Telco race is on

By Alex Kayle, Senior portals journalist

Johannesburg, 14 Apr 2009

The East Africa telecommunications sector is growing at a fierce pace, as the competitive battleground becomes flatter and telcos unleash price wars. This is according to Rodney Sands, director of product marketing with Oracle Communications, who points out that there's a need for telcos to look at fixed-mobile convergence and Opex reduction.

“We're seeing the likes of Orange Telecom and Telkom Kenya, both France Telecom affiliates openly talking about converging their services and consolidating systems; this is a growing trend across the continent,” says Sands.

Telcos can no longer competitively survive in the market by simply slashing tariffs alone, he says. They need to focus on operational excellence, innovation and rapid value-added service delivery. He notes the continent is seeing a greater focus on infrastructure consolidation and sharing to keep up with the huge subscriber growth rate and demand for transparent inexpensive roaming.

Massive mobile

The uptake of mobile banking and payment systems is vast, says Sands. “M-banking and m-commerce play a huge role in Africa, as we're seeing a trend of increased monetisation and use of mobile telephony for m-banking and m-payment-based valued-added services.”

Africa, as a developing economy, has more un-banked communities than banked, and mobile payment solutions are seeing a high adoption rate, he notes. “The rural communities gain access to mobile banking through the mobile handset, and this is opening up retail and commerce opportunities for all.

“Increasingly, another high growth trend is the uptake of mobile broadband data. Mobile broadband data is forecast to have the highest growth rate of any telephony segment, and we're seeing more and more value-added services are focusing on the foundation of having broadband mobile access.”

This has economic, educational and health implications for the continent, says Sands. “Mobile telephony is no longer just a voice communications tool, but it is also a tool that can empower the people of Africa. Whether it is in the rural or urban setting, people want to have access to a wealth of information across all demographics, and the operators are looking to package valuable life, not just lifestyle, altering services.”

Oracle sees the African telecom market as a key growth area, according to Sands. The company will aggressively drive its presence into the continent beyond its existing customers, such as MTN, Safaricom, Telkom SA, Orascom, Vodacom, Atheeb, Zain and Orange Telecom. It aims to increase its customer base this year, despite the global economic crisis.