Mobile operators in Africa looks to data for mobile growth

Posted on October 31, 2012 11:17 am

The latest mobile industry data in Africa shows that data traffic growth and increased data prices are becoming the means of arresting revenue decline in a contracting mobile markets especially voice and messaging. It is clear that for mobile telecom operators to focus on data, it is a signal to mobile users in Africa to help them manage the bounded resource. In Sub Saharan Africa, there is movement towards data usage and customers are using less mobile voice and SMS services as compared to last year. Applications like iMessage and WhatsApp have taken African markets by storm and that has significantly eroded the revenues of Telcos across the continent. Such apps have provided users in Africa with rich communications over a data connection and has also allowed customers to forgo SMS use which was their cheapest mode of communication since customers have an economic incentive to use them.Cost saving is the motivating factor.A Telco company executive I spoke to last evening, told me they are looking to fight back the free apps with mobile plans offering unlimited SMS to their subscribers. He indicated that most Telcos are looking at building their own rich communication suites.I have also learned that other operators are also researching on the introduction of shared data plans, which have become popular in western countries. For those who don’t know, a shared data plan allows customers to have a single data allowance spread over multiple network operator devices.

Mobile operators with 4G networks have experienced slow but solid growth in Africa where demand for high-speed data has more than doubled over the last two years. Mobile network companies are actively pushing the highest-level data consumers onto the new network with that segment in most African countries being dominated by corporate and government institutions and latest data shows that most customer satisfaction for 4G is high as compared to 3.5G users. The beauty of mobile operators relocating customers onto 4G is that it will allow more headroom for customers who remain on the 3G networks.Also, new trends seem to emerge across a majority of Africa mobile markets. Although there’s still strong growth in prepaid business, the postpaid contracts are now outstripping it in terms of revenues despite the subscription numbers being a fraction of the total number of subscribers. In my fact finding mission as to why that is the case, I found out that those customers that want rich functionality of smartphones are the majority on postpaid plans.

Apart from investing in 4G,Telecom operators are investing in cloud computing, big data, mobility and business simplification to create value.They are now focusing on profit, to the exclusion of everything else as was the case few years back. That in my opinion would not create long-term value but it’s a matter of, being a mobile network operator in African markets where they have to play in the value chain of providing those services to their customers. There is no doubt in my mind that cloud business will be a game changer for many mobile network operators in Africa.This is because of the growing demand from businesses, consumers, small and medium enterprises. One major thing that remains a bottleneck to most mobile operators growth in Africa is poor customer service and they must start realigning their internal culture, and through big data technologies that could allow them to better understand consumer demands.

Contador Harrison