Rising smartphone taxes, data costs threaten $300bn opportunity

High taxes on smartphones, elevated spectrum fees, and persistently costly data services are preventing millions of Africans from accessing mobile internet, even in areas with robust broadband coverage, according to the GSMA’s State of Mobile Internet Connectivity 2025 Report.

These barriers could stifle a projected $300 billion GDP boost by 2030, as universal mobile internet adoption unlocks gains in agriculture, education, healthcare, and e-commerce across the continent.

The report marks a pivotal shift in Africa’s connectivity landscape: the usage gap, where people live in covered areas but cannot afford to connect, now overshadows the coverage gap. Mobile broadband now reaches 61 percent of Africa’s population, a leap from 40 percent a decade ago, per GSMA Intelligence.

Yet, 58 percent of unconnected Africans reside within these network zones. Globally, 39 percent of individuals are covered offline, with Sub-Saharan Africa bearing the brunt due to affordability hurdles. In total, 960 million Africans, representing 64 percent of the population, remain non-users despite available coverage, the report states.

Sector-specific taxation and steep spectrum prices exacerbate the crisis, inflating device and service costs while curbing operator investments.

Recent statistics underscore the severity: the average selling price (ASP) for entry-level smartphones in Africa rose 57 percent from $70 in 2023 to $110 in 2024, according to a Trustonic report released in March 2025.

In the sub-$100 segment, which saw a 38 percent surge in sales during Q2 2025 per Counterpoint Research, devices remain the entry point for first-time users but are increasingly out of reach.

For instance, in Nigeria, entry-level models such as the Samsung Galaxy A15 retail between n130,000 and N200,000 (approximately $80 to $120), driven by import duties and economic volatility.

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GSMA data further reveals that a basic internet-enabled device costs 87 percent of the average monthly income for the poorest 20 percent in sub-Saharan Africa, while entry-level smartphones can consume up to 73 percent of a poor adult’s monthly earnings, as highlighted in a July 2025 World Bank analysis.

Data affordability presents an equally daunting challenge. The median cost of 1GB of mobile data in low- and middle-income countries fell slightly to $3.7 in 2024, from $4.2 in 2020, yet in Sub-Saharan Africa, it often exceeds seven percent of monthly income, far above the UN’s 2 percent affordability target. For the poorest 40 percent in the region, 1GB jumped to five percent of monthly income in recent years, per the World Bank.

Across Africa, the average cost of 1GB stands at 5.7 percent of monthly income, with variations like Nigeria’s relatively low $0.39 per GB still burdensome for low earners. Mobile broadband prices have declined from 7.3 percent of gross national income (GNI) per capita in 2018 to 3.9 percent in 2024, but this progress is uneven and insufficient to drive mass adoption.

The economic stakes are massive. Achieving universal connectivity could inject $300 billion into Africa’s GDP by 2030, fuelling 1.5 percent to two percent annual growth. Yet, without reforms, the report cautions that the windfall will evaporate.

“Smartphone affordability is the single largest barrier to mobile internet adoption in Sub-Saharan Africa,” the GSMA emphasises, noting that a $40 handset could onboard 20 million more users, while a $30 device might connect 50 million. The report also points to gender disparities: entry-level handsets represent 23 percent of women’s monthly income versus 12 percent for men, widening the digital gender gap.

Satellite innovations offer partial relief for coverage in remote zones. Starlink’s direct-to-consumer services now span 18 African countries as of mid-2025, including Burundi, Niger, Lesotho, Chad, and the Democratic Republic of Congo. Partnerships such as Orange’s multi-year alliance with Eutelsat deliver up to 100 Mbps in Côte d’Ivoire, Senegal, and DRC, targeting isolated consumers and enterprises. Airtel Africa’s collaboration with Starlink integrates satellite with terrestrial infrastructure for underserved areas.

Emerging direct-to-device (D2D) technology holds promise, allowing standard smartphones to link via satellite in uncovered spots, the four percent of the global population still offline. D2D enhances resilience for the 57 percent already connected, but its success hinges on regulatory allowances for spectrum sharing and affordable chipsets. Satellite bands, however, often require specialized handsets, further straining budgets in cost-conscious markets.

Coverage expansion alone proves insufficient, as the report stresses that high device fees, subscriptions, and barriers such as taxation suppress demand. Low digital literacy and limited local content compound issues, but affordability reigns supreme.

In response, the GSMA launched the Handset Affordability Coalition at Mobile World Congress Africa 2025 in Kigali, partnering with operators to propose $30 to $40 entry-level 4G smartphones with baseline specs for RAM, memory, battery, and display.

Karl Toriola, MTN Nigeria CEO, has been vocal about the issue, stating in January 2024 that “the cost of mobile phones is the biggest hindrance to digital inclusion in Nigeria.” He added that the focus isn’t on profitability but the industry’s sustainability, while calling for tariff predictability and tax transparency to spur investment amid 71 percent of Nigerians struggling with internet costs.

Toriola also urged AfCFTA implementation to boost trade and reduce device costs through standardised customs and digital commerce security.

Tom Greenwood, CEO Helios Towers, predicted in September 2025 that data consumption would quintuple over five years, but affordability must improve to harness this data boom.

The GSMA advocates holistic reforms, recommending slash device levies, auction spectrum affordably, and stimulate demand via skills programs. It warned that, “Without action, satellites and networks will falter, deepening divides.”