Local mobile network operators (MNOs) will turn to WiFi and LTE networks in 2017 to fight off the threat posed by over-the-top (OTT) applications. This is according to Lehlohonolo Mokenela, Frost & Sullivan industry analyst for ICT Africa, who says this is a response to slowing growth of voice and messaging revenue for telcos in recent years.
He notes the long-held view of WiFi as a rival to operator data services is fading, as operators increasingly turn to the technology to boost indoor coverage.
"Combining it with their cellular networks, particularly in the dark spots of the LTE network coverage, is a natural fit, especially when they are able to monetise the traffic on WiFi networks and improve customer service."
The prediction is part of a report by Frost & Sullivan's ICT team on 'Africa's top tech trends for 2017'.
Mokenela says voice over WiFi (VoWiFi) and voice over LTE (VoLTE) are becoming accepted as the next generation of mobile communications services.
"The packet-based solutions are an improvement on the circuit-switched predecessors - in terms of quality, functionality and cost. These technologies will offer high-definition voice services, faster call connection and a seamless switchover from voice to video."
Mokenela says globally, leading operators like Swisscom are not only launching their own VoLTE and VoWiFi solutions, they are also looking to combine the two. There is also growing evidence that South African operators are building their mobile communication strategies around the technologies, with Cell C and Vodacom launching VoWiFi services in 2015.
"In 2017, the market is expected to witness a lot more focus on VoLTE and VoWiFi by local operators; however, the release of spectrum is central to the development of VoLTE services."
Mokenela adds because of the sensitivity of subscribers to the quality of voice services, operators will be best placed testing the stability of their VoWiFi and VoLTE offerings.
Other trends
Mauritz Venter, research analyst for ICT Africa at Frost & Sullivan, says MNOs are also expected to focus on optimising data-based revenue streams in 2017 by promoting bandwidth-intensive functions - including video-on-demand services.
"This will require an increase in bandwidth-intensive content generation, or acquisition by MNOs and telecommunications firms, and can be expected to act as a differentiating factor, especially as pricing and connection speeds are expected to converge in the market. As a result, we expect a growth trajectory in content-based services like MTN VU," explains Venter.
Meanwhile, operations director for Frost & Sullivan Africa, Hendrik Malan, sees infrastructure issues as a key trend next year. "Telecommunications providers, having already experienced several years of upheaval, are faced with a critical question: what should they do about infrastructure?"
He says this leads to myriad related dilemmas - including whether telcos should continue to invest billions of rands in infrastructure; concerns over legacy deployments; and questions over what level of connectivity is required.
Malan says telecoms operators' responses to these concerns will shape their intended market positioning.
"At the one extreme is the 'dumb pipe' route - labelled as such because it seems simplistic, but it is important to recognise the legitimate opportunities that it brings. At the other extreme is the desire to move away from infrastructure completely and focus solely on the service elements of the market aspects, like customer experience, digital transformation and big data analytics, all of which are enabled by effective connectivity."
He notes African operators often enjoy the benefits of watching market developments unfold elsewhere in the world before having to decide on their own approach; however, the ability of certain industries to leapfrog particular technological developments places local telecoms providers in an unprecedented position.
"It is ultimately up to them to decide how they will move forward in this dynamic landscape," concludes Malan.
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