A report released by TA Telecom, has suggested that 2014 will be a key time for investment and innovation in the African telecoms market as the continent begins to change dramatically
The report, Serving Communities on the Cusp of Change, provides insight for mobile operators looking to succeed in the African market, including opportunities around the proliferation of low-cost smartphones, improved 3G coverage and SMS as a medium for agnostic content delivery.
Set to coincide with the 21st anniversary of the text message, the report highlights how service providers are now facing challenges in the African telecoms market that were previously only prevalent in more developed regions. These challenges include new devices like low-cost smartphones, over-the-top technologies and the negative perception of messaging services by a new generation of users.
It outlines current market growth and highlights how cellphone penetration is currently more than 80 per cent. Despite these rapidly increasing mobile adoption rates, however, certain challenges are severely affecting the profitability of the telecoms market in Africa meaning global Average Revenue Per User (ARPU) for operators has fallen more than 80 per cent since 2001.
Serving Communities on the Cusp of Change details how the majority of connections in Africa (62.7 per cent) are still basic 2G voice and SMS service. These findings emphasise that, despite the fact Microsoft and Huawei launched their 4Afrika smartphone in February 2013, there still needs to be a strategic focus on SMS infotainment subscription services. Based on TA Telecom’s research, it is these traditional and mainstream subscription services that are key to retaining ARPU and increasing subscriber rate.
Amr Shady, CEO and founder of TA Telecom, said, "It isn’t just technological advancement and shifts in business practices that make doing business in Africa such a challenge. Our report highlights how the consumer’s gender, religion, political views and news consumption have a powerful effect on the shape of the African market.
"We wanted to emphasise the need for service operators to innovate and use technology to increase their earnings and market position. The report attempts to help African operators and investors from around the world understand how the market works and where they can fit in," Shady added. "It is important that operators don’t forget that despite the rise of the smartphone in Africa, SMS should still be core to any infotainment subscription service."
The report concludes by explaining how, as budget smartphones become increasingly available in the African market, mobile service providers need to be able to act as catalysts for the communities that they serve, offering better and richer customer experiences. While mobile service providers may already have deep insights into their customer usage patterns, they may lack the tools to track, report and analyse these in a quantitatively disciplined way.
