In Sub-Saharan Africa, around 60% of the population do not use mobile internet despite living in an area with network coverage, as smartphone affordability remains a key barrier to using mobile internet in the region.
According to an Alliance for Affordable Internet report, by the end of 2019, mobile internet adoption stood at just 26% of the population on the continent with nearly 800 million people still unconnected.
This has resulted in a significant challenge to bring and keep individuals and businesses connected. While next-generation technologies like 4G and 5G are gaining massive adoption in regions across the globe, the adoption rate in Sub-Saharan Africa has been progressive but slow due to smartphone affordability challenges.
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This is an area of growing concern, as reducing the internet usage gap is critical to closing the digital divide in the region. Also, the high number of Africans in Sub-Saharan Africa who cannot afford smartphones is a significant barrier to digital inclusion, economic development, and access to information and services.
Certain factors contribute to the smartphone affordability challenge in the Sub-Saharan African region, which includes income disparities, High unemployment rates, rural-Urban divide, and limited access to credit, amongst others.
To help address the issue, operators and manufacturers have devised solutions targeting the cost of mobile devices. In July 2020, Kenyan mobile operator Safaricom announced a smartphone financing scheme in partnership with Google to help accelerate adoption.
The plan dubbed “Lipa Mdogo Mdogo”, which in Swahili means “pay a small amount,” is a pay-as-you-go model that allows low-income customers, many of whom earn a daily wage and can only afford smaller payments regularly, to finance a Google smartphone for a down payment of 1,000 Kenya Shillings (or $9.30) and to pay as little as 20 Kenya Shillings ($0.20) per day until they own the device outright.
As a result of low-cost devices and smartphone financing schemes that help accelerate adoption, Kenya is one of the top three markets in Africa in terms of smartphone connections.
According to the Communications Authority of Kenya, by the end of 2020, total mobile data subscriptions amounted to 43.7 million and data trends suggest this figure could reach 47 million connections by 2025.
Also, just recently, Airtel Africa, one of Africa’s leading providers of prepaid, postpaid mobile, and 4G services has recently launched a 4G smartphone in Rwanda towards bridging the digital divide in the East African country.
Notably, in recent years, the average selling price of smartphones has reduced significantly, with an influx of mobile devices priced at under $100, mainly from Chinese brands such as Tecno, Itel, and Infinix.
Alongside the availability of cheaper options, operators are increasingly partnering with device manufacturers to manage costs and offer financing plans to customers.
For example, European smartphone manufacturers, such as HMD Global, are attempting to grow their presence in Sub-Saharan Africa, as highlighted by recent moves to open assembly plants in the region.
HM Global, which uses the Nokia brand for its devices announced plans to assemble some of its phones in Kenya and to offer financing options for customers who want to buy the devices on credit with M-Kopa.
In March 2023, HMD Global also launched the Nokia G60 5G, a mid-range 5G phone sold in partnership with Safaricom for KES53,000 ($397).
The challenge for manufacturers in Sub-Saharan Africa is to produce devices at a low enough price point to gain market share, particularly in the 5G and 4G markets, where devices remain prohibitively expensive for most regional consumers.
Along with the manufacturing costs, other costs such as fees and taxation directly impact the final selling price. As per GSMA Intelligence research, taxation and duty fees add 10-30% to smartphone costs, depending on the country.
Therefore, to improve smartphone affordability in Sub-Saharan Africa, governments should reconsider these fees by offering tax exemptions on low-cost handsets. In addition to reducing the absolute cost of smartphones and supporting an individual’s capacity to pay, providers also need to ensure that devices meet users’ life needs and support users’ willingness to pay.
It is worth noting that bridging the digital divide in Sub-Saharan Africa by addressing smartphone affordability is crucial for promoting economic development in the region.
Here are some key impacts;
Healthcare Access: Telemedicine and health-related apps on smartphones provide access to healthcare information and remote consultations, improving healthcare access, particularly in rural and underserved areas.
Economic Opportunities: Affordable smartphones copect individuals to online job platforms, e-commerce opportunities, and the digital gig economy. This can lead to job creation and economic empowerment.
Financial Inclusion: Mobile banking and digital financial services accessible through smartphones promote financial inclusion by providing access to banking and payment services for previously unbanked or/underbanked populations.
Digital Inclusion: Affordable smartphones ensure that more people can access the internet, which is a gateway to digital services, information, education, and economic opportunities. This fosters digital inclusion and narrows the digital divide.
In summary, addressing smartphone affordability in Sub-saharan Africa is an essential step toward ensuring that more people in the region can enjoy the benefits of the digital age.