Africa is on the verge of a major technological transformation as connectivity services continue to surge year after year. With a population of 1.1 billion and a young demographic, the continent is ripe for a surge in data usage and opportunities for operators. However, achieving universal connectivity remains a challenge, and the six largest operator groups in Africa are looking to lead by example by collaborating with governments to create the right market structures.
The GSMA, which spearheaded the agreement, brought together Airtel Africa, Axian Telecom, Ethio Telecom, MTN, Orange, and Vodacom to work more closely on aligning their strategies in key areas such as taxation, regulatory support, climate policies, and energy. The mobile operators in Sub-Saharan Africa invest between $6-8 billion annually in capital expenditure, which equates to around 20% of revenues. However, they argue that more is needed to meet their ambitious target of connecting all 1.1 billion people in Africa and digitally transforming the continent.
Between 2013 and 2023, operators invested over US$70 billion in building mobile infrastructure to connect 85% of Africans to mobile broadband connectivity, while the global average is 95%. However, more than 680 million people do not subscribe to mobile broadband services despite having coverage. The World Bank estimates another US$100 billion is needed to provide universal connectivity in Africa.
The head of Sub-Saharan Africa at GSMA, Angela Wamola, predicted fourfold growth in data usage in Africa as internet access becomes central to the functioning of economies. She also noted that AI models would increase the amount of data needed for Africa, which would have a corresponding impact on energy needs.
The coverage gap in rural areas is difficult to fill as operators must see a return on their investment. Governments must collaborate with operators to find solutions to plug these gaps. Airtel Africa’s Chief Regulatory Officer, Daddy Bujitu Mukadi, noted that the biggest challenge was coverage in rural areas, where there was no business case.
The Big 6 are calling for a new taxation model for the telecoms sector to enable them to pass on savings to consumers. Getting the right financial support from governments through tax breaks would enable operators to invest more in base stations and spread their coverage. However, this also brings up the major challenge of energy, which has long plagued the African continent. This must be tackled in tandem, argued MTN Group’s Chief Sustainability and Corporate Affairs Officer, Nompilo Morafo.
Axian Telecom CEO Hassanein Hiridjee estimated that operators would need up to 10 times more energy than they consume today to meet the growing demand for mobile connectivity. He added that governments across Africa are starting to recognize the value of mobile connectivity after launching national digital ID cards and using mobile phones for cash transfers.
