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Mobile growing 'in spite of' government

23 November 2012, 11:38

Cape Town - The mobile industry has been growing in developing countries in spite of, rather than because of government policies, an international industry organisation has said.

"The industry is growing because if you look at the total fixed line connections in Sub-Saharan Africa - 14 million connections and 470 million mobile connections - the only reason we see growth is because there's a huge pent-up demand which the systems and politics and processes over the past 20 years in Sub-Saharan Africa never delivered," Peter Lyons GSMA director for spectrum policy in Africa and the Middle East told News24.

He said that a breakdown of government and financial services in many African countries has seen the high adoption rates of mobile technology as people attempted to become economically active.

"The growth has been because of the complete lack of pre-existing communications, banking health. That's what's driving the growth; it's not enlightened regulation or policy."

According to Informa Telecoms & Media the Africa's mobile subscriptions will exceed 750 million 2012, and reach one billion before the end of 2015.


The GSMA said that from 2000 to 2012, there was a 44% average annual mobile growth in Sub-Saharan Africa, compared to 34% in the developing world, and 10% in the developed markets.

The World Bank estimates that for every for every 10% increase in mobile penetration, there is a corresponding 0.8% increase in GDP.

"In South Africa especially, I think that what will wake up the government will be the economic realities - what they're facing in terms of jobs and the ability to create the kind of jobs that they want," said Lyons.

According to the GSMA report on the state of the mobile industry in Sub-Saharan Africa, high taxation threatens the growth of mobile in the region.

Many governments eye the mobile industry as an easy revenue stream in struggling economies.

"I think this is a fundamental misconception among governments in the region, specifically in Sub-Saharan Africa, where tax as a percentage of total cost of mobile ownership is the highest in the world," said Lyons.

According to Lyons, political meddling hampers the growth of the industry and it is critical that a short term political agenda does not dictate long-term policy.

"What you need is a policy maker that is above politics and a regulator that is independent and is tasked with executing the policy from the policy maker. When you have too much political influence on those levels, you end up with very distorted short-term agendas."

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