November 1, 2023

5G to Benefit the Sub-Saharan Africa Economy by $11 Billion in 2030

In its annual report on the state of the mobile economy in sub-Saharan Africa, the GSMA says the mobile connectivity on the continent "continues to drive digital transformation and socioeconomic advancements. This underlines the need for continued efforts to address the persisting barriers that impact mobile internet adoption in the region, particularly the affordability of devices, online safety concerns and the lack of digital skills." The UK-based organization that represents the interests of mobile operators worldwide adds: "Meanwhile, authorities and enterprises see an opportunity to leverage growing 4G and 5G networks, alongside emerging technologies such as AI and IoT, to enhance productivity and efficiency in service delivery."

Findings of the report, which is available in English and Fran├žais, include:

Growing 5G momentum

"In 2022, there was a marked uptick in 5G-related activities in Sub-Saharan Africa, including 5G commercial launches in 15 countries and a growing number of spectrum allocations. This comes at a time when 3G is the most dominant technology in the region (accounting for 55% of total connections in 2022) while 4G is already dominant in other regions, implying network and customer readiness for the transition to 4G. The approach to 5G in the region will need to consider the current connectivity landscape and unique market features that could affect the rollout and adoption of the technology. 5G network ecosystem players in the region must also find ways to deliver cost-effective and efficient 5G networks, balancing investment and value creation."

Steering growth with AI

"The emergence of new AI tools and use cases is accelerating the implementation of AI across various verticals and business processes. Most AI developments are occurring in advanced markets. However, the technology can be utilized in any scenario where there is sufficient data to draw insights. As a result, several industry players are already taking steps to apply AI across a variety of use cases in Sub-Saharan Africa. The potential benefit of AI in the region is significant, given that it can help offset the impact of limited resources and poor infrastructure in the delivery of many life-enhancing services, such as healthcare and education. Mobile operators in the region have employed AI at different levels, from improving network operations and customer services to achieving efficiencies and cost savings."

Climate-related risks spur circular economy principles

"The concept of circularity has risen to the top of the agenda for policymakers and industry players in light of growing concerns around the generation of e-waste and unsustainable levels of consumption of natural resources. Although the technical lifespan of a mobile device is now between four and seven years, the average use period of mobile devices is only around three years. Governments and industry players have a role to play in incentivizing consumers. This includes building new channels and suppliers to collect, refurbish and resell devices and implementing awareness campaigns on sustainability. Some operators in Sub-Saharan Africa are already taking a lead in this regard, with initiatives to drive circularity in mobile phones and other digital devices."

Infographic: GSMA

Improving smartphone access

"Smartphone affordability is a key barrier to using mobile internet. The average selling price of smartphones in Africa has reduced significantly in recent years, with an influx of devices priced at below $100 – but the cost remains unaffordable for many. The challenge for manufacturers is to produce devices at low enough price points that align with local earning capacities and allow them to gain market share. To ease the current cost burden, operators offer a range of initiatives, including device financing plans, instalment payments and entry-level smartphones through partnerships with manufacturers."

Collaboration and innovation in fintech is on the rise

"Fintech has become increasingly prominent in Sub-Saharan Africa, driven by the need to improve regional financial and digital inclusion. The industry has seen a rise in partnerships and innovation, leading to the diversification of products on offer, particularly in the payments segments. Operators have partnered with ecosystem players to expand products and offer options such as buy now, pay later (BNPL). At the same time, the growing fintech startup industry continues to attract investors, allowing them to improve access to a variety of financial products for both individuals and small businesses, such as microlending and B2B payments."

Policies for safe and inclusive development

"As cyberattacks continue to grow in scale and scope, governments face increasing pressure to protect their citizens and infrastructure and establish a framework for the mobile industry. Sub-Saharan Africa's rapid technological evolution makes the region an attractive target for fraud and cyberattacks."

Infographic: GSMA

According to the GSMA, "5G is expected to benefit the Sub-Saharan Africa economy by $11 billion in 2030, accounting for more than 6% of the overall economic impact of mobile." While it is encouraging to learn that mobile connectivity in Sub-Saharan Africa continues to drive digital transformation and socioeconomic advances, I have concerns about the mobile internet usage gap, which refers to individuals who are not using mobile internet despite living in an area covered by mobile broadband networks. of 59%. Nevertheless, the continent holds significant opportunities for entrepreneurs to develop innovative solutions in AI, IoT, cybersecurity, EdTech, fintech, digital health, e-commerce, and enterprise services.

What opportunities are you seeing the Sub-Saharan Africa's mobile economy?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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