Murray Steyn
Murray Steyn Executive Head: Wholesale

How to ace telecommunication services in Africa. Operators of all sizes in the ICT sector have been playing an important role in Africa’s narrative.

Woman talking on mobile phone

Although telecommunication services are finding that they need to adapt to some shifts in the market, opportunities still abound for them to contribute to connecting the continent in a variety of ways. Local players that understand Africa’s markets better than foreign multinationals can capitalise on their knowledge to collaborate and forge lasting partnerships to offer the most competitive pricing and technological innovation.

Every industry across the continent, from education to agriculture, stands to benefit directly from reliable and affordable Internet access. The rapid advancement of telecommunications in Africa has brought about transformation in many sectors, namely financial services, healthcare and energy. In an optimistic vision of Africa’s future, population growth matches economic growth, with development in ICT acting as the catalyst. However, for this to be possible, foreign investment and home-grown solutions will have to intersect.

Market shifts

The ICT sector stands to gain tremendously from Africa’s development but lately, telcos are facing an increasingly competitive and disruptive business environment. Voice still holds the lion’s share of revenue in Africa, but data revenues are garnering a larger share each year. This is a result of the emergence of more affordable data services and higher-speed data networks which are putting pressure on traditional voice services. OTT services have earned loyal customer bases by providing valuable services at low cost across the infrastructure established by telcos. But for the most part, it’s too late for telcos to start developing their own OTT services to reclaim lost revenue from the likes of Whatsapp.

Revenue diversification and partnerships

So how can telcos and ISPs capitalise on the growing data revolution and remain profitable? More network investment is necessary, with operational restructuring, to drive revenue diversification through a range of data services rather than operating purely as a bit-pipe provider.

There is a growing trend for ISPs to work with experienced partners to outsource certain assets such as network infrastructure or data centres. This allows them to focus on their strengths and areas of expertise, which usually encompasses customer service. This means that even the smallest ISPs can acquire a share of the market and build successful businesses.

Emerging technologies

Emerging technologies that will play a key role in shaping Africa’s future consumer landscape offer up unlimited opportunities. The IoT is a prime example and is the biggest emerging opportunity of all. The falling prices of smart devices is already fuelling market demand in Africa, and that trend will accelerate and expand. Exciting possibilities exist with potential applications, like equipping farmers with data-driven insights to increase their yields and improve efficiency.

Government red tape

Red tape remains a thorny issue in many regions and the risk of policy change in favour of protectionism looms large in many others. Unfortunately, policy-making in Africa is often reactive instead of supportive and has failed to keep up with the rapid evolution of technology. The result is policy that hinders development instead of fostering it. In the long term, these problems can be mitigated with a greater involvement from the private sector through lobbying and investment.

It’s vital to remember that Africa is not a homogenous continent. Thorough market research must be conducgted if an ISP wants to enter a new region. This will aid in the proper understanding of the customers’ expectations of telecommunication services and will help ISPs to position themselves accordingly. However, expanding your African footprint by partnering with an established telecommunications service provider is a winning formula that will yield positive results.