Closing the gap - next step to a digital Africa

08 June 2021

Over the last few years, the world has made huge progress in connecting the unconnected by delivering mobile internet access to millions around the world. In this regard, 2019 was a standout year for achievements. It marked the first year when there were globally more 3G and 4G mobile connections than 2G. It was also a year which saw the coverage gap reduce by half (from 50% to 25%) as 93% of the global population was covered by a mobile broadband signal.

However, despite these significant improvements in global connectivity, when we zoom into the statistics it becomes clear that there is still a lot of work to be done. This fact is especially stark in Sub-Sharan Africa which – according to the GSMA – is home to 67% of the world’s population that is not covered by mobile broadband. Despite huge investments and various initiatives aimed at improving the situation, it is clear that more needs to be done to connect one of the poorest sections of our society. 

The focus of many operators in Sub-Saharan Africa is on upgrading their existing 2G networks to 3G and 4G. From an operator’s perspective, running a 2G network is costly and inefficient. This is especially true when they can re-farm the spectrum for use in their 4G networks, which a number of African countries have passed regulations to allow for. Additionally, by building out 4G networks they also have the opportunity to tap into a new market of millions that currently are not using mobile data, thereby the opportunity to grow their revenues. It is unsurprising that operators have been investing heavily in new and improved infrastructure.

These regional infrastructure investments have had a considerable effect. 3G coverage across Sub-Saharan Africa reaches now 75% compared to 63% in 2017, while 4G nearly doubled over the same period. However, the geography of much of Sub-Saharan Africa remains an impediment to closing the coverage gap. Development of new base stations for example can be a tremendous challenge in sparsely populated, rural and remote areas. Here, technological innovations such as RAN and backhaul have helped to make gains. Countries like Senegal have seen a dramatic transformation in connectivity over the last five years despite having a rural population of around 52%. In 2014, only 56% of Senegal was covered by a 3G network. This reached 95% in 2019 according the GSMA’s Connectivity Index.

Other countries are following this example. In Ghana for instance, the government has announced its intention to connect 2,000 rural communities using open RAN solutions. Whilst encouraging, these developments are not consistent. Early this year, it was announced that Google’s Loon project, a novel idea to connect the populations of remote areas, had collapsed. This came only a matter of months after Kenya had agreed to fast-track approval for the service. It is unknown how much investment those involved lost in this project, but the impact this may have on remote populations could be severe, delaying their access to mobile internet for perhaps, many more years.

Despite these challenges, it cannot be denied that the coverage gap has been decreasing. This however does not solve the problem of connecting the unconnected. Indeed 3.4 billion people who can access mobile coverage still do not use the internet. This is known as the ‘usage gap’ and is arguably a far more complex and difficult problem to solve. In fact, it is getting worse. Across Sub-Saharan Africa, the usage gap increased from 36% in 2014 to 49% in 2019. 

The most obvious explanation for the growing usage gap is devices. The growth in infrastructure has not been accompanied by the necessary proliferation of devices needed to access data services. One answer to this is the development of affordable smartphones – which has been gathering speed in recent years. Internet-enabled devices are now being sold around the world at prices as low as $20. Nigeria for example, now has one of the most affordable handsets in the world, with MTN’s 3G Smart Feature Phone. The cheapest internet-enabled device currently on the market, comes in at around 12% of average monthly wages in the country, down from 42% in 2017. In addition to this, data costs have also declined, leading to an increase in smartphone adoption among adults in the country to 28%.

While this is definitely progress, the full picture is not quite so rosy. Despite the average cost of mobile devices decreasing, it still sits at around 30% of average monthly wages in Sub-Saharan Africa. More shockingly, the median cost of an entry-level smart device still represents 120% of monthly income for the poorest – representing the 20% of the population. In addition, while data prices have been coming down slowly, more than half low- and middle-income countries still fall short of the UN Broadband Commission’s target to make entry-level broadband services less than 2% of monthly income per capita.

Finally, we need to be realistic when it comes to the usability of these cheaper devices. While they are a step in the right direction, their specifications are not the same as what you would expect from even the cheapest mid-tier smartphone on the market. While these smart feature phones offer communities their first experience of mobile internet, all too often the poor user experience does not help to convince them of its importance to their lives. Lower spec devices have slower processing speeds, giving the user an inferior experience. In fact, many African users don’t fully use their monthly data allowance for this reason.  Indeed, the GSMA 2021 trends report points out that “while smartphone penetration has reached 50% on the continent, this overplays its significance as most are running legacy 2G and 3G speeds.” 

As we have discovered, whilst a lot has been done to address the needs of these underserved populations, it is clearly not enough. Many people still lack the devices to access technology services. This potentially jeopardises the investments made in the first place. The question is therefore: how do we get adequate technology into the hands of those who simply cannot afford it?

The answer to this, is a more nuanced and intelligent approach to device financing. We need to encourage operators and retailers to offer smartphones that are affordable, while also ensuring that they do not take on the burden of risk that this entails. Luckily there are ways to solve this. Using advanced security solutions, which give mobile operators and retailers remote access to devices and the ability to lock and control the device to encourage payment, mobile operators have more control in the face of unpaid bills. By giving operators this kind of control, it hugely reduces the risk-profile of a financed device.

The same technology is also able to lock a mobile device completely in the case of fraud, theft or trafficking. When mobile devices are such a lucrative target for these types of crime it is unsurprising that operators and retailers are reluctant to offer high-value commodities at affordable financing deals. However, with the ability to comprehensively shut down a device in the case of criminal activity, they can completely remove its inherent value. The effect of this is a reduction in crime and gives the operators and retailers the confidence to open financing to a whole market of people who were previously priced out.

The solution will not happen overnight, and it will require collaboration between governments, regulators, mobile operators, retailers, technology companies and even NGOs to succeed. However, the quickest route to address the inequalities exposed by the usage gap is to empower those who have the means of access to make these devices widely available to those who cannot afford it. Device financing is a way of making the unaffordable, affordable, with higher cost devices offering a far superior experience and usability whilst increasing access to the internet.