Global telecoms organisation GSMA says the mobile industry will contribute US$142 billion or 8,6% of Sub-Saharan Africa’s (SSA) gross domestic product (GDP) by 2020.
Financial Matters with Tinashe Kaduwo
According to the GSMA’s new report titled The Mobile Economy: Sub-Saharan Africa 2017 published this week at the GSMA Mobile 360 Africa event in Dar es Salaam, Tanzania, huge growth is forecast for the mobile industry.
The report cements the sentiments shared last week in this column on opportunities for mobile services. According to the GSMA report, over half a billion people across SSA will be subscribed to a mobile service by 2020, showing huge potential for mobile.
The mobile industry has taken over from banking, introducing vital tools in delivering digital and financial inclusion in SSA. Around 270 million people in the region now access the internet through mobile devices, while the number of registered mobile money accounts has reached 280 million, according to the GSMA report.
Mobile operators and others are also leveraging the ubiquity of mobile networks across the region to deliver services that are working towards achieving the UN Sustainable Development Goals (SDGs) in areas such as energy, water and sanitation, healthcare and education.
As noted by the GSMA, more people across SSA are consuming digital content, particularly online video, via mobile devices. The growing demand for digital content in the region is expected to increase mobile data traffic significantly in the coming years. The latest Ericsson Mobility report forecasts a twelve-fold rise in the amount of mobile data used in Africa over the next five years. Already in some SSA countries, a number of home-grown platforms have been developed, notably IROKOtv, Buni TV and Bozza to challenge the dominance of popular global platforms such as YouTube and Facebook. Many of these local platforms are collaborating with mobile operators to grow their audience and enable technical features that improve affordability.
In Zimbabwe, which has an estimated unique subscriber base of 9,4 million representing a 58% penetration rate, growth will be driven by data and mobile money services. Although aggregate mobile operators’ revenues came off by 9,7% to US$179,8 million in the first quarter of the year compared to the previous quarter there is huge potential in the sector. The decline on a quarterly basis was a result of a fall in voice traffic which enjoys a huge share in revenue contribution. Mobile voice traffic eased by 8,9% to 833,6 million minutes when compared to last quarter and eased 5% when compared to same period last year.
Substitute disruptive products such as over-the-top (OTT) together with depressed demand as a result of weak economic activity contributed to the fall in revenues. Voice revenue accounts for 59% of total mobile revenue, data for 21.5% while mobile money and SMS account for 10,2% and 6,8% respectively. However, data and mobile money are expected to rise given anticipated growth in subscriber base and increased mobile transaction volumes as a result of the cash-lite environment. According to the Postal and Telecommuications Regulatory Authority (Potraz), internet access providers generated a total of US$45,6 million in revenues, a growth of 11,4% quarter-on-quarter highlighting the potential in that segment. The uptake of fibre is also projected to increase driven by the improved affordability arising out of increased competition. Potraz projects internet and data services driving industry growth in terms of usage volumes while projecting a decline in voice and SMS traffic. New innovations and wider opportunities surrounding mobile money will bring in more avenues for growth.
However, what might limit growth in Zimbabwe which may make the country take an opposite path when compared to the region as projected by GSMA over the outlook period is slowing investment by mobile operators. Investments by mobile operators declined by 85,4% on a quarterly basis. Capital commitments have generally been deferred due to international payments gridlocks and cashflow challenges, which are common challenges in the economy.
Kaduwo is an economist at Equity Axis. — email@example.comfirstname.lastname@example.org