African Mobile Broadband Use Declines Due to Smartphone Costs
The GSMA reports that around 961 million Africans who rely on mobile broadband networks are disengaging from these services primarily because of affordability challenges, particularly the steep prices associated with smartphones.
This concern was highlighted during the Digital Africa Summit, which the GSMA organized in collaboration with the African Telecommunications Union (ATU). The summit convened regulators, policymakers, and industry leaders to explore strategies aimed at enhancing connectivity and driving digital transformation across the continent.
At the gathering, Caroline Mbugwa, Senior Director of Public Policy and Communications at GSMA Africa, emphasized that affordable smartphones and dependable connectivity are crucial for unlocking the potential of artificial intelligence across various sectors, including healthcare, education, transportation, and commerce.
Despite significant expansion in mobile broadband coverage throughout Africa, Mbugwa pointed out that many individuals remain unable to access digital services simply because they cannot afford a smartphone.
She advocated for urgent fiscal reforms, such as eliminating taxes on entry-level devices, to make smartphones more accessible for low-income individuals. Mbugwa noted that South Africa’s recent decision to remove the 9% luxury tax on entry-level smartphones has spurred the adoption of smart devices and decreased reliance on basic feature phones.
Mbugwa introduced the concept of transitioning into what she termed the Age of Intelligence, which necessitates robust infrastructure and connectivity to foster growth in artificial intelligence across the continent. She warned that the existence of 961 million Africans covered by mobile broadband but not utilizing it represents a critical “usage gap” that must be addressed to prevent stagnation in AI adoption.
Policy Reforms Essential for Digital Expansion
Michaela Angonius, the head of GSMA’s global policy and regulation team, echoed calls for African nations to implement policy reforms aimed at boosting investment, enhancing connectivity, and mitigating barriers to digital access. Angonius, who oversees global regulatory frameworks in areas like fiscal policy and network deployment, cautioned against a standardized approach to reforms across diverse nations on the continent.
According to the findings from the Digital Africa Index, while some countries, like South Africa, have made notable progress, others require more profound regulatory reforms to enhance their digital ecosystems. She outlined three focal points for improvement: modernizing the licensing framework, optimizing the use of Universal Service Fund (USF) resources, and evolving service quality regulations.
Many African countries still engage in technology-specific licensing practices that struggle to keep pace with the rapid evolution of digital technologies. Angonius advocated for a flexible licensing framework that accommodates various telecommunications providers, including mobile network operators, satellite carriers, and internet service providers, under a unified regulatory structure. This approach aims to address the challenges posed by new technologies.
Universal Service Fund Challenges and Recommendations
Angonius further highlighted that the presence of unused funds in many countries creates an unnecessary tax burden on carriers, which ultimately inflates costs for consumers. She warned that these additional expenses could intensify the existing digital divide at a time when affordability and connectivity remain pressing issues across Africa.
GSMA executives emphasized the need for reviewing regulations surrounding service quality, stating that countries with superior digital service quality are not necessarily those with the most elaborate regulatory frameworks. They suggested that governments should prioritize policies that encourage investment, enhance coverage in underserved areas, and improve access for marginalized populations.
In tandem with these recommendations, Angonius urged finance ministers throughout Africa to eliminate taxes on entry-level smartphones to make ownership of these devices more affordable. She stated that countries achieving the best service quality focus more on creating conducive investment climates rather than merely having complex service regulation.
Angonius identified the removal of taxes on mobile phones as a critical step. If a finance minister cannot eliminate such taxes entirely, they should at least consider exempting entry-level mobile phones to support everyday users. She noted that Nigeria and other African nations stand to gain significantly from reforms that enhance investment, align with societal needs, and ensure that consumers derive long-term value from ongoing digital transformation.
