Mobile sector contributes R1.3 trillion to African GDP

Mobile operators have made a significant contribution to the Sub-Saharan economy in the last year, an international organisation has found.

According to the GSM Association (GSMA), the mobile industry contributed $102bn to the region’s economy, while operators driving network expansion delivered $31bn directly.

The GSMA delivered these findings in its Mobile Economy Report for Sub-Saharan Africa 2015 report released at the Mobile – 360 conference underway in Cape Town.

“The mobile industry remains a key driver of economic growth and employment in Sub-Saharan Africa, making a vital contribution given the population growth and high unemployment levels seen in many countries in the region,” said Alex Sinclair, acting director general at the GSMA.

The contribution of the mobile industry is indicative of 5.7% of the region’s gross domestic product, with forecasts set for a $166bn contribution by 2020, or 8% of expected GDP.

Subscriber growth

Internet access is shifting to mobile as the expense of cable broadband makes it unattractive, particularly in lower income areas.

“Despite revenue and margin pressures, local mobile operators continue to invest heavily to extend network coverage to serve unconnected communities and accelerate the migration to high-speed 3G/4G mobile broadband networks,” said Sinclair.

The investment in mobile broadband services is expected to result in 41% or 386 million subscribers in the region by the end of the year, the report found, tying in with earlier GSMA predictions.

Subscriber growth is expected to reach around 518 million or half of Africa’s population by 2020.

More people in the region are connecting to networks via smartphones which now have a 20% penetration in the region, about half the global penetration.

The GSMA report shows that part of the reason for increasing smartphone growth lies in the declining price of devices in the region to below $100.

International Data Corporation (IDC) data shows that devices in this price bracket had growth of 45.1% in 2015.

Fin24

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Mobile sector contributes R1.3 trillion to African GDP