Mobile Telecoms in Africa

A media report in May 2008 said it all: “Growth in Africa’s mobile sector has defied all predictions.” The declaration, by US-based Africa Focus Bulletin, captures a widely held sentiment regarding the growth and future prospects of telecommunications in Africa.

Growth in Africa’s mobile section has defied all predictions.

The critical message underlying Africa’s great mobile telecoms story is the fact that never before has a communication technology influenced human societies so pertinently, so rapidly. In Africa and the Middle East mobile markets, dominated by the MTN Group, new research shows that mobile communications are driving GDP growth rates, with some of the highest impact experienced in the small-scale business sectors. Indeed, it is now accepted that the mobile sector’s economic impact in developing countries is double that of industrialised countries. Among the major economic contributions of the mobile sector is tax revenue, capital investment, job creation, and a battery of forward- and backward- linkages.

The rapid growth in African mobile telecoms was not altogether unexpected, given the failure of fixed-line telephony on the continent. For many decades, Africa’s dated and highly inefficient fixed-line failed to take off, registered a meagre 2.48 telephone lines per 100 inhabitants in the late 1990s, compared to 35.18 lines per 100 in North Africa, 39.43 lines in Europe and 9.55 in Asia. The main factors for this failure were low investments replete with inefficiencies, poor access to capital, and excessive state interference.

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