Sub-Saharan Africa, the fastest growing market in the world
More than positive are the estimations of analysts for the upcoming years regarding Sub-Saharan Africa’s mobile markets. According to the new report from GSMA, “The Mobile Economy – Sub-Saharan Africa 2017”, this region will be the fastest growing market in the world until 2020. The CAGR of 6.1% over the upcoming years is around 50%, higher than the global average. For the time being (end of 2016), in Sub-Saharan Africa there were 420 million unique mobile users, equivalent to a penetration rate of 43%. If the estimations prove right, penetration by 2020 will surpass 50% of the population.
Even more optimistic is the forecast that growth will mainly come from underserved groups, especially young people under 16 years old. This will create a new breed of mobile subscribers, a more dynamic one, in an age segment that accounts for more than 40% of the population in most countries in the region.
In terms of geography, four countries, DRC, Ethiopia, Nigeria and Tanzania, with a total population of more than 400 million people, will be the steam engine of growth, accounting for nearly half the new 115 million new subscribers expected by 2020.
GSMA also expects rapid growth of mobile broadband in the region. The number of mobile broadband connections will reach half a billion by 2020, more than double the number at the end of 2016, and will account for nearly two thirds of total connections in the region. This new massive wave of mobile broadband subscribers is being supported by increasing adoption of smartphones. In the future, smartphone growth will in large part be driven by younger, more tech-savvy users, who will account for the majority of new mobile subscribers. Smartphone connections will rise to more than 500 million by 2020, with around 300 million new smartphones added over the next three years.
Sub-Saharan Africa is expected to close the gap in smartphone adoption with the rest of the world.
In terms of technology, 3G will remain the dominant mobile broadband technology for the foreseeable future, but 4G adoption is rising rapidly as a result of increasing network rollout. On the other hand, due to variables of the region, gap between Sub-Saharan Africa and global average in 4G networks coverage will remain strong: 35% vs 78%, more than “double score”.
Basically, this is the result of significant variations of mobile broadband network coverage and penetration rates across the region. In South Africa, for example, penetration of 3G is almost universal while of 4G is 75%. On the other hand, mobile broadband penetration rate in countries such as Burundi, Niger or South Sudan (some of the poorest countries of the area) is less than 5%. It’s clear that country’s wealth or political stability have a huge impact at the investments on network rollouts and how to address such significant macroeconomic factors remains a major challenge of the region.
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