Given the size of the contribution the mobile industry makes to the sub-Saharan African economy, it could be argued that the region's businesses and enterprises have more at stake in the future evolution of network technology than anywhere else in the world. It was therefore not surprising that when AfricaCom's annual Insights Survey asked which technologies telcos should be investing their money into over the next year, 5G came out on top with almost 29% of the vote.
This, however, was tempered by a touch of realism about how soon African businesses and consumers would gain access to the benefits of 5G. While just under a third (30%) were confident that the first commercial rollouts of 5G would be seen on the continent in 2020, almost a quarter (23%) believed there would be no launches at all before 2023. A majority (54%) certainly feel 5G will not be widespread across the majority of the continent before that date.
In actual fact, Africa has already seen its first commercial 5G service launch -- a feat claimed by South African data-only mobile network operator Rain in February 2019. It was by most measures a fairly limited launch, comprising a handful of service areas in Johannesburg. But working with Chinese infrastructure giant Huawei, Rain has expressed its ambition to adapt its current 4G/LTE network to allow for rapid rollout in other major cities later this year and into 2020.
Rain's focus is on using 5G to provide fixed wireless access (FWA) Internet services to homes and businesses. Given the fact that fixed broadband penetration is below 2% across large swathes of Africa, FWA is forecast to be a major driver of early 5G adoption.
However, there are not many parts of Africa that can follow the Rain model and build out 5G capabilities on existing 4G/LTE infrastructure, because 4G penetration itself remains low -- accounting for just 7% of mobile connections -- compared to a global average of 44%. While that leaves room for 4G to continue to grow rapidly -- and the 4G subscriber base has been roughly doubling every year -- it is perhaps a surprise that ongoing investment in 4G networks is not viewed as more of a priority within the industry. Just shy of 14% of the survey respondents felt that is where operators should be focusing their investment efforts.
Instead, the participants felt that analytics and big data (27%) and mobile finance platforms (19%) presented better options for telco investment. With traditional banking and financial services beyond the reach of millions of African residents, mobile money services have boomed, offering everything from deposit accounts to insurance to lending.
There were just under 400 million registered mobile money account users in Africa at the end of 2018, a global high and a figure that grew 14% from the previous year. What is interesting about the African mobile money market is that it is still largely text-based and therefore distinct from the smartphone app-based FinTech markets enjoying rapid growth in Asia and elsewhere across the globe.
This is partly to do with low smartphone penetration amongst African consumers, and partly because, up until recently, pre-data 2G networks have continued to dominate mobile service availability -- 3G is only predicted to overtake 2G this year.
With such a large and expanding user base already tuned in to mobile money services, operators would no doubt love to cash in with a broader range of data-based FinTech services.
Read the full results of AfricaCom's 2019 Insights Survey here, including African tech and telecoms investment priorities, opinion on the impact of AI in Africa, the most in-demand tech and telecoms skills for 2020 and much more.
AfricaCom 2019 takes place in Cape Town, South Africa from November 12-14.
This year did not begin the way most people expected it to, so what does the future of the telecoms sector look like in Africa in 2020? In this Connecting Africa online event, local analysts and industry stakeholders will discuss what African operators’ priorities for the year should be and the most significant market trends expected to dominate in 2020.
Will MNOs focus on sweating their current assets rather than investing in new technologies like 5G?
What impact will COVID-19 have on the continent’s networks?
What are the hot market trends in Africa when it comes to voice, data and mobile financial services?
The majority of 5G in Africa is still in the testing stage. However, as operators prepare their networks for the technology jump, what strategies are they deploying to ensure they gain the full value that 5G can offer Africa? This digital symposium will give you an insight into the opportunities and challenges facing Africa’s 5G rollout, with some country specific case studies unpacked.
How 5G-ready is African enterprise?
Is 5G a priority for in Africa, should it be? Or can operators and businesses focus on growing their 3G and 4G networks for enterprise instead?
What are the most significant enterprise business applications for 5G deployment on the continent, and where can 5G facilitate IoT applications?
Africa was the birthplace of Mobile Money and while it continues to rise in popularity, the industry is quickly evolving and launching more mobile-based financial services every day. In this Connecting Africa online event, local analysts and industry stakeholders will discuss how telcos are disrupting the financial services space and what the rise of Mobile Money 2.0 will look like for Africa.
From cash to mobile: heading towards a cashless society
Expanding MFS offerings beyond mobile money transfers
MNOs vs banks vs fintechs: an evolving competitive landscape
Unconnected and unbanked: fintech to improve financial inclusion
The rise of micro-loans and insurance through mobile platforms
Africa has the fastest growing population in the world and also the youngest, with 60% of Africans under the age of 25. It is clear that the next billion connected are going to be the mobile-only generation. This digital symposium will bring industry experts together to discuss Africa’s digital divide and how to get devices into the hands of young Africans and empower them to join the digital revolution.
Who’s Driving? The role of government & regulator, private tech companies, and public-private partnerships
Device affordability: are we reaching a tipping point?
Status check: Satellite vs Fiber and the enduring infrastructure gap
Exploring the wider societal and economic benefits of a connected, digitally literate continent