Africa Telecommunications Market #1 Overview

We are writing in Substack but does not harm to also share here: https://muratgursu.substack.com/p/blog-series-africa-telecommunications

Figure 1: Leading CSPs in Africa

In the changing world of global communication, Africa stands out as a promising frontier for infrastructure investment. The telecommunications industry in Africa is growing significantly. Both private and public investments have been made in Africa’s telecommunications sector. Both domestic and foreign investors have made private investments [1] [2]. For instance, in Nigeria, over $70 billion has been invested since 2001, according to The Premium Times [3]. One instance of a foreign venture is Huawei from China, which has been dominating Africa’s telecommunications sector as it provides infrastructure and services to many African nations [2]. These investments are boosting Africa’s connection and economic growth. They also provide important infrastructure for both companies and individuals.

This analysis looks into the current African telecommunication market size, growth trends, leading communications service providers (CSPs), and the forecast for the progression from 4G to 6G. Besides, the analysis also examines other wireless technologies gaining popularity in Africa and the investment.

Current Africa Market Size and Growth

Figure 2: Africa Entertainment and Telecommunication Market size [4]

Africa’s telecommunication industry is changing rapidly, with the market worth about $63.17 billion in 2024 and reaching more than $82.34 billion by 2029, growing at a rate of 5.44% each year [4]. This growth is closely linked to Africa’s young population. A particular case in Nigeria with 60% under 25 years old population, driving a tech-smart customer audience hungry for online connections [5]. Nigeria has a dynamic telecom sector with a market value of $ 9.09 billion in 2024 [6]. MTN Group is a telecommunications giant with a large stake in Nigeria, some strategic partnerships behind it, and investments leading the wave.

Figure 3: Kenya, South Africa, Nigeria Telecommunication Industry Market Size in 2023 (in billion $) (Google Sheets)

Kenya, an East African technological hub, had a market worth about $3.3 billion for the telecommunications industry in 2023. Total telecom service revenue in Kenya was projected to grow at more than 2% CAGR during 2023 [7]. Safaricom is one of the large firms in Kenya’s telecommunication industry and has played a significant role in connecting the nation. Safaricom makes valuable innovations for Kenya’s telecommunication niche, like the M-Pesa mobile payment service [8].

South Africa is a big powerhouse in the African telecom market, with revenue from the communication services market expected to reach US$16.0 billion by 2024 [9]. Vodacom is a big player leading the country’s connectivity efforts. Vodacom’s strategic alliances and partnerships, including collaborations with global telecom giants, are clear evidence of its role in shaping South Africa’s telecommunications world [10].

Economic growth, improved infrastructures, and strong digital advancements have transformed Africa’s telecommunication landscape. In countries such as Ghana and Ethiopia, a growing middle class is increasing the need for modern communication tools. This has led to investments in developing phone service areas. Kenya’s National Optic Fibre Backbone Infrastructure (NOFBI) project is a testament to the telecommunication sector’s growth. NOFBI project aims to increase internet connectivity across the country and improve the delivery of e-government services [11].

Big government plans like Morocco’s “Digital Morocco 2020” show the importance of internet infrastructure in economic development. This forward-thinking method stresses the role of telecommunications in building a knowledge-based economy [12]. M-Pesa in East Africa further illustrates the qualitative advancements and the integration of telecommunications into daily life. This will lead to better connections and progress in the continent, bringing hope for the future.

Leading communications service providers (CSPs) in Africa

Figure 4: Leading CSPs Logos

The telecommunications sector in Africa is significantly influenced by key industry players who have become important to the sector’s development. MTN Group is an international company based in South Africa active all over the continent. MTN has a notable impact in its home country, South Africa, as it is indeed the biggest mobile network operator in this country. MTN has made significant strides in overcoming barriers to mobile internet adoption. It has expanded its broadband coverage, including 4G and 5G, to reach millions of people, with a vision to close the coverage gap in rural and remote areas [13].

Vodacom, working in many African countries, is another key player that provides various telecommunications services. Vodacom has demonstrated its importance in linking communities and helping them grow by connecting their voices, messages, data, and all other services.

Safaricom is now a top telecommunication company in Kenya because of its efficient mobile money service, M-Pesa. Besides providing connectivity, Safaricom is a driver for mobile phone financial transactions. Safaricom has also entered the Ethiopian telecommunication industry. Nigeria is a big part of the African communication field. It has big telecommunication companies such as Airtel and Glo that are among its major service providers. Telecommunications firm Airtel Africa, an affiliate of BhartiAirtel company, has been instrumental in phone and internet connectivity throughout the continent. In the same vein, Glo — a telecommunication company from Nigeria- has been instrumental in creating a connection between people and providing digital services.

These leading CSPs actively contribute to the growth by being creative, making strategic investments, and addressing diverse customers’ needs. They also contribute to helping social-economic growth in the regions of their operations.

Forecast for 4G — 5G — 6G

There is a bright future in Africa for 4G, 5G, and maybe even up to 6G. Many more investments in these technologies are projected in the next few years. 2021 International Telecommunication Union (ITU) statistics showed that 82% of Africa’s population had access to mobile broadband coverage (49% for 4G and 33% for 3G) [14]. By the year 2029, it’s expected that nearly half of all phone connections in Africa will be on a 4G network [15]. 4G will remain a major player in the African telecommunications market.

