The ongoing global health crisis has left a trail of devastation in its wake. As we approach the first anniversary of the COVID-19 wave being officially acknowledged as a pandemic, we can all testify that it has decimated many businesses and in some instances claimed the scalps of entire industries.
One industry that has however gone against the grain is Information and Communication Technology (ICT). Spurred by the need to achieve things – work or play – remotely, the fast-rising sector has risen at an exponentially faster rate locally and globally, and is projected to continue in the same vein for the foreseeable future.
Growth in numbers
According to a report by leading networking and telecommunications firm, Ericsson, published in November 2020, mobile data traffic in sub-Saharan Africa (SSA) is projected to grow by as much as 650% of the current figuresby 2026.
This will see total mobile data traffic rising from, on the average, 0.87 exabytes (EB) to 5.6EB. For context, one EB translates into 1,000,000,000 gigabytes (GB) of data. Furthermore, with the number of active smartphones in SSA estimated to stand at 340 million and projected to double over the same period under consideration, average traffic per smartphone is expected to reach 8.9GB over the forecast period.
Driven by a shift in demographic factors including rapid urbanisation as well as a young, expanding population with increasing digital skills and more access to comparatively more affordable smartphones, mobile broadband subscriptions in sub-Saharan Africa (SSA) are predicted to increase and reach 76 percent of mobile subscriptions.
A pronounced increase in population and a rapid expansion in the labour force characterise the current demographic trends in SSA. Specifically, the SSA population is projected to rise to 1.7 billion in 2040 from the 1 billion today – while the labour force will increase by 20 million per year over the next two decades (IMF, 2018). The expected rise in population constitutes an opportunity to seize a demographic dividend, while simultaneously requiring an improved connectivity. Governments should consider infrastructure gaps, with an emphasis on digital, to leverage opportunities from the ongoing technological revolution.
Over the forecast period, distinct volumes of 5G subscriptions are expected from 2022, reaching 5 percent in 2026.
While 5G and LTE subscriptions will continue to grow over the next 6 years, High Speed Packet Access (HSPA) will remain the dominant technology in SSA with a share of over 40 percent in 2026.
“In addition to the need driven by the pandemic, there are three main factors that drive Fixed Wireless Access (FWA) growth. First, demand from consumers and businesses for digital services continue, driving the need for broadband connectivity.
“Second, FWA delivered over 4G or 5G is an increasingly cost-efficient broadband alternative in areas with limited availability of fixed services, such as DSL, cable and fibre. Increasing capacity, allowed by greater spectrum allocations and technology advancements for 4G and 5G networks, is driving higher network efficiency in terms of the cost per delivered gigabyte.
“Third, nations are fuelling broadband connectivity through programmes and subsidies, as it is considered vital for digitalisation efforts and economic growth,” a portion of Ericsson’s report reads.
A number of significant challenges exist for the increased adoption of mobile technology; and while some are sector-specific, the vast majority of these impeding factors cut across the entire spectrum.
Financial considerations as a result of high upfront costs have ensured that private mobile telecommunications operators frequently lack the financial incentives to operate in sparsely populated areas where broadband infrastructure is not in place, as it only serves to leave them with poor returns on their investments.
Without significant investment by the state, only urban areas may be upgraded to new technologies – resulting in a plethora of underserved areas with low connectivity, inferior quality of service, and higher prices.
Apart from infrastructure gaps, affordability and user-knowledge also contribute to the current mobile Digital Divide – the gap between those able to benefit from the digital age and those who are not.
Even if the required infrastructure is made available, uneven access to modern mobile technology adoption may persist if poorer and rural households cannot afford smart devices and monthly data fees; or if they lack capacity to access the Internet due to insufficient education or skills.
Low income per capita combined with inadequate human capital has the potential to derail the forecasted growth, especially in rural areas, reinforcing the mobile Digital Divide.
The population of SSA is projected to rise by 70% to 1.7 billion in 2040 from 1 billion today; and the labour force is estimated to increase by 20 million per year over the next two decades, according to a study by the International Monetary Fund (IMF) in 2018.
This will lead to more rapid urbanisation and the associated challenges. The urban population has on average risen by approximately 4.4 percent annually over the last 50 years, with the average urbanisation rate now exceeding 40 percent (United Nations, 2018).
African cities share in general three challenges that need to be addressed to support high and inclusive growth: they are crowded, but not economically dense; disconnected; and costly for households and firms.
A study by Senior Economists at the International Monetary Fund C. Emre Alper and Michal Miktus offers invaluable insight into the cost of fully implementing Long Term Evolution (LTE) or 4G, as well as 5G.
The study, ‘Bridging the Mobile Digital Divide in sub-Saharan Africa: Costing under Demographic Change and Urbanisation’ published in 2019, finds that overall costs to implement full 4G in SSA by 2025 would stand at US$14billion; and, conditional on that, an operable 5G by 2040 would cost an additional US$57billion.
