Mobile operators in many African countries have reached saturation point, and are now expanding to offer alternative services to drive revenue.
This is according to Nik Willetts, senior VP of non-profit organisation TM Forum, who spoke at yesterday's TM Forum Management World Africa conference, in Sandton.
“African mobile operators are now providing alternative services that are traditionally not in their business models. Africa is moving from being perceived as being behind the rest of the world, to leapfrogging and leading in innovation,” explains Willetts.
He says that where mobile operators are the most successful and innovative is where they provide services such as mobile payments that enable people to run their businesses more effectively, particularly in regions where infrastructure, such as banking and electricity, is lacking.
For example, Willetts says Kenyan operator, Safaricom is expanding into other countries, and evolving its services to include insurance. He points out that many telco service providers are entering the financial services sector in order to stay competitive.
According to Willetts, mobile operators need to look beyond growth in a saturated market, and rather look to alternative business opportunities. “Mobile payments and money transfer applications are growing at a rate of 200% in Africa. We are also seeing the cost of smartphones decreasing; this will result in consumers spending more on data.”
healthcare, education, and people can send money home to their families using a mobile phone, and we see this having a knock-on humanitarian effect.”
Willetts says the challenge for mobile operators in Africa is to think more strategically. These telcos will need to start providing managed services in order to be competitive, he adds.
According to TM Forum's latest Africa Insights report, by mid-2011, the total cellular penetration for Africa as a whole was well over 50%, which translates into 600 million people. Countries such as SA, Seychelles, Reunion, Morocco, Algeria, Tunisia and Libya have a penetration close to, or over, 100%.
Kerem Arsal, Pyramid Research analyst for Africa and Middle East, says in the report that through 2016, there will be a compound annual growth rate of 3% for 2.5G phones, and around 20% for 3G smartphones. And by 2016, there will be an equal split between 2.5G and 3G phones, reaching around 120 million units each in Africa.
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