According to the report, mobile broadband is already the primary way that many sub-Saharan consumers access the Internet.

    “About 70% of mobile users in the countries researched in the region browse the Web on their devices in comparison to 6% who use desktop computers.”

    By the end of this decade, a majority of African consumers will carry a device — many of these will have a large-screen display, ideal for online use – that can access the Internet at decent speeds. This will transform industries. New businesses — in media, financial services and elsewhere — will emerge to cater for the hundreds of millions of Africans looking for access to new services.

    According to the Ericsson report, the rise in sophistication of social networking platforms — international providers such as Facebook and WhatsApp and home-grown solutions like Mxit — has played a big role in the growth of mobile data traffic. As in other parts of the world, future growth will be propelled higher by video.

    But there’s a bottleneck looming. Most African governments — South Africa’s included — have been too slow to license new radio frequency spectrum to allow for operators to cater for exploding demand. Unless this changes soon, the data growth express train could be derailed.

    Too many countries, including South Africa, are running far behind with their digital television projects, while others, like Kenya, have made a hash of their roll-outs. This means it will be years still until many countries in the region have allocated the “digital dividend” — the prime broadband spectrum now occupied by analogue TV broadcasters. While developed markets power ahead with licensing this spectrum, African policy makers and regulators (there are exceptions) are handicapping the continent by not getting a move on with digital migration. This means “added traffic congestion, delays in network roll-out, higher service costs and overall compromised quality of service”, according to the Ericsson report.

    It would be a real pity if the mobile broadband boom — which will change Africa in far more profound ways than it has the developed world — is choked off just as it is getting going.

    • McLeod is editor of TechCentral. Find him on Twitter
    • This column was first published in the Sunday Times


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