Telecoms investment in Africa fuels economy growth

Mobile user in Africa
Sandeep Ganguly, CEO of U2opia Mobile, says the story of telecoms market in Africa will be about growth and investment.

Informa Telecoms & Media, a technology analyst firm, forecasts that there will be an estimated 1.2 billion mobile subscribers in 2018 in Africa against 778 million mobile subscriptions in June 2013.

Africa’s population is estimated to be 1.6 billion strong, and the bulk of African countries have a very young population, implying more than 40 percent of the population is in the working-age. With a rapidly growing economy, and higher GDP growth year-on-year, Africa has begun its journey towards development. Telecom investment is fuelling overall business in the continent.

The growth in data revenues in Africa is driven by factors including: the continent’s new submarine and terrestrial cables; the rollout of mobile broadband networks; the increasing affordability of data devices; and economic growth. As well as facilitating a rise in data connectivity in Africa, these factors are creating a platform for a range of new digital services on the continent, such as mobile financial services, e-commerce and digital content and services for the business market.

The year of 2016 promises a lot of interesting trends that will decide the way ahead for the telecom and ICT sector in Africa

Governments’ growing influence: The African government has realized the importance of connectivity for the economic growth of the continent. As a reason, the government is taking various measures for the growth ICT in the continent.

The African government is transforming business and government in Africa by driving entrepreneurship, innovation and economic growth. It is also working to develop an Integrated National ICT Policy Framework by 2020.

Rise of e-commerce: As internet penetration and smartphone adoption are increasing, there is huge uptake of e-commerce in Africa continent. As per a recent study by Ispos, around 80 percent of shoppers in Africa go international when purchasing goods online, while, Nigeria is the leading country in the region, with 47 percent of online spending already being taken internationally. This is being followed by South Africa. Both the private sector and government are playing an important role in improving the e-commerce environment.

Content on the rise: Content will play an extremely important role in gaining customers for telcos. As operators occupy an enviable position in this respect, other telecoms provides such as hardware providers, device manufacturers, and OTTs, are all seeking to offer aggregation services. Content will be the king, whether, it is local or foreign, live or recorded

Power of Digitization: As Africa moves towards digitization through the penetration of mobile technology, these technological innovations will balance socio-economic disparities by providing easier access to services, especially in education and health care.

The rise and shine of M-commerce: Mobile Payments in Africa is filling the void for the vast unbanked population of the African sub-continent. As per a statistical analysis released last year by the World Bank, less than a quarter of Africa’s 1.4 billion people have a bank account while approximately 40 percent own a mobile phone.In a case , where smartphone penetration is expect to double in the next 4 years, there is huge opportunity for the growth of mobile payments

Securing Operational Innovation: With data penetration, network reach and investment, it has become very importance for telcos to reach operational efficiency. This has given rise to sharing and outsourcing of resources. Although sharing and outsourcing had been quite been quite common, however, Zain’s acquisition by Bharti Airtel accelerated it. As downsizing operations becomes difficult, operators have started focusing on setting up ABC controls, outsourcing managed networks, site maintenance and security etc.

Despite Africa’s generally good macroeconomic outlook, there are substantial problems on the continent, including some political instability, often-poor infrastructure and the fact that many people have very low incomes. Regulatory matters, such as logjams around spectrum for mobile broadband, also need to be addressed in a number of markets.

Africa is the future of growth, with all other markets on the way to saturation, the whole world has eyes set on Africa, which will be the driving force behind the global economy pretty soon.

By Sandeep Ganguly, CEO of U2opia Mobile