By the end of 2016 Africa will have 1 billion mobile subscriptions

By paul Adepoju

Africa is expected to cross 1 billion mobile subscriptions in the fourth quarter of 2016, reaching 1.02 billion by year-end, according to leading global data, market research, and advisory firm Ovum. Ovum also forecasts that the total number of mobile subscriptions on the continent will rise to 1.33 billion at the end of 2021.

Growth in new mobile subscriptions is slowing. The average rate of mobile penetration in Africa was 79% at the end of June. And mobile voice revenue on the continent is set to decline over the five years to 2021.

Data connections, as well as data and digital service revenue, will drive the next phase of growth in Africa’s telecoms market. The take-up of mobile broadband will rise strongly, as operators continue to roll out 3G and 4G LTE networks and as smartphones become increasingly affordable.

There will be 1 billion mobile broadband connections in Africa in 2021, including 157.4 million 4G LTE connections (see graphic). Additionally, the number of smartphone connections on the continent will reach 929.9 million at the end of 2021. And non-SMS mobile data revenue in Africa will rise from US$6.40 billion in 2015 to US$27.56 billion in 2021, a compound annual growth rate of 27.6%.

The number of fixed broadband connections in Africa is also expected to increase significantly over the coming years, albeit from a very low base. It will rise from 13.78 million at the end of 2016 to 19.97 million at the end of 2021. The number of fiber and fixed LTE connections will increase sharply over the next five years, but DSL will remain the dominant fixed broadband technology on the continent, accounting for 70.7% of African fixed broadband connections in 2021.

Despite the progress being made in connecting Africa, the continent ranks second lowest among world regions in its broadband development, according to Ovum’s Broadband Development Index (BDI), which measures countries and world regions based on their adoption of high-speed broadband. Africa had a BDI score of 232 out of 1,000 at the end of 2015, with Central and Southern Asia being the only region to record a lower score. Mauritius is the highest ranked African country in the BDI, with a score of 279 out of 1,000 at the end of 2015. The next highest ranked African countries are South Africa, Tunisia, Algeria, and Namibia.

Matthew Reed, practice leader, Middle East and Africa, at Ovum, said: “As Africa nears the landmark of 1 billion mobile subscriptions, it is clear that the next phase of growth will be in broadband connections and in revenue from data access as well as from new ‘digital services’ such as digital media and mobile financial services. However, Africa remains less advanced than most other world regions in its broadband development, and there is both an opportunity and a need to further improve connectivity on the continent, and to take advantage of the benefits that connectivity can bring.”