The number of mobile subscriptions in Africa is expected to reach 1.02 billion at the end of 2016, despite slow growth in the continent's mobile market, according to the Ovum Africa Market Outlook, presented at AfricaCom in South Africa last week.

Research put the current number of mobile subscriptions as at end-2Q 2016 at 962.29 million, based on a slow increase of 9.91% over the year to end-2014 and by 7.63% over the year to end-2015.

The slow growth is attributed to macroeconomic difficulties and regulatory issues such as SIM registration drives in a number of countries that held back growth in the market in the first half of 2016.

This puts the average rate of mobile penetration in Africa at 80.73% at end-2Q16.

The outlook shows that Nigeria has the largest mobile market in Africa in terms of subscriptions, with 150.22 million mobile subscriptions at end-2Q 2016, up from 147.94 million a year earlier followed by Egypt, South Africa, Algeria, and Morocco.

Though coming down from a peak of 62.81 million at end-2Q15, largely as a result of disconnections made to comply with SIM registration requirements, MTN Nigeria is the largest operator both in Nigeria and on the continent with 58.98 million subscriptions at end-2Q16.

The mobile network operator is followed by Ethiopia's Ethio Telecom (45.99m), Vodafone Egypt (39.04m) and Vodacom South Africa (37.63m). Others are Globacom Nigeria, Orange Egypt and Airtel Nigeria.

The research adds that by the end of 2021, mobile subscriptions on the continent would have reached the 1.33 billion mark of which 3G connections will account for 64.9% and LTE for 11.8%.

This will create a total mobile revenue rise from US$55.55bn in 2015 to US$69.67bn in 2021 at a CAGR of 3.8%, though mobile voice revenue on the continent will decline from US$43.26bn in 2015 to US$36.37bn in 2021.

Non-SMS mobile data revenue is expected to grow strongly from US$6.40bn in 2015 to US$27.56bn in 2021, at a CAGR of 27.6% driven by the rollout of 3G and 4G networks, the increasing affordability of smartphones, and changing customer behavior.

Better broadband

In terms of its broadband development, Africa is the second-lowest ranked region in the world despite the big changes that have taken place in its telecoms market in recent years due to a combination of economic, infrastructure, and regulatory obstacles that continues to hold back progress.

African operators could take advantage of their stronger brands and larger scale in local markets to develop digital services for diversification says Ovum.

The company says there is evidence that digital service strategies are beginning to pay off citing that Mobile Financial Services accounted for about 8% of MTN Group's revenue in the first half of 2016, according to the telco.

To improve broadband, regulators and other authorities could do more to assign spectrum and licenses that would encourage the rollout of mobile broadband and bring Internet access and relevant data services to underserved audiences.