GSMA's Latest Report Indicates That Afrika's Mobile Ecosystem Is Starting To Mature After A Period Of Rapid Takeoff

The GSMA Mobile Economy - Africa report has some interesting stats on the state of the mobile landscape. There are some emerging markets where mobile use is starting to take off, and others playing catchup, but on the whole the mobile ecosystem is starting to mature after a period of rapid takeoff.

The growth in mobile broadband and smartphone usage, coupled with new business models to stimulate data usage from mobile operators have greatly increased the use of mobile internet, especially among low income users thus increasing data traffic overall.

Kenya leads in mobile penetration, with 88.1% of the population having access to mobile services. Tanzania is at 69%, behind Senegal (73%), higher than in Mozambique (33%) and Malawi (25%). The Sub-Saharan Africa average is at 53%, lower than other developing regions, such as South Asia and East Asia with 69 and 80 subscriptions per 100 people respectively. However, the rapid growth in Sub-Saharan Africa suggests that the region may soon catch up.

Kenya's telco sector was also the most profitable among the eleven countries, raking in US$56 million in revenues in the second quarter of 2016. Safaricom accounted for 90 percent of this revenue, followed by Airtel and Orange Kenya.

Over the same period, Ugandan telcos earned US$23 million, and Rwanda's US$4 million.

Safaricom earned more than operators in Malawi, Rwanda and Somalia combined. Safaricom alone earned more revenue than Tanzania's seven Telco operators, who received about US$40 million between April and June 2016.

Despite Kenya's high incomes, its subscriber numbers (26.1 million) were low compared to Ethiopia which has 32.9 million subscribers. Tanzania has 25.3 million subscribers while Uganda has 15.8 million.

Curiously, the stats show that Zambia has the highest rate of smartphone adoption on the continent, followed by Tanzania, Mozambique and South Sudan.

The country presents an interesting look at how the transition towards mobile broadband has been driven by the growing adoption of supporting technologies.

Being a landlocked country, Zambia needed to set up overland connections through neighbouring Namibia and through Malawi to Mozambique to international submarine fibre optic cables in 2011. After the main operator Zamtel connected to the WACS and Sat-3 cables, there were significant retail price reductions for broadband services, and domestic fibre adoption took off.

After the national fibre network was rolled out, the cost of mobile data through 3G and commercial LTE, dropped, dramatically increasing the number of mobile broadband subscribers in the country through cheaper smartphones. As a result, internet penetration in Zambia grow from 1.3 million in 2010, a rate of 10% to 3.1 million, or about 19% of the population in 2016.

Kenya's 74.2% internet penetration rate places the country at par with Russia and ahead of high and middle class countries such as Italy (62%), Portugal (68%), Greece (63%), Turkey (60%), China (5%) and Poland (68%).

Of all the markets surveyed, South Sudan has the lowest penetration at 20%, one of the lowest in Africa. The lack of investment in infrastructure and recent conflicts have hampered investment in the country’s mobile market, which remains virtually untapped.

The internet and broadband market will kick off once the country gains access to international fibre optic cables, and a national backbone network is put in place. Infrastructure solutions such as Facebook's OpenCellular could find applications here in order to reach the 80% of the population that live outside of the main urban centres. With a negligible rate of bank account ownership, there is also potential for mobile payment and banking solutions to dominate the country’s financial services sector as well.

For an example on how conflict resolution can boost the adoption of new technologies, South Sudan can look to Mozambique, which continues to enjoy economic growth following the resolution of the country’s long civil war, which ended in 1992. Mobile penetration is at 62%, well above the regional average, and new operators are entering the market, with Vietnam's VietTel joining Vodafone Mozambique and the state-owned operator mCEL. The market is growing, with indicators showing that there is considerable room for further growth in coming years.

One thing to consider when looking at these stats is that quite a number of Africans often own more than one mobile handset. The reason for owning multiple phones rather than simply multiple SIM cards is because users tend to pick and choose services as they see fit. One operator could have good call rates, but poor data connectivity, and another could have favourable mobile money rates, meaning that they enjoy the best that all these providers have to offer.