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Experts forecast $234b African mobile market by 2020

By on September 11, 2013

Africa’s vibrant mobile phone market is forecast to increase four fold in size from a value of $60 billion in 2013 to $234 billion by 2020, according to experts at Manifest Mind LLC, a U.S. based research firm.

The continent’s mobile phone market is expected to grow at an annual rate of 21.27 per cent between 2013 and 2020, to reach the set target.

Africa’s telecoms sector growth has surged in the last 10 years as the continent has overtaken Europe and Latin America to become the second biggest market in the world for handsets after Asia, according to global mobile phone body, the GSMA. Figures from the GSMA also indicate that from 2007 to 2012 mobile connections in Africa more than doubled from 283 million to 735 million.

In 2005, the number of mobile connections in Africa amounted to just 15 per cent of the continent’s total population, according to the GSMA. However, by 2012, this percentage had jumped to 72 per cent of Africa’s estimated one billion people.

However, Manifest says that despite Africa’s seemingly growing mobile phone usage rates, there could be significant scope for further take-up of handsets on the continent. “Although Africa boasts a number of fast-growing economies, many inhabitants still live below globally recognised poverty lines. As such, mobile users in Africa are highly sensitive to costs and have adopted mobile phone–usage strategies to minimise these costs,” says Manifest.

“These strategies include the use of multiple subscriber identification module (SIM) cards in their phones and the extensive sharing of phones between users or families. Given this use of multiple SIM cards, Manifest Mind estimates that mobile phone penetration rates for unique subscribers are well below other popular market estimates.

“This exposes a mobile telecommunications market of more than 700 million people who have yet to own their own phone,” Manifest explains. Mobile network operators are to be the largest beneficiaries of the growth during the forecast period, followed by mobile distributors and retailers, says Manifest.

Manifest equally noted that application developers and content providers are also predicted to benefit during the period. However, demand for smartphones could also rise significantly during the forecast period, says Manifest.

Manifest added that mobile network operators are upgrading their infrastructures to handle 3G and 4G long-term evolution (LTE) bandwidths from the current predominant 2G services. “As it stands, 3G coverage is limited, but available in 31 African countries,” says Manifest.

 

 

[Daily Independent]