Africa’s Booming Mobile Phone Market

Mobile phone service is gaining by leaps and bounds in Africa. So many Africans have subscribed to wireless service that the continent is now the second-largest market in the world – behind only Asia, the top market. According to a report by Groupe Speciale Mobile Association, Africa is the world’s fastest growing mobile phone market and is poised to have 735 million people using their phones for everything from transferring money to tracking animals for wildlife studies. The number of subscribers on the continent has grown almost 20% each year for the past five years, reaching 649 million subscribers in the fourth quarter of 2011. Analysts say bad and expensive landline connections in Africa are responsible for the high mobile phone usage. In a report, GSMA says that 96% of subscriptions are pre-paid with voice services currently dominating, although uptake of data services is increasing steadily. The expansion of mobile phones is likely to revolutionize Africa, a land plagued by poverty, disease, wars and political corruption. In the report, GSMA calls on governments to allocate more mobile broadband spectrum, and to cut taxes on operators to further spur expansion.

Africa’s natural resources, growing stability and increasing middle class present a significant opportunity for both commercial and societal advancements. The key area of development is indeed commerce and finding sustainable ways for communities to interact and transact with each other in efficient, trusted ways. Africa’s mobile operators and banks have been quick to realize that while 60 per cent of Africa’s population has no access to banking facilities, over 50 per cent of the adult population in Africa has access to a mobile phone, which makes the move to mobile-banking a natural transition. Broad-based accessibility and availability of banking services at a reasonable cost could have a liberating impact on the majority of the African population, including those sections that do not have access to traditional banking channels. One of the key features driving the growth in mobiles in Africa is the inherent mobility suited to remote areas with poor infrastructure. In addition, the pre-paid system of low-denomination scratch cards is perfectly matched to the economic situation of many Africans, and it is recognized that mobiles offer potentially cheap means of communicating, especially through the use of SMS.

Kenya is at the forefront of mobile money transfers, with 8.5 million users. The Kenyan government’s abolition of the 16% general sales tax on mobile handsets in 2009 has resulted in handset purchases increasing by more than 200%. Nigeria has the highest number of mobile phone subscriptions in Africa with more than 93 million, representing 16% of the continent’s total mobile subscriptions. South Africa, with its more developed infrastructure, has the highest broadband penetration of 6%, followed by Morocco’s 2.8%. The report also found that 36% of people in the 25 largest African mobile markets still have no access to mobile services indicating the massive growth potential of the industry.

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