“Mobile telecommunication industry will contribute US$142 billion or 8.6% of Sub Saharan Africa’s (SSA) gross domestic product (GDP) by 2020”, according to a new GSMA study.

GSMA’s new report, "The Mobile Economy: Sub-Saharan Africa 2017" published this week at the GSMA Mobile 360 Africa event in Dar Es Salaam, Tanzania, forecasts huge growth for  the mobile industry. The report cements the sentiments shared last week in this column on opportunities for mobile services. According to GSMA report, over half a billion people across SSA will be subscribed to a mobile service by 2020 showing huge potential for the mobile industry. Mobile industry has taken over from banking to retailing, introducing vital tools in delivering digital and financial inclusion in SSA. Around 270 million people in the region now access the internet through mobile devices, while the number of registered mobile money accounts has reached 280 million, according to GSMA report. Mobile operators and others are also leveraging the ubiquity of mobile networks across the region to deliver services that are working towards achieving the UN Sustainable Development Goals (SDGs) in areas such as energy, water and sanitation, healthcare and education. Although huge growth is expected, it will be concentrated in large underpenetrated markets such as the Democratic Republic of Congo (DRC), Ethiopia, Nigeria and Tanzania, which together will account for half of the 115 million new subscribers expected in SSA by 2020. These countries have penetration rate below 50%.

As noted by GSMA, more people across SSA are consuming digital content, particularly online video, via mobile devices. The growing demand for digital content in the region is expected to increase mobile data traffic significantly in the coming years. The latest Ericsson Mobility report forecasts a twelvefold rise in the amount of mobile data used in Africa over the next five years. Already in some SSA countries, a number of home-grown platforms have been developed, notably IROKOtv, Buni tv and Bozza to challenge the dominance of popular global platforms, such as YouTube and Facebook. Many of these local platforms are collaborating with mobile operators to grow their audience and enable technical features that improve affordability.

Zimbabwe ,which has an estimated unique subscriber base of 9.4 million representing 58% penetration rate ,  will likely realize growth driven by data and mobile money services going forward. Although aggregate mobile operators revenues came off by 9.7% to $179.8m in the first quarter of the year compared to the previous quarter there is huge potential in the sector. The decline on a quarterly basis was a result of a fall in voice traffic which enjoys a huge share in revenue contribution. Mobile voice traffic eased by 8.9% to 833.6 million minutes when compared to last quarter and eased 5% when compared to same period last year. Substitute disruptive products such as over-the-top (OTT) together with depressed demand as a result of weak economic activity contributed to the fall in revenues. Voice revenue accounts for 59% of total mobile revenue, data for 21.5% while mobile money and SMS account for 10.2% and 6.8% respectively. However, data and mobile money are expected to rise given anticipated growth in subscriber base and increased mobile transaction volumes as a result of the cash-lite environment. According to POTRAZ, Internet Access Providers generated a total of $45.6 million in revenues a growth of 11.4% quarter on quarter highlighting the potential in that segment. The uptake of fibre is also projected to increase driven by the improved affordability arising out of increased competition.  POTRAZ projects internet and data services driving industry growth in terms of usage volumes while projecting a decline in voice and SMS traffic. New innovations and wider opportunities surrounding mobile money will bring in more avenues for growth.

However, what might limit growth in Zimbabwe which may make the country take an opposite path when compared to the region as projected by GSMA over the outlook period is slowing investment by mobile operators. Investments by mobile operators declined by 85.4% on a quarterly basis. Capital commitments have generally been deferred due to international payments gridlocks and cashflow challenges which is a common phenomenon in the economy.