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GSMA the Mobile Economy Sub-Saharan Africa 2020 The Mobile Economy Sub-Saharan Africa 2020 Copyright © 2020 GSM Association The GSMA represents the interests of mobile operators GSMA Intelligence is the definitive source of global mobile worldwide, uniting more than 750 operators with almost operator data, analysis and forecasts, and publisher of 400 companies in the broader mobile ecosystem, including authoritative industry reports and research. Our data handset and device makers, software companies, equipment covers every operator group, network and MVNO in every providers and internet companies, as well as organisations country worldwide – from Afghanistan to Zimbabwe. It is in adjacent industry sectors. The GSMA also produces the the most accurate and complete set of industry metrics industry-leading MWC events held annually in Barcelona, available, comprising tens of millions of individual data Los Angeles and Shanghai, as well as the Mobile 360 Series points, updated daily. GSMA Intelligence is relied on by of regional conferences. leading operators, vendors, regulators, financial institutions and third-party industry players, to support strategic For more information, please visit the GSMA corporate decision-making and long-term investment planning. The website at www.gsma.com data is used as an industry reference point and is frequently cited by the media and by the industry itself. Our team Follow the GSMA on Twitter: @GSMA of analysts and experts produce regular thought-leading research reports across a range of industry topics. www.gsmaintelligence.com [email protected] Contents Executive summary 2 1 The mobile market in numbers 10 1.1 A new decade of growth begins for mobile in Sub-Saharan Africa 11 1.2 5G debuts in Sub-Saharan Africa 13 1.3 Evolution of the digital consumer 14 1.4 Revenue outlook remains strong, despite short-term Covid-19 impact 17 2 Key trends shaping the digital landscape 19 2.1 5G 20 2.2 Telco of the future: digital payments 21 2.3 IoT 23 2.4 Digital identity 25 3 Mobile contributing to economic growth 26 and social progress 3.1 Mobile contribution to economic growth 27 3.2 Mobile enhancing digital inclusion 30 3.3 The mobile industry’s response to Covid-19 32 3.4 Driving social impact through mobile: spotlight on PAYG utility solutions 34 4 Policy actions for digital and fiscal 37 resilience 4.1 Forward-looking spectrum management 38 4.2 Strengthening digital infrastructure 41 The Mobile Economy Sub-Saharan Africa 2020 Executive Summary Covid-19 casts a spotlight on digital connectivity The Covid-19 pandemic has had a profound The mobile industry in Sub-Saharan Africa impact on the digital landscape in has largely risen to the challenge of keeping Sub-Saharan Africa and around the world. individuals and businesses connected during The social distancing measures put in place the pandemic, despite changes in data to curb the spread of the pandemic have consumption patterns. However, with nearly brought to light the value of connectivity for 800 million people in the region still not social and economic wellbeing. The pandemic connected to the mobile internet, it has never has highlighted the importance of a robust been more urgent to close the digital divide. and inclusive digital economy, underpinned by universal access to fast, reliable internet and a range of digital services for individuals and businesses. 2 Executive Summary The Mobile Economy Sub-Saharan Africa 2020 Nearly half a billion people subscribe to mobile services in Sub-Saharan Africa At the end of 2019, 477 million people in Smartphone adoption continues to rise Sub-Saharan Africa subscribed to mobile rapidly in the region, reaching 50% of total services, accounting for 45% of the connections in 2020, as cheaper devices population. The mobile market in the region have become available. Smartphone will reach several important milestones financing models are gaining traction, over the next five years: half a billion demonstrated by the recent partnership mobile subscribers in 2021, 1 billion mobile between Safaricom and Google, allowing connections in 2024, and 50% subscriber low-income consumers to pay for 4G devices penetration by 2025. These achievements in daily instalments. Over the next five years, will be underpinned by operators’ continued the number of smartphone connections in investment in network infrastructure. Despite Sub-Saharan Africa will almost double to the economic uncertainty brought about by reach 678 million by the end of 2025 – an the Covid-19 crisis, operators in the region adoption rate of 65%. will invest $52 billion in infrastructure rollouts between 2019 and 2025. The 5G era has begun in Sub-Saharan Africa Vodacom and MTN launched the first major 5G trials have been