Increasing connectivity is laying the foundations for the digital economy in Africa; however, several challenges still need to be overcome for the continent to fully leverage the opportunities a connected world enables, a new report by global technology research and advisory firm Ovum shows.

Several factors continue to inhibit the advance of connectivity and development of the digital economy in Africa, including high relative costs, poor infrastructure, skills shortages and delays in allocating spectrum.

Mitigating these will require industry and government to develop a digital economy response plan.

“There will be more than one-billion mobile broadband connections on the continent within a few years, and there are good growth prospects in digital services, as well as in data connectivity,” said Ovum Middle East and Africa regional research practice leader Matthew Reed.

Ovum’s 'Africa Digital Outlook 2019' report suggests focusing on broadband network expansion, as data connectivity remains a significant near-term growth opportunity.

The increase in connectivity in Africa is being driven by mobile broadband, with the number of mobile broadband connections on the continent set to reach 1.08-billion by 2024, according to new forecasts by Ovum.

This represents 78.9% of the 1.37-billion mobile connections on the continent.

“As mobile data is the leading revenue growth area for major operators in Africa, most are expanding the capacity and coverage of their mobile broadband networks to facilitate further growth,” the group notes.

Ovum forecasts that mobile revenues in Africa will rise from $54.31-billion in 2019 to $67.12-billion in 2024, with non-SMS mobile data revenues on the continent more than doubling over that period from $14.91-billion in 2019 to $31.42-billion in 2024.

The number of third-generation (3G) W-CDMA connections in Africa will continue to increase to 2024, contrasting with the global trend, where the number of W-CDMA connections is declining. Further,

3G and, increasingly, long-term evolution (LTE), will power the growth of mobile broadband in Africa for the next few years.

The number of mobile 3G subscriptions on the continent will reach 697.6-million in 2023, Ovum forecasts.

LTE subscriptions will increase at a faster rate than 3G subscriptions, with the number of LTE subscriptions in Africa expected to reach 271.6-million by the end of 2023.

Further, the number of mobile fourth- generation connections in Africa will increase at a more rapid rate, rising from 97.5-million at the end of 2019 to 335.6-million at the end of 2024.

“Ovum expects mobile fifth-generation services to be launched in Africa by 2021, but the number of mobile 5G subscriptions on the continent will initially be small, rising to 5.9-million by end-2023,” it points out.

Although wireline broadband penetration is low in Africa, Ovum expects the number of fibre-to-the-x subscriptions on the continent to grow strongly during the coming few years, from 1.28-million at the end of 2019 to 4.07-million at the end of 2024.