Access to the internet is no longer a luxury; it is a fundamental driver of economic growth, inclusion, and innovation. In Sub-Saharan Africa, only 25% of people use mobile internet despite living in an area with coverage, according to the most recent GSMA State of Mobile Connectivity report.
The challenge to narrowing this usage gap is that the average cost of a smartphone is beyond the reach of many on the African continent. In low- to middle-income countries, entry-level mobile devices typically consume 16% of monthly incomes, rising to 44% for the poorest 40% of the population.
Within our own operating context, the impact of smartphone affordability is evident. Vodacom Group, including Safaricom, services over 200-million customers across the continent, but about half (105.8-million) of our customers on our network do not have a smartphone. Lowering smartphone costs is crucial to bridging Africa’s digital divide and ensuring the benefits of a digital future are accessible to all.
To remedy this, mobile network operators are finding solutions to offer affordable entry-level internet-enabled devices to migrate customers from less functional 2G and 3G handsets and enhance access to connectivity. Tapping into the latest technologies, Vodacom has recently introduced a cloud-based phone, for example, which leverages the power of cloud computing to deliver a range of features typically associated with entry smartphones, but at a more affordable price.
With the device's design, customers who are only familiar with 2G phones and not a touch screen experience can transition comfortably to the world of data and applications.
Device financing models, subsidies, discounts and tailored payment solutions that reduce the upfront cost of purchasing a smartphone can also help shift low-income customers to 4G handsets. Across our markets we have had success with programmes such as Easy2Own, which allows customers in South Africa to pay off a smartphone in daily, weekly and monthly instalments. Partnering with finance providers can expand the reach of these programmes, such as our Buy Now Pay Later offering with 15 finance providers in Egypt, or Pouko Pouko, a collaboration between Vodacom Mozambique and mobile financing platform Onfon, which has enabled 72,000 customers in Mozambique to own a smartphone.
Affordable access to smartphone ownership, and achieving universal connectivity ambitions, are dependent on partnerships across the broader device ecosystem. Working with stakeholders in the private and public sectors can help reduce the cost of smartphones to make it possible for more citizens to access the internet.
In many African countries, mobile phones and components face steep taxes and import duties, which can contribute up to 42% of a handset’s total cost. Governments can help lower the cost of smartphones through sector-specific policies that facilitate the flow of smartphones, especially for entry-level models. Subsidies, reduced taxation and wider access to foreign currency capital in sourcing 4G devices and components from abroad can decrease retail pricing and increase market demand.
Additionally, developing local assembly and production plants can enhance 4G device affordability while creating jobs and boosting local manufacturing industries. Last year, Kenya officially opened its first local device assembly factory with the capacity to produce up to 3-million mobile phone units annually and provide 300 to 500 direct jobs — achievable through government collaboration with mobile operators Safaricom, Jamii Telecom and Chinese manufacturer Shenzhen TeleOne Technology.
Affordable access to smartphone ownership, and achieving universal connectivity ambitions, are dependent on partnerships across the broader device ecosystem
Device manufacturers and other technology industry players play an important role in working with government and mobile network operators to reduce smartphone prices and encourage adoption. In Egypt, we partnered with Samsung Electronics to introduce a locally assembled entry-level 4G smartphone that is fully compatible with our high-speed 4G network, and available through device financing. By supporting operator subsidy and financing schemes over-the-top service (OTT) providers such as Google and Facebook and supranational entities can benefit from a larger African market share.
A growing market for second-hand and refurbished smartphones in Africa provides another viable solution for boosting smartphone access. Through public-private sector partnerships, certification programmes can guarantee the quality and safety of pre-owned, refurbished smartphones, giving consumers confidence in their purchases. Vodacom’s Good as New initiative aims to drive smartphone penetration and reduce e-waste by providing certified pre-owned smartphones at an affordable price.
Although lowering smartphone prices is a vital component in expanding connectivity in Africa, it is just one piece of the puzzle. We must also address other barriers to an inclusive digital future, from data affordability and rural network coverage, to providing digital literacy training, so that smartphone users make the most of their devices. In this regard, public-private partnerships and industry-body coalitions with non-government organisations will ensure that investment in connectivity and affordable devices go hand-in-hand.
Ensuring widespread smartphone access will empower millions of Africans to participate in the digital economy, unlocking transformative opportunities. This depends on a unified effort to accelerate smartphone affordability, which will help build a more inclusive, equitable, and prosperous continent.
• Joosub is CEO of Vodacom Group
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