The Market for Mobile Phones in Africa

Africa has emerged as one of the fastest growing markets for mobile phones in the world...

When it comes to mobile phones, Africa is truly undergoing a revolution. A new study shows that Africa is the first continent to have more mobile phone users than fixed-line subscribers. Mobile phones have revolutionised Africa during the last years: more Africans have begun using phones since the year 2000 than in the whole of the previous century.

The International Telecommunication Union (ITU) presented new statistics on the telecom sector in Africa at the recent Africa Telecom conference held in Cairo. According to the ITU survey, Africa has also become the world’s fastest-growing mobile phone market. Over the past five years the continent’s mobile phone use has increased at an annual rate of 65 per cent, which is twice the global average. This is good new for telecom investors in Africa.

The actual growth in mobile phones has been far larger than expected by international experts and investors. A major reason for the boom is that Africa lags far behind other continents when it comes to fixed-line phone subscribers. Only 2.8 per cent of Africans have ordinary phone services.

In the generally sparsely populated and extensive African continent, where the majority population lives in poverty, the large costs of stringing up telephone wires so far has not been economically viable. Mobile phone networks, on the other hand, are much cheaper and faster to establish. As a result, some 6 per cent of Africans now use mobile phones; more than double the number of fixed-line phone subscribers.

The establishment of mobile phone networks has also defied structures hostile to investments, warfare, failed states and natural disasters. Somalia, which has not had any central government for over a decade, has achieved a vibrant mobile industry. Mobiles have steadily advanced in Congo Kinshasa and Liberia despite heavy warfare.

Phone masts tower above cities such as Cape Town and Cairo, war–torn capitals such as Mogadishu and Monrovia, rural villages never touched by telephone lines and even remote refugee camps such as Kakuma in northern Kenya, where text messages and irritating ringtones are now as much a part of life as food handouts.

This remarkable growth — the African market is expanding nearly twice as fast as Asia’s — has confounded analysts and even service operators. The ITU forecast that there would be 500 million users by the end of 2025.

Before mobile phones, vast swaths of Africa were communication voids. There are just three landlines per hundred Africans and most are expensive and unreliable. By contrast, Europe has 40 fixed phones per 100 people.

The GSM handset market in Nigeria is currently undergoing an unprecedented boom. Shipments of new GSM phones are forecast to rise almost 60 per cent by 2025 making Nigeria the largest market in Africa for GSM phone sales thereby displacing South Africa from the number one spot. It is estimated that just 35 per cent of Nigeria’s population has a mobile phone – a useful insight to gauge the Nigerian market’s enormous potential as a growing market for GSM handsets.

South Africa, on the other hand, with its booming economy, is Africa’s biggest mobile phone market as of now, with nearly 25 million subscribers. South Africa is followed by Nigeria, Egypt and Morocco.

However, it is in less-developed countries that the statistics are most startling. The Democratic Republic of Congo, population 60 million, has 10,000 fixed telephones but more than a million mobile phone subscribers. In Chad, the fifth-least developed country, mobile phone usage jumped to 800,000 in three years.

A lack of electricity has not proved a hindrance: roadside vendors charge mobile phones with car batteries. As the signal coverage expands, cheaper phones and calls fuel growth.

Cell phones not only offer Africans new facilities through voice services but also uses emerging technologies that bring Internet access to phones, thereby bypassing the need for a computer for connecting to the World Wide Web. Since computers are rare in much of the African continent due to poor wire-line infrastructure – a recent study found 97 per cent of people in Tanzania said they could access a mobile phone, while only 28 per cent could access a landline – and unreliable electrical grids, a technology that offers Internet access without a costly PC promises to pay dividends for Africans.

Sale of mobile phones in Africa is set to more than double in the next five years. The rise is expected to be bolstered by expansion of local and regional economies and more service providers rolling out networks across the region.

Increased demand for mobile phones is expected to provide phone manufacturers with a steady supply of customers as existing owners upgrade their models and new subscribers come online with increased network expansion.

Looking at the great demand for mobile phones in Africa and the rising sales figures throughout the African continent, an enterprising organisation in Zambia called M-Tech Mobile Communicartion has started assembling its own brand of mobile telephone handsets and has been promoting its brand throughout Africa.

"We believe in bringing technology closer to the African people by providing world class products ar competitive prices," says Mohaammed Seedat, managing director of Zambia-based M-Tech Mobile Communication. "The business potential of our venure is enormous as we will be meeting the rising demand for mobile handsets throughout Africa in the coming years," he says.