The African Telecommunication Indicators 2004 report states that mobile subscriber levels grew 10 times between 1998 and 2003, to almost 52 million. There are now more than twice as many mobile subscribers in Africa as fixed-line subscribers.
A new report shows that mobile telephony has been extremely important in enabling access to telecommunications in Africa.
The African Telecommunication Indicators 2004 report was published to coincide with the May Telecom Africa 2004, a conference hosted by the International Telecommunication Union in Egypt.
The report shows that mobile telephony has been extremely important in enabling access to telecommunications in Africa; mobile penetration exceeded 6.2 percent at the end of 2003, while fixed-line penetration languished at three percent. Key drivers behind the increase include demand, sector reform, the licensing of new competition and the emergence of important strategic investors.
But there are troubling indicators in the report too. Despite the astounding growth rate, overall mobile penetration in Africa is the lowest of any region. Penetration was at six percent in 2003, which compares unfavourably with the global figure of 22 percent.
Low fixed-line penetration
The report says the percentage of the African population within range of a mobile signal is estimated at only 60 percent, the lowest in the world. At the end of 2003, less than half of the population in Sub-Saharan Africa could receive a mobile signal.
It is clear that mobile telephony has boosted access to telecom services, but it is not certain to what extent. Figures are unclear, but the report’s authors estimate that as many as half of the total mobile subscribers already had access to fixed-line services.
Low fixed-line penetration is a major barrier to traditional Internet services, and the report indicates potential for wireless Internet through technologies such as SMS, WAP, GPRS and even 3G IP-based services. SMS and WAP usage are growing in African countries, with South Africa leading the field.
GPRS has been launched in a number of markets, with more ready to follow. South Africa was the first, launching GPRS in 2002, but only one percent of mobile subscribers have taken up the service. Some countries are using fixed wireless networks to provide 3G services, and Angola is likely to launch a mobile 3G network.
The report also indicates the potential of technologies such as Wi-Fi and Wi-Max for providing high-speed access. Transmission costs are relatively low but modem-equipped computers are still fairly expensive, which makes it likely that only those people who already have suitable PCs will benefit from services.
Competition boosts mobile penetration
A key point is the importance of a transparent and competitive market; countries with competition have significantly higher rates of mobile penetration than monopoly markets, even where per-capita incomes are the same. The report states that high growth rates where there are incumbent monopoly mobile operators are usually driven by the threat of impending competition. This prompts operators to introduce new cost-effective technologies or reduce prices.
The report concludes that an effective regulatory environment is an essential condition for future growth in Africa. Interconnection issues have been a major problem throughout the continent, and the failure of incumbents to sign agreements has had a stifling effect on competition. These difficulties present a significant barrier to investor confidence and must be removed to ensure sustained development.
