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Africa becomes second largest mobile market

Continent overtook both western Europe and the Americas in 2011, only lags behind Asia-Pacific in subscription numbers

By CAROLINE GABRIEL

Published: 6 November, 2011

READ MORE: Metrics | Africa & Middle East

Major operators are racing for territory in Africa, and recent figures from analysts at Informa indicate why. The region has become the second most connected in the world in mobile terms, after Asia-Pacific, and has the highest growth potential. At the end of 2010, Africa was in fourth place among mobile regions, but just nine months later had 616m mobile subscriptions, overtaking western Europe during the second quarter of 2011 and the Americans in the third.

This shows Africa becoming a powerhouse in terms of absolute mobile subscriptions, not just high growth rates from a small base, as was the common pattern in the previous decade. The rise has been driven by digital divide initiatives, lower cost devices and services, growing middle classes, and the fact that, in many rural areas, wireless is the main form of internet access because of limited wireline infrastructure build-out. However, even more than in other regions, the number of subscriptions does not equate to the number of mobile users - a major factor in the increase has been the rise in dual-SIM phones, which enable a customer to have two or more SIM cards and switch between them for the cheapest or most reliable link. Nokia, in particular, saw dual-SIM devices as the key growth driver for featurephones during its most recent quarter.

"The combination in Africa of a still relatively immature telecoms market with factors including population growth, strong competition among providers and the increasing affordability of mobile devices, explains Africa's move up the regional mobile market rankings as well as its strong growth forecast," commented head of MEA mobile research Matthew Reed. He forecasts that Africa will cross the one billion subscriptions mark in 2016, with most people having two SIM cards (the number of unique users is expected to be about 572m).

The top three markets in the continent by subscriptions - Nigeria, Egypt and South Africa - will remain constant throughout the five-year forecast period, with 152m, 118m and 80.6m connections respectively expected by 2016. At that date, overall mobile penetration will be 86.92%. With other regions higher than this, and many well over 100%, the figure shows the growth potential that will remain in Africa throughout the decade. Meanwhile, the share of the market held by 3G subscriptions will rise from 6.6% at the end of 2011 to 46% five years later.

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