conducted elsewhere 5G networks in Sub-Saharan Africa in 2020, in Sub-Saharan Africa, including in Gabon, offering 5G mobile and fixed wireless access Kenya, Nigeria and Uganda. However, mass (FWA) services in several locations across adoption of mobile 5G is not imminent in the South Africa. This came sooner than expected region. With significant unused 4G capacity after the South African government assigned and 4G adoption still relatively low, the focus temporary spectrum in the 3.5 GHz range in the near term for operators and other in the wake of the Covid-19 pandemic. The stakeholders is to increase 4G uptake. This immediate opportunity for 5G in South Africa, will involve strategies to make 4G devices as well as the rest of the region, is to use more affordable and the provision of relevant FWA to bridge the gap in fixed broadband digital content to drive demand for enhanced connectivity for homes and businesses. connectivity services. By 2025, there will be just under 30 million mobile 5G connections in Sub-Saharan Africa, equivalent to almost 3% of total mobile connections. 3 Executive Summary The Mobile Economy Sub-Saharan Africa 2020 Mobile industry driving social impact and contributing to economic growth Beyond connectivity, the mobile industry has Mobile technologies and services generated engaged with businesses and governments 9% of GDP in Sub-Saharan Africa in 2019 – a on initiatives to alleviate the impact of the contribution that amounted to more than Covid-19 pandemic on citizens. From mobile $155 billion of economic value added. The money transaction-fee waivers and discounts mobile ecosystem also supported almost on data tariffs for educational and health 3.8 million jobs (directly and indirectly) sites, to cash and equipment donations, and made a substantial contribution to the mobile operators and other industry players funding of the public sector, with $17 billion have supported the most vulnerable in society raised through taxation. By 2024, mobile’s during the pandemic while also contributing contribution will reach around $184 billion to economic recovery efforts. as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services. 4 Executive Summary The Mobile Economy Sub-Saharan Africa 2020 Policy actions for digital and fiscal resilience Access to digital services has been crucial Efficient and effective management of to keep economies active and mitigate the spectrum is also key to maximise the socioeconomic repercussions of the Covid-19 opportunities that mobile connectivity can pandemic. Consequently, governments and bring to society. Making sure the required policymakers should implement policies spectrum resources are available under the to enhance access to connectivity and right conditions will lower broadband costs, drive investment in more resilient digital increase coverage and boost connectivity. The infrastructure for the future. This is crucial 2020s will see strong growth in the number to reactivating the region’s economy post- of Africans connected to mobile broadband. Covid-19 as digital technologies play an even As 4G and 5G grow together throughout the more important role in society. decade to come, spectrum preparation can drive cost efficiency and promote growth. To improve mobile adoption, policy measures should focus on encouraging investment in much-needed infrastructure and improving consumers’ ability to access digital services. As such, policymakers should: • rethink fiscal policy on mobile connectivity • facilitate mobile infrastructure deployment • prioritise digitisation of person-to- government transactions. 5 Executive Summary OPERATOR REVENUES AND INVESTMENT 2019 2025 Operator revenues Operator revenues Mobile Economy $44.3bn $48.7bn Sub-Saharan Africa Operator capex of $52 billion for the period 2019–2025 SMARTPHONES 2019 2025 UNIQUE MOBILE SUBSCRIBERS 2019 2025 % of total connections Excluding licensed 477m 614m cellular IoT 44% 65% 2019 2025 2025 2019-2025 Penetration Rate 50% 4G 5G CAGR: 4.3% 45% (% of population) 9% 27% 30mconnections MOBILE INTERNET USERS 2019 2025 of total connections 3% Excluding licensed cellular IoT 272m 475m of total connections Excluding licensed cellular IoT MOBILE INDUSTRY CONTRIBUTION TO GDP 2019 Penetration Rate 2019-2025 26% (% of population) 39% $155bn CAGR: 9.7% 2024 9% $184bn of GDP SIM CONNECTIONS 2019 2025 Excluding licensed cellular IoT 816m PUBLIC FUNDING 2019 EMPLOYMENT 2019 1.05bn 650,000 $17bn Jobs formally supported Penetration Rate Mobile ecosystem contribution by the mobile ecosystem 2019-2025 77% (% of population) 86% to public funding CAGR: 4.3% (before regulatory and spectrum fees) +1.4m informal jobs OPERATOR REVENUES AND INVESTMENT 2019 2025 Operator revenues Operator revenues Mobile
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