The mobile market in Africa, powered by youth, has great potential for investors because of the huge numbers mobile network subscribers, according to a BusinessDay report.

Cell phones today are nearly ubiquitous in African society, the report says. Teens and young adults are obsessed with them, carrying them around everywhere. This is the first generation to have direct access to high tech.

Africa has 650 million mobile users – more than the U.S. or Europe, according to the World Bank and African Development Bank. In some African countries more people have access to a mobile phone than to clean water, a bank account or electricity, the agencies said.

Youth are the main catalyst for this explosive growth, said Sudanese-born billionaire philanthropist Mohamed “Mo” Ibrahim. The former telecommunications tycoon had more than 20 million subscribers in Africa when he sold his company, Celtel, for $3.4 billion in 2005.

Facebook boasted 38 million users in Africa in 2011, prompting giants like Google and Microsoft to take notice. Microsoft launched YouthSpark in February with the aim of bringing one million small and medium-size African enterprises online by absorbing the existing young workforce.

The U.N. defines youth as ages 15 to 24. They are seizing the momentum, rewriting society’s rules and changing the game in Africa.

For many Africans,“the cell phone is their landline, ATM and email in one device. Cell phones are central to life,” said Teresa Clarke, CEO of Africa.com, a news website.

Maybe more importantly, the mobile industry has transcended divides between urban and rural, rich and poor, the report said.

Cheap Chinese phones are readily available for as little as $20. Africa has a history of inflating taxes for mobile consumers and operators, but countries like Kenya recognized that prices could stifle development and removed a 16 percent general sales tax in 2009, increasing mobile phone sales by more than 200 percent, Global Mobile Tax Review reported.

Mobile phone penetration in Africa grew from 1 percent in 2000 to 54 percent in 2012, according to Deloitte’s report, The Sub-Saharan Africa Mobile Observatory.

Youth are the largest group using cell phones and their software apps, said South African Simthandile Mgushelo on his blog Voices of the World. There, 72 percent of 15-24-year-olds have cell phones, according to the U.N. Children’s Fund, UNICEF.

Sixty percent of Africa’s unemployed are young people, the International Labor Organisation reports. Subscribers in sub-Saharan Africa pay an average $5-$8 for monthly cell phone expenses in a region where, by World Bank estimates, most people live on less than $2 a day. People make huge sacrifices to recharge their phones, even skipping meals, the report said.

A nonprofit that uses mobile technology to fight poverty, the Praekelt Foundation found that 95 percent of South African youth use prepaid or pay-as-you-go plans. The remaining 5 percent go on long-term contracts. About 30 million calls are sent daily for “please call me” text messages, a free service tailored for low-income cell phone users. This service evolved from the practice of “beeping” – hanging up after one or two rings to avoid a charge while letting the other party know to call back. Phone users are also buying several SIM cards so they can switch between operators and save on interconnection fees.

Internet prices are coming down and speed is up thanks to fiber-optic submarine cables running along the East African coast, , said J. M. Ledgard in Intelligent Life magazine. These cables connect South Africa, Mozambique, Madagascar, Tanzania, Kenya, Somalia, Djibouti, Sudan and the Comoros. Other fiber-optic cables run along Africa’s West coast.

About 84 million mobile phones in Africa today are Internet-enabled, Ledgard said. He predicts that by 2014, 69 percent of mobiles will have Internet access. In response to the burgeoning demand, markets are transitioning slowly from so-called feature phones with limited data access to low-cost smartphones with access to the Internet.

Many African youth spend a large amount of time on Facebook. Some use text-only versions and pay no data fees, an important feature for people on tight budgets and using prepaid services.

Facebook splits costs with network operators and phone manufacturers. Google is following suit, providing free Internet access and eliminating language barriers by becoming multilingual.

Face-to-face conversations are out, texting is in, the report said. Hangouts are no longer the craze for youth. Texting or SMS (short message service) has overtaken speaking on a mobile phone. Even when young people are physically in the same space, as 19-year-old college student Naomi Kaneza from Rwanda told Africa Renewal, they will secretly text each other. “Often, we’ll SMS something we don’t want to say out loud.” Just a few years ago most people considered this kind of behavior rude; now it’s so frequent, it’s grudgingly tolerated.

Even during social events like weddings, funerals and religious services, it’s typical to see teens and young adults hunched over, thumb and forefinger poised to fly over the tiny keyboard to send a text message. It’s no longer a fad; it’s ingrained in the culture.

Facebook said it had 38 million users in Africa in 2011, prompting Google and Microsoft to take notice. Microsoft launched YouthSpark in February with the goal of bringing one million small and medium-size African enterprises online.

Mobile technology is also putting a dent in Africa’s youth unemployment rate. In urban and rural areas, young people are often the ones managing mobile phone kiosks that sell airtime, make repairs, unlock phones and charge them. Trading of airtime for cash has become a lucrative business in Africa.

In Kenya the economic impact of mobile phones has been huge. In 2011 the industry contributed about $3.6 billion to the country’s gross domestic product, according to the Global Mobile Tax Review and Deloitte. It has also made a significant contribution to employment, with an estimated 280,000 points of sale for mobile services in 2011, including kiosks and dukas, which are phone and electrical-goods stores.

M-Pesa, the mobile phone–based money transfer service launched by Kenya’s mobile network operator Safaricom, is perhaps the most successful and lucrative digital innovation in Africa so far.

Building on that model, young African software developers are seeking solutions to everyday problems. Some are developing software apps, such as Christine Ampaire of Uganda, who made the newspaper East African’s list of Top 20 Young Innovators to Watch. After the success of her app Mafuta Go, which helps users find the nearest gas station with the cheapest prices, she is developing an SMS-based app for taxi motorcycle riders in the capital city, Kampala, whose phones do not have access to the Internet.

These digital innovations are not only in the business sector, but also in agriculture, health and education, like Namibia Polytechnic’s cell phone–based curriculum.

Mobile apps could become a game changer for Africa’s development