In annual terms, the required capital and operational costs would stand at US$2.5billion (0.04 percent of 2025 SSA GDP) and US$3.9billion (0.03 percent of 2040 SSA GDP) for full 4G and operable 5G, respectively. These roughly translate to 8.4 percent of income per subscriber for 4G connectivity in 2025, and 4.9 percent of income per subscriber for 5G connectivity in 2040.
“We decompose annual overall costs into capital spending and operational spending components: to achieve the full 4G connectivity by 2025, capital expenditure spending would reach approximately US$2.1billion and the accompanying operational expenditure spending would be US$0.4billion.
“Annual costs for 5G connectivity in 2040 would be US$3.3billion and US$0.6billion, respectively, for capital and operational expenditures in SSA. We also report significant heterogeneity in costs to implement 4G and 5G per subscriber income across SSA countries, reflecting largely the differences in current state of play in mobile infrastructure as well as differences in population growth, urbanisation rates, and real GDP growth projections,” the study states.
Alper and Miktus further indicate that along with Artificial Intelligence, the advance of 4G and 5G is regarded as a field of innovation – enabling smarter societies. The introduction of Fifth Generation networks is expected to supercharge wireless speeds, power a surge in the Internet of Things (IoT) and usher-in a new era of technological capacities.
Harnessing the potential of technology and the data economy could help create a sufficient number of jobs for SSA’s booming population, as well as support meeting the UN’s Sustainable Development Goals in Africa – from assisting development and accelerating prosperity to ending poverty.
By supporting advanced protocols, new users, modern devices, and novel applications, expansion of 4G and 5G promises an open platform for information-sharing to anyone and anything, anytime and anywhere.
Empirical evidence suggests that if there is adequate digital infrastructure and a supportive business environment, new forms of business will flourish – providing employment opportunities for the educated as well as the less educated.
At the same time, changes in technology – along with climate change and global economic integration – will have an important bearing on growth and employment. In this light, improving digital connectivity, including its mobile component, is a key policy area to promote job creation and improve growth outcomes
As the demand for capacity and coverage of cellular networks continues to grow, service providers are expected to continue investing in their networks to cater for this uptake and meet evolving consumer requirements. In sub-Saharan Africa, mobile subscriptions will continue to grow over the forecast period, as mobile penetration today, at 84 percent, is less than the global average. LTE is estimated to account for around 15 percent of subscriptions by the end of 2020.
These advances promise delivering high-speed mobile broadband to high population density areas, aimed at the entertainment, video social networking and multimedia communications with higher resolution video channels. This would allow consumers to enjoy high-speed streaming on demand, while also permitting enterprise collaboration services to spread.
Furthermore, there is the enabling of massive machine-to-machine type communications, allowing a vast number of low-power, low-cost device connections with high scalability and increased battery lifetime, driving the evolution of smart cities and Internet of Things. It will ensure relatively cheap and universal connectivity with minimal energy consumption.
Additionally, ultra-reliable and low-latency communications – sometimes referred to as critical machine-type communications – are designed to use the network for mission-critical applications that demand stringent requirements for uninterrupted, robust and timely data exchange
The advanced mobile ecosystem is expected to contribute significantly to economic growth, and bridging the mobile Digital Divide emerges as a key policy priority. Digitalisation is estimated to contribute US$12.3trillion of global economic output by 2035, with the highest progress in sales activity (HIS, 2017). In SSA, mobile technologies and services already generate US$144.1billion, about 8.6 percent of SSA GDP in 2018.
Moreover, the contribution of 5G in Africa is projected to reach US$10.5billion by 2026 from virtually zero currently – with the highest shares expected to materialise in the manufacturing and energy sectors
In addition to contributing to new high-tech employment opportunities, expanding access to 4G and 5G has the potential to revolutionise existing rural jobs – particularly in agriculture. Recent evidence suggests that the arrival of fast Internet in Africa led to increased employment in both high and low skilled occupations.
5G technology can increase agricultural productivity – for instance, by allowing a quicker transfer of data related to weather. Apart from promoting jobs, 5G can improve network connectivity in rural schools, enabling students to achieve more efficient learning (Ovum, 2018), for instance, through the wider access to information and knowledge. Local government services are also expected to be positively affected by better mobile connectivity, akin to positive impact of connectivity on the provision of health care services to rural populations.
Course of Action
The bane of development in the region remains policy implementation, as many countries within the region have policies on their books to rival those anywhere else in the world.
The ongoing pandemic, coupled with advances in technology, has served as a great leveler. Widespread implementation of 4G and 5G cellular networks requires collaboration between the public and private sectors.
With initiatives such as the African Continental Free Trade Area (AfCFTA) opening many opportunities, the onus is on both – particularly the former, to ensure that SSA emerges post-pandemic ahead of the curve.