The phenomenon of mobile intertwining with lifestyles opens a world of opportunities for African telecommunication operators to foster profitable innovations.
This is according to Obafemi Banigbe, CTO of Millicom (Tigo) Ghana, one of the country's six competing operators - including Vodafone and MTN.
Speaking at communications industry association TM Forum's Africa Summit, in Sandton this morning, Banigbe said Africa is not only a viable growth opportunity and playing field for telcos, but it is “at the edge of technology”.
With the number of people with mobile phones increasing at a rapid rate and the devices becoming more integral in people's lives, the opportunity for mobile services is rife - albeit in many respects untapped, he noted.
“Mobile is at the centre of consumers' lifestyles and it is beginning to become critical for operators to leverage the opportunities that presents.”
Africa, said Banigbe, is the next growth engine of the world, for a number of reasons. “It represents a lot of untapped opportunities. Africa's infrastructure has long been inadequate for the support of communication and banking - presenting further room for growth - and the level of disposable income is rising.”
Innovating Africa
Banigbe said the biggest challenge is the question of where profitability will come from for mobile operators. “There has been an explosion in data and voice, as well as in infrastructure rollout, and a lot of businesses are growing at double-digit rates. But growth has flattened out. Coupled with this is pressure from over-the-top (OTT) players.”
This is where “finding the next profitable innovation” comes in - “[and] it doesn't have to be big band, innovation can be incremental.”
Four critical pillars for market leadership, said Banigbe, are products and services, brand positioning, market and channel execution, and internal capabilities.
Within these, he noted, are certain considerations unique to the African continent. “Looking at innovation in Africa's telecoms industry - one must consider mass adoption of mobile, the era of prepaid services, and the fact that a lot of people in Africa don't have access to credit.
“Mobile money is also an innovation that can be credited to Africa and it too represents a huge growth opportunity. But mobile money is not for the faint-hearted, it takes effort to build a distribution chain for e-money.”
Another area of opportunity, according to Banigbe, is mobile health. “Mobile operators have all the right competencies to succeed in m-health. M2M connections are expected to be at 2.1 billion over the next decade or so and healthcare is part of that.” He said the majority of connections are likely to be in Africa, due to the state of healthcare.
Partnering for profitability
Amid the myriad of services and opportunities, said Banigbe, operators must also realise they cannot be everything to everybody.
“Partnering is a critical competency that every operator must develop. Service providers need to collaborate for growth, with app and content developers - and even with OTT players and competitors.”
In terms of competition, multi-SIMs present a challenge, but communications service providers need to concentrate on "share of pocket”, he explained.
“The number of SIM connections you have in the market doesn't matter - revenue share does.”
Banigbe pointed to research that shows mobile connections are expected to surpass the human population in 2015. “This will be driven by a multi-SIM market, M2M communication, increasing connections and multiple devices.”
Lastly, he said outsourcing is an avenue operators should consider in keeping up with demand and the call for innovation.
“Innovation needs to contribute to the top line or reduce cost or help you deliver services effectively to consumers. This is where outsourcing can be considered.”
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