Africa's mobile operators to invest billions of dollars

The GSM Association (GSMA) announced at the 'Connect Africa' summit held in Kigali, Rwanda that the mobile industry plans to invest heavily in sub-Saharan Africa over the next five years to provide more than 90% of the population with mobile coverage.

The GSM Association is the global trade association representing more than 700 GSM mobile phone operators across 218 countries and territories of the world.

Tanzania's Vodacom and MTN who operate in Uganda and Rwanda are GSMA subscribers. Celtel a subsidiary of the Kuwait based Zain Group also connects three of the East Africa countries to the GSMA.

With a primary goal to ensure mobile phones and wireless services work globally and are easily accessible, the association's members serve more than two billion customers, 82% of the world's mobile phone users.

Increasing growth rates

Tom Phillips the Chief Government and Regulatory Affairs Officer of the GSMA told Highway Africa News Agency (HANA) at the summit that, the GSMA projects have an increase of 10 percentage points in mobile penetration and that it would increase the annual growth rate of GDP by up to 1.2 percentage points.

There are more than 150 million mobile subscribers in sub-Saharan Africa today.

However, a further 350 million people have mobile coverage and are not yet directly connected.

It is against this background that the sub-Saharan mobile industry players are focused on using its economies of scale to connect these people. As the number of users grow, so too will economic prosperity.

In a related statement released at the summit, the GSMA says the investment will be used to extend the reach of GSM mobile networks, enhanced with third generation (3G) technologies like GPRS, EDGE and HSPA, to provide a rich suite of mobile multimedia services, including Internet access.

Since sub-Saharan governments began liberalising their telecommunications sectors at the turn of the new millennium, the GSMA estimates that the mobile industry has invested $35 billion, providing more than 500 million people (67% of the population) in sub-Saharan Africa with mobile coverage.

"This surge in investment by the mobile industry has changed the lives of millions of Africans, catalysing economic development and strengthening social ties," said Rob Conway, CEO of the GSMA.

"We have the passion and dedication to provide Africa with a world class infrastructure," said MTN Group President and CEO Phuthuma Nhleko.

"We are proud to be a leading investor in Africa, bringing world-class services to our customers on the continent through our Celtel subsidiary," added Dr. Saad Al Barrak, CEO of the Zain Group.

Alan Knott-Craig, CEO of Vodacom Group, said, "We are proud of our investment in Africa, and we will continue to focus on our customers and the development of products and services that benefit them."

Lower the barriers

In order to create the conditions that will maximise the benefit of this new investment, the GSMA also called upon governments across sub-Saharan Africa to follow the President of Rwanda, His Excellency Paul Kagame's advice.

Kagame's advice is that, "The barriers that governments put in the path of entrepreneurs need to be urgently removed. Individuals and companies create wealth, not governments. This is not to say that the state should become invisible. But governments should see their roles as enablers of business, and not gatekeepers that control and hamper it."

The GSMA said that it believes that, "The world's governments have an opportunity to narrow the digital divide between those who enjoy high-speed access to multimedia services today and the many people who can't yet be economically served by broadband networks."

According to Tom Phillips, "It is important that the world's governments set aside this spectrum in a harmonised way, enabling handset makers to achieve economies of scale, thereby reducing the cost of access devices for consumers."

"African Governments also need to address other barriers to the uptake of mobile communications, such as high consumer taxes," Phillips said.

Mobile specific taxes are levied in Ghana, Kenya, Tanzania, Uganda and Zambia; if these were lowered or removed, government tax receipts would actually increase as more people will connect and use mobile services, boosting Value Added Tax receipts and stimulating wider economic activity.

High licence fees and other regulatory bottlenecks, such as international gateway monopolies, also constrain the competitiveness of African business.

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