Youth Driving Smartphone Penetration in Africa to Increase by 30% in 10 Years – Report

The number of youths driving smartphone usage in Africa is forecasted to increase by 30% in the next decade, thus, bringing the number to 506 million.

This, according to a recent report released by Counterpoint research stated that there has been tremendous change in African technology sector in the last decade which is mainly driven by infrastructure as well as social factors.

“Many of the countries are no longer technology barren lands, as steadfast urbanization and widening mobile network coverage laid the foundation for rapid smartphone adoption”, the report analysed.

Business Remarks gathered that Sub-Saharan Africa is believed to be the world’s fastest growing mobile phone market as mobile internet is becoming one of the most widely-used methods of connectivity worldwide and the vehicle for such connectivity is smartphones for many.

Furthermore, a survey carried out in six African countries by Pew Research Center disclosed that education and age were far more important factors in determining smartphone ownership and internet usage than other prominent socioeconomic variables like income and gender.

Using the internet via a smartphone in Africa requires a certain level of literacy (which, at 2 out of 3 adults according to World Bank, isn’t a given across Africa). Doing so regularly requires a reliable electricity supply, which is not always readily available. Consequently, young, educated and urban residents have been the first wave of smartphone adopters. Experts further expect the same enlarged pool of consumers to drive smartphone and internet adoption in the future. The African population in the 20-39 age group is expected to increase to 506 million.

Commenting on the smartphone market growth in Africa, the Associate Director at Counterpoint Research, Tarun Pathak said, “There is an increasing transition of users from feature phones to smartphones in the region. Availability of affordable devices, the growing ecosystem of refurbished devices, and increasing internet penetration are fueling the switch to smartphones, especially in the African Region. In the larger African countries, like Nigeria and Kenya, smartphones remain the primary medium to access internet services. There is also increasing popularity of the mobile money ecosystem, which is driving further smartphone adoption.  Price remains a key factor for smartphone adoption. Over 70% of the total smartphones sold in the region were in the US$150 price segment. ’’

As it sits, China has the highest number of mobile Internet users in the world, followed by India. In both countries, there’s a prominent link between urban populations and the usage of mobile Internet, the report noted.

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In the 2019 Sub-Saharan Africa edition of the Mobile Economy report published by GSMA, the study calculated that the mobile ecosystem across Sub-Saharan Africa generated almost $150 billion in economic value in 2018 – equivalent to 8.6 per cent of the region’s GDP. It is forecast to generate almost $185 billion (9.1 per cent of GDP) by 2023.

Sub-Saharan Africa (SSA) mobile phone market is expected to reach a compound annual growth rate of 4.6% – compared with 3% globally – between 2019 and 2025, according to analyst GSMA Intelligence. The report also stated that the mobile industry will contribute over $184 billion to GDP by 2024.

By the end of 2018, the SSA region had 456 million unique mobile subscribers, a number that is expected to jump by a further 167 million by 2025 while 27% of connections by 2025 will be on 4G with 3% on 5G.

The mobile phone penetration rate in SSA stood at 44% compared with 66% worldwide at the end of 2018. However, GSMA forecasted that 475 million people in the region will be mobile internet users by 2025.

In September 2019, 4G accounted for only 9% of total connections in the SSA region and 2G for 46%; by comparison, 4G made up 50% of total global connections while 2G made up less than 25%, according to GSMA Intelligence.

“In terms of subscriber growth, large, under-penetrated markets such as the Democratic Republic of Congo, Ethiopia, Kenya, Nigeria and Tanzania present the biggest opportunities,” says Kenechi Okeleke, senior manager at GSMA Intelligence.

“These five countries will account for half of the total number of new subscribers over the period to 2025. SSA has a number of highly competitive markets, with several comprising five or more operators.

“When it comes to total connections they are actually much higher with 850 million in 2020 and a prediction of 1 billion SIM connections by 2024.

“Sub-Saharan Africa will have more than 130 million new subscribers by 2025, half of which will come from just five markets: Nigeria, Ethiopia, DRC, Tanzania and Kenya.”

Currently, estimates from different sources put the number of smartphone users in Nigeria at between 25 and 40 million.

Similarly, smartphone connections in the region will hit 700 million by 2025. GSMA expects Nigeria to have 154 million, South Africa 73 million, and Kenya 47 million connections.

It reveals that more than 160 million new unique mobile subscribers will be added across the region by 2025, bringing the total to 623 million, representing around half of the region’s population, up from 456 million (44 per cent) in 2018.

Speaking on this, the Head of Sub-Saharan Africa, GSMA, Akinwale Goodluck urged governmental bodies on making policies that will drive faster growth in the region.

“With mobile technology at the heart of Sub-Saharan Africa’s digital journey, it is essential for policymakers in the region to implement policies and best practices that ensure sustainable growth in the mobile industry, and enable the transition to next-generation mobile networks.” he said.