5G service subscribers are projected to swell quickly at 60% annually by 2029 [16]. This will rise from around 11 million in 2023 to 180 million by 2029. 5G subscriptions in the region are projected to reach about 140 million by the end of 2028. 5G services have already been launched in several key African markets, such as South Africa, Kenya, Zambia, Angola, Nigeria, and Zimbabwe [16].

Even though 5G is still being set up in Africa, there is a lot of research and development in 6G. According to Ericsson’s research, 6G will be a hundred times faster than 5G. 6G is projected to have a higher capacity and lower latency [17]. However, deploying 6G in Africa will require resolving infrastructure and regulatory issues in frequency approval. 8 out of 10 European phone users are getting 5G service. Only around 1 in 10 people with a mobile in Africa will have 5G access by the end of 2027 [18].

Other wireless technologies and a hint for further blogs

Beyond regular cellular networks, Africa is seeing a big change towards other wireless technologies. Each one offers different uses and opportunities as the continent shifts into digital progress. Satellite internet is becoming very important, especially in places like Nigeria. The country has vast rural areas that make it hard to build regular internet infrastructure. Companies such as SpaceX’s Starlink provide fast internet to the most remote places in Africa. Starlink satellite internet service has already connected several African countries, such as Mozambique, Rwanda & Mauritius; it is also planned to connect 19 more African countries by the end of 2024 [19].

Satellite connectivity can bridge the digital divide and provide affordable connectivity solutions in rural and urban areas. Satellite connectivity is the only viable solution in rural areas, given challenging geographic terrains such as mountains, thick forests, and large water bodies. In addition, the rollout of terrestrial connectivity (fiber optic cables, telecom towers, microwave backhaul, etc.) involves very high capital and operational expenses and long waiting times to install and maintain [20].

Adopting the LORA protocol (Long-range-low-power) has skyrocketed globally over recent years as organizations from all sectors demand low power longer-range and secure answers to IOT [21]. At the same time, LoRaWAN technology is becoming popular in smart city projects. Cities like Cape Town use LoRaWAN for smart meters, waste management, and environmental monitoring. This shows how flexible it is in improving the cities [22].

The Internet of Things (IoT) is revolutionizing African industries with tailored solutions. Specialized IoT devices offer real-time data on soil conditions and irrigation in agriculture, maximizing resource efficiency and significantly increasing crop yields [23]. This targeted approach aligns with sustainable farming practices. In healthcare, specific instances like wearable health trackers facilitate remote patient monitoring, providing timely intervention and efficient healthcare services in regions with limited access to medical facilities [23].

Many major players in the tower-owning and leasing business in Africa exist. These companies are instrumental in providing the necessary infrastructure for developing the telecom industry in Africa. The total installed base in the Africa Telecom Towers market is likely to rise over the forecast period 2024–2029, from 208.31 Thousand units of installation to register a valuation of up to 261.21 Thousand units at a CAGR of 4.63%. Some of the largest players in the African tower market include IHS Towers (IHS Holdings Ltd), American Tower Corporation, Helios Towers plc, and Eskom Holdings Limited, among others [24].

Improving connectivity and including more citizens in the digital economy is imperative for Africa’s socio-economic transformation. According to the International Finance Corporation (IFC), a 10% increase in mobile internet penetration increases GDP per capita by 2.5%. This means that the digital economy has the potential to contribute USD 180 billion to Africa’s economy by 2025 [25]. Accelerating access to affordable and sustainable connectivity on the African continent will revolutionize how key productive and social sectors perform.

The backbone of Africa’s communication landscape, Terrestrial Television (TTV), is a primary source of information, news, and entertainment for many African homes. The TTV industry of South Africa illustrates its surge and investment in the overall area of telecommunication, where it has a solid market based on key players such as SABC and eTV [26]. The industry uses technologies ranging from analog to Digital Terrestrial Television (DTT), improving signals and enhancing viewer satisfaction. Even though the regulatory framework poses several challenges, it has witnessed significant investment and rollout in recent years; the government is taking steps to increase SABC’s reach, while private stations are now considering modern technology [27]. 4G, 5G, and soon-to-be 6G as emerging technologies integrate within the industry competitiveness, South African TTV remains a leader in technological developments. The continuous transition from analog to DTT is a sign of a dynamic industry and an assurance that South African TTV will remain at the forefront of technological developments.

Conclusion

Africa’s telecommunications industry is rapidly changing, driven by various factors, investments, and innovations. Following more investments and innovations in technologies like 5G and 6G, Africa is prepared to address the digital divide problem. This will use the power of connectedness for inclusive growth and development. With the progression of terrestrial television and mobile phone technologies in Africa, its media sector will become wider and more lively.

Bio

Samuel Ndegwa, an MSc. in Telecommunication Engineering, is a dynamic researcher who studies wireless communications. His passion for learning, combined with his history of adding value to the industry, he shares his ideas through various platforms. You can find Samuel on LinkedIn.

References

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