Breaking News
Translate

‘African Telcos prioritize new skills to stay afloat’

By Emmanuel Elebeke

TELECOMUNICATION companies 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, the International Data Corporation (IDC) has said.

IDC said this is due to increasing competition which is forcing the telcos 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,” IDC said.

According to research director for telecommunications, media, and IoT at IDC, George Kalebaila.   “This is being driven by heightened market saturation, declining average revenues per user (ARPUs), increasing operating expenditure, and diminishing profit margins on services, particularly in West Africa. As such, IDC said it 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 fifth-generation network technology (5G) will take centre stage, it observed that creating awareness and bringing the possibilities and expectations of future data networks to the forefront would take centre stage.

“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. We also expect 5G to deliver gigabit connections that enable the seamless delivery of rich multimedia services and applications,” said Kalebaila.

As competition continues to increase in Africa’s more mature telecom and IT markets, the IDC report said 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 cost-effective solutions and services. 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,”  Kalebaila said.

Those telcos that prioritize technologies such as network functions virtualization (NFV) and software-defined 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,” Kalebaila explained.

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.

“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,” said IDC.

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 said.

Before they can become digital transformation partners to their clients, he noted that telcos will first need to harmonize their internal IT environments with external-facing IT systems and become digital providers to their own internal business functions.

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.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.