The next Apple or Google may be found among African telecommunications providers — if they take advantage of mobile applications and services where their Western counterparts haven’t.
Grant Brewer, partner at Ernst & Young, says African operators have the advantage of being able to monitor how the data traffic boom in international markets could affect their operations when Internet access becomes more prevalent on the continent.
In countries such as the US and Europe, telecoms players didn’t expect the boom in data traffic on their networks. The phenomenon allowed companies like Netflix, Google and Apple to tap into telecoms operators’ customer base and gather revenues, leaving carriers as nothing more than dumb pipes.
Brewer says African players are grappling with business models that will hopefully help them avoid the same fate. “There is space in Africa for someone to to do an Apple or Netflix, but there is also the chance that an international player will take on the market before local players get stuck in,” he says.
The mobile data boom internationally has been driven largely by the high penetration of smartphones and Brewer says Africa still has a way to go to catch up.
In the past few years, Africa has enjoyed strong growth in the number of users accessing data, largely thanks to the introduction of undersea cables like Seacom.
Increasingly, African operators have to look at new revenue streams as the voice market begins to saturate and Internet traffic increases.
Brewer says there is a general misconception that with increased data traffic comes lower margins and decreased voice traffic. “But operators in Africa have been lucky, because voice networks on the continent are often of poor quality, and as users move from voice to data, they free up capacity on the voice side.”
He says this means operators can charge premium rates for better voice quality.
However, he says African operators should start providing applications and content and as soon as possible. “There is a danger that a company like Netflix could enter the market and leave carriers as plumbing rather than revenue gatherers,” he says. — Candice Jones, TechCentral