Cellphones to continue as driver of SA growth - study

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Johannesburg - The increase in cellular subscriptions over the decade to 2020 is expected to account for $241 (about R2 510) per capita of South Africa’s projected economic growth, according to research published this week by Vodacom’s parent company, Vodafone.

“Mobile will continue to be a powerful driver” of gross domestic product (GDP) growth in South Africa, “but at a slower rate into the future as we hit saturation in mobile penetration”, Julia Manske, a fellow at the Vodafone Institute for Society and Communications, said after the presentation of the research this week.

In 2010 to 2012, growth in cellphone subscriptions was estimated to have contributed 11 percent of the projected GDP per capita growth. This contribution to growth would slow to 3.6 percent over the three years to 2015 and to 2.4 percent over the five years to 2020.

The study was conducted by the Cologne Institute for Economic Research and was commissioned by the Vodafone Institute. Ten developed and developing countries in Europe, Asia and Africa were selected for the research.

South Africa was the only African country whose cellphone adoption was similar to the growth pattern in Europe, the study found.

In Germany, for example, cellphone subscriptions accounted for $742 of the projected GDP per capita growth between 2010 and 2020.

Experts who were interviewed for the study estimated that by 2020 South Africa would have 165 cellular subscriptions per 100 inhabitants. This included prepaid connections and contract subscriptions. It is the highest figure among the African countries included in the research sample.

Statistically, every South African had a cellular subscription in 2010 as subscriptions recorded reached 100 for every 100 inhabitants. This is due to some subscribers having more than one SIM card.

However, broadband penetration remains low because of high costs and poor infrastructure. Many people connect to the internet using mobile devices and this is forecast to continue because of high investments in cellular network infrastructure.

In 2010, only one in 100 inhabitants, less than 2 percent of the population, used fixed-line broadband, over high bandwidth digital subscriber line, or DSL, connections.

Indra de Lanerolle, a researcher at Wits University, said mobile network operators should consider sachet economics to grow data usage. This is the practice of selling products in single-use packages, which are more affordable for poorer communities.

In comparison to South Africa, cellular subscriptions in Kenya will contribute $28 of the projected GDP per capita growth between 2010 and 2020. The latter is expected to have 89 cellular subscriptions per 100 inhabitants by 2020, from 62 per 100 inhabitants three years ago.

The contribution of cellular subscriptions to GDP growth in India and China will be lower than South Africa by 2020. The three countries are all members of the Brics bloc.

India is projected to have 103 subscriptions per 100 inhabitants by 2020 from 61 in 2010. The increase in cellular subscriptions will contribute $51 of the projected GDP per capita growth between 2010 and 2020.

China is expected to record 109 subscriptions per 100 inhabitants by 2020 and the increase in cellular subscriptions will account for $131 of the projected GDP per capita growth over the same period. - Business Report


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