26 WEDNESDAY 14th NOVEMBER 2012 FEATURE | INFORMA REPORT


Africa Industry Outlook 2013 Survey


T


he Informa Telecoms & Media Af- rica Industry Outlook Survey was conducted online in August and September 2012. The Industry


Survey is intended to gauge perceptions of the outlook for the industry in 2013 and beyond and the potential for new revenue opportunities. Approximately 200 respondents from a


wide range of companies completed many of the questions. About 70 per cent of the respondents are based in Africa; with the 30 per cent of respondents from other regions showing the extent of interest in Africa as an investment opportunity. Within Africa, over three-quarters of respondents were based either in southern or west Africa. It should come as little surprise that South Africa was the best represented market, fol- lowed by Nigeria with Ghana also figuring.


SCOPE OF THE SURVEY The African telecoms market has reached a new phase of maturation. Changes in technology, evolving consumer demands and the growing intensity of competition all necessitate a shift to new CSP business models and more sophisticated customer segmentation. The danger is real: If com- munications service providers (CSPs) do not evolve, they run the risk of failing to capture revenue from the fresh opportu- nities that exist from cloud computing, machine-to-machine (M2M) applications and the connection of enterprise and vertical markets. In vertical sectors such as healthcare, utilities and the public sector, CSPs can provide solutions to enterprises and consumers that increase process ef- ficiency and reduce transactional costs. The transformation that is required by


CSPs to capture new business opportuni- ties means that they must build on their existing capabilities and combine those with a new strategy to unlock new rev- enue. In order to do this, CSPs need to un- derstand their customers better, and offer them services that match their individual needs and preferences, rather than trying to supply the masses with one-size-fits-all infrastructure products. While designing new business models, the CSP must deploy networks with capabilities such as mobil- ity, messaging, location, presence, profile and call-control, and combine these with internet-style services such as social networking, search, advertising, direct marketing and mapping, thereby enabling richer, more compelling and more person- alised services than the pure-play internet players can offer.


In order to test some of these thoughts


with the market, this survey seeks to assess where the industry sees potential growth from Africa.


NEW REVENUE OPPORTUNITIES When asked to rank the importance of a number of themes in terms of revenue- generation potential in the short and long term, mobile broadband is seen as the biggest opportunity. Service in- novation, customer loyalty and network transformation are also important areas for CSPs. It is a sign that the operator commu-


nity understands the need to transform its business in terms of technology, segmentation and business models. Good news indeed for the vendor community, and especially the increasingly crowded operations and business-support-service market. It is interesting to note that LTE, the


enterprise market and cloud services are all seen as longer-term priorities. While Africa’s communications market still re- mains mainly consumer-facing, we expect to see enterprise revenues become increas- ingly important to the business strategies of CSPs. Enterprise mobility will play an important part in the future strategies aimed especially at the SME market; in the case of the region’s more developed mar- kets, the enterprise has already become a key target segment.


LTE: FINDING THE BUSINESS CASE According to respondents, 2013 will be an important year for LTE launches with nearly half answering that LTE will be launched before the end of next year. Interestingly, the number of respondents to this question was relatively low and it is possible that those not answering this question did not have a clear view on launch dates, which would suggest slightly less optimism towards LTE roll- out than suggested. There is guarded support for the busi- ness case for LTE in Africa. Although only four out of ten agree that there is a strong business case for LTE at the moment, two- thirds see a role for LTE as the technology matures and the demand for data contin- ues to grow. But simply looking at the accounting


costs of a network deployment scenario is not enough: Any investment in LTE needs to analyse the cost of losing an opportu- nity by not being able to meet customers’ demands for bandwidth and service qual-


ity. The potential to optimise overall net- work economics is inherent in 4G because of its all-IP architecture, spectral efficiency and bandwidth flexibility. The business case for LTE will become loud and clear if CSPs can improve management of their data traffic, locate new revenue streams and architect a more open environment for OTT applications.


SATELLITE: SOLVING THE BACKHAUL CHALLENGE? Although the findings indicate that satel- lite is not seen as a big revenue opportu- nity by respondents, there is recognition – according to 63 per cent of them – that satellite is and will continue, in the short term at least, to be important for access to rural markets. Backhaul is the single biggest infra-


structure challenge posed to opera- tors trying to expand into rural areas cost effectively – microwave, multihop microwave and satellite all have their place. While economies of scale and competition have brought equipment costs to reasonable levels, leasing satellite capacity is still expensive for operators to consider in large-scale deployments. Moreover, latency for communications is in the order of 500ms which makes voice potentially a major challenge if both ends of the call are using satellite backhaul (latency=~1sec). Despite this 54 per cent of respondents agree that satellite is and will continue to be important for back- haul in Africa.


MOBILE BROADBAND: ENSURING AVAILABILITY FOR ALL Broadband has a significant role to play across African society: It provides small businesses with the opportunity to broaden their customer base and reduce overheads; it can help local farmers and fishermen with information on weather forecasts, sustainable farming tech- niques or pricing; and it can be a vital link in smart electricity grids facilitating locally-generated electricity – including electricity from renewable sources – to be integrated, stored and shared as demand fluctuates. Ubiquitous mobile broadband is a big idea whose time has come. And yet, according to the respondents,


mobile broadband services are expensive and the investment required to launch networks is a constraint to growth. With mobile operators, as the main


providers of internet services in Africa, it is imperative that governments and regu-


lators do all they can to ensure that mobile broadband services are widely available and affordable. Devices and services are still expensive – sometimes prohibitively so – for the poorest in Africa. Terrestrial cabling is under-developed and mobile network coverage is often sparse or non- existent in rural areas.


CLOUD: NOT JUST A COST REDUCER, BUT AN EMPOWERMENT TOOL Seven out of ten of the survey respondents highlighted business applications as the biggest potential cloud-service-revenue generator. Cloud services are not simply about data storage and cost savings; they actually support business agility, especially for the SMEs. To demonstrate this support for agility,


MTN’s Mobile Fleet Management Solution has been designed to meet the needs of South Africa’s third largest sector – logis- tics and transport. The focus of the solu- tion is around business process improve- ment and provides real-time reporting and workflow management, both of which are vital to the mobilised, fast-moving nature of the distribution sector.


CONCLUSIONS The majority of the survey’s respondents see the mobile or converged operator as the type of company best-placed to take advantage from Africa’s new revenue opportunities. Just as interesting a view is the opposite: Not surprisingly, fixed operators are viewed as being the worst- placed, followed by network equipment manufacturers with one in four of our re- spondents agreeing that the likes of NSN, Ericsson and Huawei need to diversify their business. Informa agrees with this sentiment, and these businesses are now changing their approach to market, albeit at a slower pace in Africa. What is interesting is the relatively low


proportion of respondents that are pre- pared to suggest that OTT players, device manufacturers and system integrators can maximise the revenue opportunities that do exist in Africa.


This report was taken from the Informa T&M Industry Outlook 2013. Now celebrat- ing its 11th anniversary, the theme of this year’s event was The Innovation Challenge – Telecoms and Media Innovation Strategies: Customers, Networks, Services.


www.informatandm.com/industry-out- look-2013/


AFRICACOM DAILY 2012 I http://africa.comworldseries.com/


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28