GSMA urges tax cuts on entry-level smartphones to bridge Africa’s 961m usage gap

The GSM Association (GSMA), a body representing mobile network operators and technology companies, has urged African governments to reduce taxes and levies on entry-level smartphones to make devices more affordable for citizens in the continent.

The call comes as about 961 million Africans who live in areas with mobile broadband coverage are unable to use digital services because the cost of smartphones and data remains a challenge.

Caroline Mbugwa, Senior Director, Public Policy, Africa at GSMA, said lowering the cost of basic smartphones would improve digital inclusion, increase access to technologies such as artificial intelligence (AI), and support growth across sectors including education, healthcare and transport.

Mbugwa made the call at the Digital Africa Summit Workshop held on Wednesday in Abuja, where regulators, policymakers and industry stakeholders discussed ways to improve connectivity across Africa.

According to GSMA, about 961 million Africans are covered by mobile broadband networks but are not using the services, mainly because smartphones and data services remain unaffordable.

Mbugwa said limited access to affordable devices could prevent many Africans from benefiting from opportunities created by AI and the digital economy.

“AI is dependent on ensuring that smartphones are available and affordable to all Africans,” she said.

She said while mobile network coverage has expanded across the continent, affordability remains a barrier to digital access.

Mbugwa called on governments to introduce fiscal reforms, including the removal of taxes and levies on low-cost smartphones.

She cited South Africa, where the removal of a 9 percent luxury goods tax on entry-level devices contributed to increased smartphone adoption and reduced dependence on feature phones.

“Affordability is a challenge. Customers are willing to use the service, but the cost of devices remains a barrier,” she said.

Beyond device affordability, GSMA highlighted infrastructure challenges, noting that about 9 percent of Africa’s population remains outside mobile broadband coverage.

The association said expanding networks to rural and remote areas remains difficult because infrastructure deployment in these locations can cost between two and five times more than in urban areas, while generating lower revenue.

To address the challenge, GSMA called for technology-neutral regulations that allow operators to use different technologies, including satellite services, to expand connectivity.

Michaela Angonius, Head of Policy and Regulation at GSMA, said African countries need to update telecom regulations by moving away from technology-specific licensing systems.

She said regulations should allow different connectivity providers, including satellite operators, to compete under similar rules.

“Technology is moving very fast today, and regulations need to keep pace,” Angonius said.

She also urged governments to review the management of Universal Service Funds (USFs), which support connectivity expansion in underserved areas.

According to her, many USF funds remain unused, creating additional costs for telecom operators that can increase prices for consumers.

“When funds are collected but not used, it becomes an extra tax on the industry, and this eventually affects end-user prices,” she said.

Angonius advised regulators to focus less on detailed quality-of-service regulations and prioritise policies that encourage investment, network expansion and digital inclusion.

Earlier, John Omo, Secretary-General of the African Telecommunications Union, said Africa’s mobile sector has contributed significantly to economic growth.

He said mobile technologies and services contributed about $240 billion to Africa’s economy, supported about 13 million jobs and generated $45 billion in revenues.

Omo said the figures show the importance of the telecom sector but noted that measuring digital progress should go beyond network coverage.

According to him, digital inclusion depends on whether people can afford services, access digital platforms, have the skills to use technology, and trust digital systems.

He encouraged African policymakers to use the GSMA’s Digital Africa Index, a tool that measures countries’ digital progress and identifies areas requiring policy reforms.

“The goal should not only be to receive the findings but to examine them, compare them with national realities, and use the information to improve decision-making,” Omo said.

GSMA also announced plans to launch an AI Atlas initiative aimed at incorporating African languages into artificial intelligence systems to improve digital literacy and representation of African languages in AI tools.

The initiative will include Nigerian languages as part of efforts to make AI services more accessible across the continent.