Nigeria, four others to account for 40% of new smartphone connections by 2020

Currently, Nigeria’s smartphone penetration as at 2016 stood at 30 per cent, but there has been more adoption, especially as new and cheaper devices are entering the market, almost on a monthly basis.

Nigeria, China, India, Indonesia and Pakistan are markets that will account for more than 40 per cent of the 1.6 billion new smartphone connections by 2020. This is according to the Global system for Mobile Communications (GSMA).

Currently, Nigeria’s smartphone penetration as at 2016 stood at 30 per cent, but there has been more adoption, especially as new and cheaper devices are entering the market, almost on a monthly basis. A typical example is Google ICE 2 smartphone.

GSMA, which noted that smartphones account for over half of total connections globally, said as with subscriber growth, smartphone growth is being driven by developing markets.

The body, which represents the interest of over 800 operators globally, informed that lower cost smartphones from local manufacturers such as Huawei, Oppo, OnePlus and Xiaomi in China, Micromax in India, and now AfriOne in Nigeria, are helping to address the affordability barrier.

GSMA said though it took four years to move from four billion to five billion; reaching six billion mobile subscribers will take longer still. It stressed that there are currently 4.1 billion connections and is expected to hit 5.7 billion by 2020.

It disclosed that the digital divide is greatest in India and Sub-Saharan Africa (SSA). India and SSA account for 42 per cent of the world’s unconnected, with more than 60 per cent of their respective populations not yet on the Internet.

Specifically, while there are about 820 million people in India, still not on the Internet, Nigeria and other SSA countries have about 708 persons not on the Internet currently.

Last year, the Nigerian Communications Commission (NCC) surveyed showed that some 200 communities in Nigeria, which house about 40 million people, were yet to have access to any basic telephone services.

GSMA also revealed that African telecoms operators earned in revenue $41 billion in 2016, which has been projected to hit $55 billion by 2020.

Overall mobile penetration, according to the body was 43 per cent at the end of 2016, the lowest in the world.

It disclosed that on the average, 70 per cent of adults above 16 years old already have a mobile subscription, but that new growth will largely come from the region’s under 16 year-olds, who account for 45 per cent of the total population and only10 per cent of total mobile subscriptions.

“Mobile uptake by the young, tech-savvy population will drive smartphone adoption and demand for data-centric services, leading to higher levels of mobile engagement in the region,” it stated.

GSMA said most Africans are still on 2G but this is rapidly changing; 3G/4G will account for 60 per cent of connections by 2020 and 85 per cent by 2025.

The telecoms body said this trend is a double-edged sword for mobile operators: the rise in data traffic is boosting data revenues, but IP-comms substitution takes away from voice and SMS, which still account for more than 70 per cent of service revenues and are exposed when most consumers are on prepaid tariffs.

Economic growth in Sub-Saharan Africa slowed to its lowest level in 20 years during 2016 due to lower commodity prices and external shocks. Although the economic outlook for 2017 and beyond has improved, the regulatory environment remains challenging.

As a result, the region’s near-term revenue growth is still healthy but will decline markedly from 2018. This, combined with consumer time continuing to migrate to OTT services, means African operators need to place a greater urgency on searching for new growth streams other than subscriber growth.