Report: 4G key to unlocking value in sub-Saharan Africa

Sub-Saharan Africa is one of the last major global growth regions for mobile services, expected to contribute 29% of global subscription growth this decade, according to research by Strategy Analytics.

The report, Sub-Saharan Africa Wireless Market Outlook: Carrier Growth Strategiesemphasizes that 4G is a top priority for SSA operators in the medium term, delivering mobile broadband coverage and cost-effective devices to increase ARPU, unlock the FWA opportunity and drive digital inclusion.

According to the report, sub-Saharan Africa is a region where 4G is still in its infancy, currently accounting for less than a quarter of mobile connections and with network coverage of 57% of the population, leaving limited coverage outside the urban centers. 4G will be key to creating market value as mobile internet adoption overtakes 2G and 3G. However, mobile operators in SSA spent less on CAPEX as a proportion of service revenue compared to operators in the Middle East and North Africa (MENA) and globally. With a capital intensity of around 15%, managed from a lower ARPU customer base, the high levels of network investment have been a challenge for some.

The report provides recommendations for operators in key areas to unlock revenue growth through digital inclusion. These focus on improving the availability of 4G smartphones and low-cost smart phones, and solving the challenge of extending 4G coverage in rural and remote communities where it is not uncommon for ARPU is less than $1 per month.

Phil Kendall, Director of Strategy Analytics’ Service Provider Group and author of the report, said: “Expanding the 4G network requires the use of innovative network products and deployment strategies, with exciting network developments in as service and refurbished network equipment in the area. Low-cost rural coverage is as much about energy costs as it is about hardware costs, with green site solutions being key to the business case for deployment. Governments also have a role to play here, both in terms of making low-band spectrum available for 4G and in terms of committing funds to national broadband plans and digital inclusion policies to support 4G for all.

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