CAPE TOWN: Africa has become the world's second-largest mobile region, with the number of connections across the continent to rise to 649m in the last three months of 2011.

The new GSMA Africa Mobile Observatory 2011 report reveals that the continent is set to continue its rapid development into 2012, when connections are set to reach 735m.

According to data from the United Nations, Africa's total population stands at just over 1 billion people.

Over the past five years, the African mobile marketplace has been at a rate of almost 20% a year. According to the report, it is also now the continent with the second-highest number of mobile connections, behind Asia but ahead of Latin America.

In comments accompanying the new report, GSMA pointed out that there remains "huge untapped potential" for future mobile growth in Africa, with 36% of people within the continent's 25 biggest markets still currently without mobile access.

Moreover, Nigeria, Africa's most-populous nation, has a mobile penetration rate of 54%, below the regional average.

Peter Lyons, GSMA's director of spectrum policy for the Africa and Middle East regions, said: "The mobile industry in Africa is booming and a catalyst for immense growth, but there is scope for far greater development."

Africa's mobile market depends heavily on pre-paid connections rather than contracts, meaning that customers are more difficult to monetise.

Around 96% of African mobile connections are pre-paid, compared to 52% in Europe. Even in relatively affluent South Africa, pre-paid took a market share of over 80%.

But GSMA argued that next-generation services would become more prominent in Africa over the years to come, with LTE networks accounting for 2.5m connections in South Africa, and 1.1m connections in Nigeria, by 2015.

The report also argued that increased network penetration would lead to greater economic development, pointing out that studies from a variety of sources including the World Bank suggest that every 10% increase in mobile penetration brings GDP growth of 0.81%.

"By working in partnership, mobile operators and African governments can continue the remarkable growth story of the African mobile industry," Lyons added.

"The benefits that mobile services have already brought to hundreds of millions of Africans can be extended to those who have yet to access communication technology."

Data sourced from GSMA; additional content by Warc staff