Telcos in Nigeria, sub-Saharan countries to invest $97bn on CAPEX

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By Alex C

Telecom service providers in Nigeria and other countries in sub-Saharan Africa will invest $97 billion towards Capital Expenditure (CAPEX) over the next seven years (2014 to 2020), against $45 billion over the last six years (2008 to 2013), to expand their networks for improved mobile data service delivery.

3G in sub-Saharan Africa (SSA) will account for more than 50 percent of the total mobile connections by 2020, from 17 percent in June 2014, according to the GSMA. 4G adoption is expected to account for 4 percent of total connections by 2020.

The number of mobile connections is expected to rise to 975 million by 2020, from 608 million in June 2014. GSMA says the number of mobile subscribers in SSA will pass 500 million in 2020, with 49 percent penetration from 329 million in June 2014.

By this point, SSA will have overtaken Europe to become the world’s second-largest mobile market after Asia Pacific. The SSA region includes 46 countries and six largest markets, in order of size, are Nigeria, South Africa, Ethiopia, Kenya, Democratic Republic of Congo and Tanzania, which together account for over half of the region’s mobile subscriber base. Smartphones in SSA will be 525 million by 2020.

Earlier, Ericsson said that mobile data traffic in Sub-Saharan Africa will grow 20-fold between 2013 and 2019, rising from 37,500 terabytes per month in 2013 to 764,000 terabytes per month by 2019. This growth rate is twice the global growth rate over the same period.

By 2020, the mobile industry will contribute $104 billion to economy, representing 6.2 percent of the region’s projected GDP against from $75 billion or 5.4 percent in 2013. Mobile operators contributed $27 billion or 1.9 percent of GDP in 2013. In 2013, there were almost 150 million individuals using mobile devices to access the internet across the region, over 60 percent of which were doing so via 2G devices.

The mobile internet penetration rate in Sub-Saharan Africa will increase to 37 percent by 2020, with an additional 240 million people becoming mobile internet users over the period. Meanwhile, Frost & Sullivan found a disparity between fixed and mobile communication penetration rates across Africa.

While mobile communications captured 96.4 percent of the subscriber market share in 2013, fixed communications held 3.6 percent. Lack of innovation by state-run telecoms and inadequate funds to support fixed line telecom infrastructure growth hampered the market.

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