A big myth about connectivity in the developing world, busted

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Almost everyone on earth has a mobile phone, if you believe the mobile industry’s data on active mobile connections. Just take a look at the numbers for “mobile penetration” from GSM Association (GSMA), a trade group for mobile operators:


The numbers map well onto figures released by the International Telecommunications Union, a United Nations agency. But just because numbers are widely cited, doesn’t make them right. Mobile penetration numbers simply count the number of active mobile subscriptions, which, as the GSMA points out, do not reveal the full story. In fact, the number of people with mobile phones is much lower than subscription rates would imply.

In the developed world (which GSMA defines as North America, Europe, Japan, Australia and New Zealand), the number of unique subscribers has stagnated over the past few years, even as the number of connections has continued to grow.


And in the developing world, subscribers have continued to grow steadily, but nowhere near as explosively as the number of active connections.


Indeed, those who do have pre-paid or post-paid subscriptions in the poor world are more likely to have multiple connections than their rich world counterparts—1.90 connections per person to the developed world’s 1.53. That’s because people in poorer countries tend to use several SIM cards in order to take advantage of different rates for services on different networks.

It’s important to make the distinction between subscribers and connections to properly understand the spread of mobile—essential both for sizing market opportunity and for encouraging development. “The industry is not reporting unique subscribers,” says Joss Gillet of GSMA Intelligence, the GSMA’s research arm. “Operators and regulators worldwide report connections which they call ‘subscribers’, but they are referring to SIM connections rather than people, which explains why reported market penetration continues to expand above the 100% threshold.”

GSMA Intelligence calculated the number of unique subscribers based on surveys, and took into account the fact that people share phones, and that some SIM subscriptions are for internet or TV dongles or for tablets: “Dividing total connections by phone ownership alone would therefore result in an inaccurate measure,” the Association says.

In India, for instance, our survey found that the number of phones per respondent (1.62) is lower than the number of SIM cards per respondent (1.88), which supports the fact that consumers in emerging markets tend to own more SIM cards than phones. In contrast, there is almost a 1:1 relationship between phone ownership and SIM ownership in developed markets.

By this measure, less than half the poor world is connected to a mobile phone, let alone the internet. Despite the optimism surrounding internet connectivity, mobile broadband can’t become ubiquitous until the rest of the world is at least on mobile.

Correction: An earlier version of this post included Russia in GSMA’s definition of “developed nations.” It is actually classified by GSMA as a developing nation. Apologies.