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Mobile Operators in Africa Bet on Digital Services to Drive Revenue Growth

Mobile Operators in Africa Bet on Digital Services to Drive Revenue Growth

Innovation

Mobile Operators in Africa Bet on Digital Services to Drive Revenue Growth

While voice and data still account for the largest share of mobile revenues, mobile operators are betting on digital services to increase customer engagement and drive revenue growth. This is according to a report on Global Mobile Trends 2018 by GSMA. This includes developing services that enable financial transactions across multiple verticals while also bringing large portions of the population with limited access to a traditional financial institution into a growing digital payments ecosystem. 

Safaricom’s mobile money service, M-Pesa posted a revenue of US$620 million in 2017 accounting for 28% of service revenues compared to 23% in FY 2016, while MTN generated an average revenue per user of US$1.10 from 22 million mobile money customers across 14 countries, around a quarter of overall ARPU signifying the importance of the growing digital payments ecosystem in Africa.

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The report also notes that only over 4% of Sub-Saharan Africa are connected to 4G internet as at 2017.  Lack of network coverage remains a major barrier for many unconnected people in the region: around a third of the region’s population are not covered by a mobile broadband network, most of them in rural areas where more than half of the population live underscoring the challenges of the closing digital gap in the continent.

According to the report, mobile subscribers in Africa will reach 634 million by the year 2025 representing a 52% penetration rate while smartphone connections will reach 691 million. The growth will be firmly in single digits and will fall below 5% in the first half of the next decade but will be driven by the segment of the population below 14 years.

The report also stated that mobile phones are now used by two-thirds of the global population. The net increase of 180 million people in 2017 is large in absolute terms, but annual growth continues to slow from the peak of 300 million reached in 2012. 50% of the growth of global internet users to 2025 will come from five countries led by China, India, Indonesia, Nigeria, and Pakistan.”

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