Internet Solutions
Internet Solutions

Africa is rapidly emerging as a player in the digital landscape as its telecoms market matures, driving some interesting developments for service providers to take note of.

The old rules of the African telecoms game will soon be obsolete, and the pace of change is picking up. But there are tremendous opportunities for forward-thinking businesses that can adjust their business models to keep up with Africa’s digitally transforming markets.

Changing priorities

It should come as no surprise that digital transformation is gaining pace in Africa, and telcos cannot allow themselves to be caught napping. This necessitates some profound changes in business models that can extend to an organisation’s core. However, anticipating the future trajectory of Africa’s telecoms landscape correctly can be especially lucrative. Telcos can find their particular sweet spot with insight through sound market research, some innovative thinking and a brave approach to change.

Consolidation is increasing across the telecommunication services industry and this is especially evident with voice. Internationally, the demand for IP voice services is growing while the markets for traditional voice services are experiencing steadily lower margins and a downward curve in the average return per user. Africa shows a somewhat different picture where mobile voice usage is stable – at least for now. Aggressive competition is driving down prices, which is leading to an increased penetration in low-income markets.

Broadband usage is growing

The overarching long-term trend of a maturing mobile market is evident in the statistics provided in We Are Social’s Digital in 2018 report. They show that between January 2017 and January 2018 the number of mobile users increased by 4% to represent 82% of the population, while the number of Internet users rose by 20% to 34% of the population. Mobile penetration rates remain below 50% across much of central Africa with Internet penetration lagging considerably lower, but this picture is changing fast. Some regions such as Benin, Sierra Leone, Niger and Mozambique are experiencing especially rapid digital growth. The numbers of Internet users have more than doubled in one year in these countries.

Facilitating growth

It’s not only new infrastructure that’s making this transformation possible. Infrastructure-sharing is becoming an increasingly popular choice for African telcos with tower-sharing deals becoming the norm, especially in less urbanised areas. Regulatory pressures have played a role in driving that, but tower-sharing deals are also proving to be an attractive option for operators to release value. Some highly innovative, low-cost solutions such as solar-powered base stations, have been emerging to solve the challenges of providing connectivity to rural areas where there’s a lack of stable electricity supply. The rollout of fibre is also facilitating IT maturation in eastern and southern Africa, and the “fibre land grab” is accelerating in these regions.

Africa’s future is getting brighter by the day with the spread of connectivity. The Internet of Things (IoT) is also sure to be a game changer across a wide range of Africa’s industries, from agriculture to manufacturing, but will require varied and affordable connectivity options. The telco landscape will continue to become more competitive as service providers seek to expand and diversify their offerings, but with a geographic region as large and as varied as Africa, there is no single formula for success.

However, you can capitalise on the myriad opportunities in expanding your African footprint by partnering with a telecommunication service provider.

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