TELCOS across Africa are
increasingly focusing on
effectively maximizing their
return on investment from
data and on monetizing
emerging opportunities such
as the Internet of Things (IoT)
to remain competitive and
afloat, according to George
Kalebaila, research director for
telecommunications, media,
and IoT at International Data
Corporation (IDC).
This is due to increasing levels
of competition that is forcing
them to seek new methods
to stem the steady decline of
traditional voice services.
“We expect to see greater
market consolidation as telcos
increase their efforts to acquire
smaller ISPs in response to
the challenging marketing
conditions,” says Kalebaila.
“Particularly in West
Africa, this is being driven by
heightened market saturation,
declining average revenues
per user (ARPUs), increasing
operating expenditure, and
diminishing profit margins on
services.
As such, IDC expects some
consolidation within the market,
especially between local ISPs
that possess 4G LTE frequencies
and fibre-to-the-x (FTTX)
infrastructure and multinational
telcos with solid financial
support.”
In markets where 4G adoption
is already gaining traction,
discussions around fifthgeneration
network technology
(5G) will take center stage,
creating awareness and bringing
the possibilities and expectations
of future data networks to the
forefront.
“IDC expects vendors to
focus on the higher bandwidth
5G offers and the technology’s
potential ability to support
emerging services such as IoT,
seamless video on demand or
IPTV, drone video recording, smart
city solutions, and virtual reality
applications,” says Kalebaila.
“We also expect 5G to deliver
gigabit connections that enable
the seamless delivery of rich
multimedia services and
applications.”
As competition continues to
increase in Africa’s more mature
telecom and IT markets, the need
to attract and retain customers
through differentiation has
become imperative. This means
that telcos must move beyond
traditional connectivity offerings
and provide IT services such
as unified communications
and collaboration, cloud, and
datacenter services.
“In the medium to long term,
telcos will be forced to re-evaluate
their business models to efficiently
design, develop, and deliver costeffective
solutions and services,”
says Kalebaila.
“This may compel telcos to
migrate from operating legacy networks to deploying agile
systems that are capable of
increasing operational efficiency
while speeding up the time to
market of new solutions. Those
telcos that prioritize technologies
such as network functions
virtualization (NFV) and softwaredefined
networking (SDN) for the
delivery of connectivity, cloud,
and datacenter services will be
well placed to maximize cost
savings, achieve greater efficiency,
and increase productivity.”
In 2017, telcos are also expected
to focus more on 4G monetization
strategies such as enhanced
data offerings, service bundling,
and partnerships with digital
media companies from a content
perspective.
While the deployment of 4G
networks is already gaining
traction across Africa, spectrum
availability, low customer
awareness, low coverage,
high tariffs, and the cost of 4G
smartphone devices remain key
challenges.
“The availability of affordable 4G smartphones is expected to
increase 4G penetration, and those
telcos that are creative in their
offerings and allow customers to
trade in their existing 3G devices
will differentiate themselves from
the competition,” says Kalebaila.
“Rather than focus on extolling
the features of 4G, telcos could
further drive adoption by
introducing innovative data
bundles and transparent prices,
particularly as 4G provides an
opportunity to start transitioning
to a data-centric model and begin
preparations for a voiceless future.”
Open application programming
interfaces (APIs) is expected to
become more commonplace,
enabling the developer ecosystem
to drive innovation and for telcos
to improve partner management.
“Historically, open APIs were
used in traditional telco services
such as USSD and SMS,” says
Kalebaila. “Going forward, we
expect to see remarkable growth
in financial services platforms like
mobile money and breakthrough
emerging technologies like IoT,
in a bid to drive the release of APIs by telcos to the developer
ecosystem. This will allow
telcos to harness innovative and
localized solutions.”
Kalebaila says that telcos that
take concrete steps to transform
themselves internally will be
best positioned to survive digital
disruption.
“The key focus areas in 2017
will include business model
transformation and network
efficiency improvements
using so-called ‘3rd Platform’
technologies, namely cloud,
big data, mobility and social
business,” he says.
Before they can become digital
transformation partners to their
clients, telcos will first need
to harmonize their internal IT
environments with externalfacing
IT systems and become
digital providers to their own
internal business functions.
“By streamlining, optimizing,
and modernizing their own
IT environments, telcos can
leverage the lessons learnt
internally to optimize customer
service and experience to their
external clients,” says Kalebaila.
He adds that telcos need to
identify their key challenges,
prioritize the development of
unique digital transformation
strategies, and implement a
phased approach to digital
transformation.
“For example, Telcos can use
big data technologies to upsell
and cross-sell services, design
new products and services, or
create new revenue generation
streams from existing customer
data assets,” says Kalebaila.
“Understanding and tracking
customer behavior will also
help telcos provide personalized
and optimized offerings to their
subscribers, and therefore help
enhance customer loyalty.”


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