The idea that, within a few years, everybody in Africa will have a mobile phone sounds ludicrous.
It's a premise that Samsung Electronics is promoting, with VP for Africa, George Ferreira, stating that, "in three to four years, probably every citizen in Africa will have a mobile device".
Samsung says roughly 450 million Africans don't have a cellphone, and myriad reasons lie behind that. Poverty, for a start, which makes it impossible to buy a handset or afford a call. There's a dearth of network coverage in rural areas. Plus there's a lack of education that leaves many people, especially the older generation, unsure of how to use the devices anyway.
Those formidable challenges make Samsung's optimism look rather fanciful.
Yet smartphone sales grew by 400% in Ghana in 2012, and the Galaxy Pocket is now the top-selling model, says Jaspreet Singh, Samsung's Mobile Business leader for Ghana. "Undersea cables have brought down the data costs and that's spurred the growth of data on mobile devices," he says.
The men are speaking at the Cape Town leg of a world tour to launch the Galaxy Note II, an updated version of a device that has sold more than 10 million units since its launch last year.
It looks perfect at a conference for technology journalists, telecoms operators and handset suppliers in Cape Town. But it's hard to imagine 'every citizen will have one' in the more barren parts of Africa.
Ferreira says more than 450 million phones have been sold in Africa, which is close to one device for every two people. But, on the flipside, less than half the one-billion-strong population has been reached.
Fast-growing market
Africa is the second-biggest market after China and the fastest growing. Six out of 10 of the fastest-growing economies are in Africa, and with handsets outselling computers by four to one, half of Africa's Internet access is via mobile devices.
Of all the smartphones being sold in Africa, 41% go to Nigeria, 31% to SA, and 7% to Kenya. That means the other 52 countries are buying just 21% of smartphones reaching the continent, and cheaper phones easily predominate.
We have formed smart partnerships with operators in many African countries to bring affordable smartphones to the masses.
Yet Ferreira insists Africans are hungry for these devices, and in 2013, 2014 and 2015, smartphone sales will growth enormously. "We don't only play in the premium market; we have also brought out affordable devices like the Galaxy Pocket," Ferreira says. "We have formed smart partnerships with operators in many African countries to bring affordable smartphones to the masses."
He expects telecoms operators to make phenomenal investments in infrastructure in the next two years, led by Africa's 'big five' players: MTN, Vodafone, Orange, Etisalat and Airtel.
That would be driven by their quest to sign up the unconnected masses, which have an average age of 20 and want a smartphone, even if it's an entry-level model, he says.
Ironically, as Samsung was unveiling the Galaxy Note II, the GSMA was issuing revised figures for cellphone penetration. For once, its figures were pushed downwards, not upwards, as it finally took cognisance of two obvious issues that have skewed the figures for years - gadget freaks who own several devices, and the number of inactive SIM cards.
The new figures make Ferreira's expectation of blanket coverage an even bigger task.
The GSMA figures now show the number of individual subscribers, rather than the number of issued SIM cards. By the end of 2012, there were 6.8 billion total connections, but only 3.2 billion individual subscribers, creating a penetration rate of only 45%.
A positive spin
That confirms that previous estimates may be more than 50% out, since multiple SIM card users, machine-to-machine communications and inactive cards account for more than half the total connections.
Putting a positive spin on its rather dampening findings, GSMA DG Anne Bouverot says there is a "significant growth opportunity for the mobile industry as we continue to connect the world's population. By identifying inactive SIMs and multiple SIM ownership, we have developed the most accurate measurement of the global mobile subscriber base, which shows that only 45% of the world's population has subscribed to mobile services."
Only 45% of the world's population has subscribed to mobile services.
Moreover, the GSMA has concluded that about a third of the world's population of seven billion people is unlikely to ever subscribe, for a variety of reasons, resulting in an addressable market of five billion.
Take-up won't be speedy, since even when a network reaches a rural area, it takes time for users to come on board. "In several African markets, such as Malawi, even though mobile coverage is close to 95% of the population, connection penetration still stands at only 29%," the GSMA said.
Africa has the world's lowest penetration with a combined rate of only 33%, which may reach 40% by 2017. Even in SA, one of the continent's most connected markets, only 66% of people are actually connected, tipped to reach 79% by 2017.
Those revised figures and modest predictions are less than half of what Samsung hopes to see within that timeframe. So why the optimism, I ask James Kim, Business Strategy director for Samsung Electronics.
Kim has high hopes that efforts to increase penetration will gain a valuable boost from the financial services sector.
"It's not suppliers like us that will push it, the financial sector will push these services as well," he says. "In Malawi, a lot of people are very poor but they still carry a phone because, in Malawi, phone banking is working very well. It's not economical for banks to set up branches in all the small towns but they can do it with a phone. In South Africa, you can purchase a tablet from FNB and now they are doing it in Mozambique and Botswana and it's a work in progress in Zambia."
Formidable combination
Other growth will come as rural people earn more money, spurred by the discovery of mineral resources. Mozambique's Tete province has massive coalfields to develop, Zambia has discovered more coal, and Malawi and Angola have oil reserves, which will see many rural areas get the chance to experience technology, Kim says.
The reason why 450 million Africans - or far more, according to the GSMA's new figures - are still unconnected is the formidable combination of cost, a lack of education, and the fact they have not yet realised the benefits of communication, says Kim.
"The number-one factor is cost. Our cheapest phone is $20 and in the poorest countries, the income may be $500 a year. But people are finding a way to get a phone when they see it's going to benefit them, even if it means they don't eat properly."
Samsung's corporate social responsibility efforts are also geared at increasing penetration, with support for school Internet access a priority.
"We are working on the education side because a lot of people haven't experienced electronic devices," says Kim. "Not just a phone, they haven't experienced a TV before. So in Mozambique, we invite kids and their parents to an evening every month in the village auditorium and teach them how the technology works and what the benefits are for them. Not in First World terms, but in their own language. We want people to have the benefit of technology to make their lives much easier and more affordable."
Network coverage is still an issue, but that is being resolved, he says. "Data coverage is still a bit lacking but voice is almost everywhere. Angola and Namibia are rolling out LTE networks, which makes them ahead of the UK."
Kim says Africa was included in the Galaxy Note II tour because Samsung wants to close the gap and sees Africa as having huge potential.
It's a nice idea, although Cape Town is hardly representative of 99% of the continent. And while executives, creative gurus and geeks are exploring the new Galaxy, the unconnected 67% of Africans may still be wondering what all the fuss is about.
First published in the December/January 2013 issue of ITWeb Brainstorm magazine.
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