Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      Report shows big shifts in online spending in South Africa

      Report shows big shifts in online spending in South Africa

      2 September 2026
      Teraco's electricity consumption triples in four years

      Teraco’s electricity consumption triples in four years

      2 September 2026
      Woolworths' online business is going nowhere fast

      Woolworths’ online business is going nowhere fast

      2 September 2026
      FSCA debars CEO of JSE-listed bitcoin treasury company - Warren Wheatley and Stafford Masie

      FSCA debars CEO of JSE-listed bitcoin treasury company

      2 September 2026
      New OpenAI model can find and exploit unknown security flaws on its own

      New OpenAI model can find and exploit unknown security flaws on its own

      2 September 2026
    • World
      'This is not circular': Jensen Huang defends $3.5-billion MediaTek deal

      ‘This is not circular’: Jensen Huang defends $3.5-billion MediaTek deal

      2 September 2026
      AI-generated music banned from Australian charts

      AI-generated music banned from Australian charts

      26 August 2026
      Traders brace for a R4.5-trillion swing in Nvidia's value

      Traders brace for a R4.5-trillion swing in Nvidia’s value

      25 August 2026
      Russia building its own Starlink - and faster than expected - Vadym Skibitskyi

      Russia building its own Starlink – and faster than expected

      11 August 2026
      Meta AI will now tell parents if their teen is in crisis

      Meta AI will now tell parents if their teen is in crisis

      17 July 2026
    • In-depth
      Google DeepMind CEO Demis Hassabis. Image: John Sears

      The plan to stop AI from breaking the world

      16 July 2026
      The internet has a Strait of Hormuz problem

      The internet has a Strait of Hormuz problem

      15 July 2026
      AI boom sparks rally, frenzy and fear

      AI boom sparks rally, frenzy and fear

      11 June 2026
      Every plug-in hybrid on sale in South Africa, ranked by price - Lamborghini Temerario

      Every plug-in hybrid on sale in South Africa, ranked by price

      7 June 2026
      What Wi-Fi 8 will mean for wireless networks

      What Wi-Fi 8 will mean for wireless networks

      1 June 2026
    • TCS
      Watts & Wheels S1E8: 'Tesla lands in Africa, just not here'

      Watts & Wheels S1E8: ‘Tesla lands in Africa, just not here’

      24 August 2026
      TCS | Herotel CEO Van Zyl Botha on beating Starlink to South Africa

      TCS | Herotel CEO Van Zyl Botha on beating Starlink to South Africa

      14 August 2026
      Meet the CIO | Discovery's Derek Wilcocks on AI, guardrails and growth

      Meet the CIO | Derek Wilcocks on how AI personalised Vitality

      13 August 2026
      TCS | Money just became native to the internet - Steven Boykey Sidley

      TCS | Money just became native to the internet – Steven Boykey Sidley

      12 August 2026
      TCS+ | Specops' Darren James on continuous trust in an AI world

      TCS+ | Specops’ Darren James on continuous trust in an AI world

      7 August 2026
    • Opinion
      The fragile joint in the Capitec machine - Pambos Soteriades

      The R197-billion market the banks can’t reach

      25 August 2026
      South African tech's compounding debt problem - Jannie van Zyl

      Management consulting as we know it is over

      21 August 2026
      South African tech's compounding debt problem - Jannie van Zyl

      The most dangerous customer is the quiet one

      10 August 2026
      South African tech's compounding debt problem - Jannie van Zyl

      South African tech’s compounding debt problem

      29 July 2026
      The fragile joint in the Capitec machine - Pambos Soteriades

      Best network, worst vibes: the puzzle of SA telecoms

      20 July 2026
    • Company Hubs
      • 1Stream
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • Ascent Technology
      • AvertITD
      • BBD
      • Braintree
      • CallMiner
      • CambriLearn
      • CM.com
      • Contactable
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • Kaspersky
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Telviva
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Vox
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • HealthTech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
      • Watts & Wheels
    • Events
    • Advertise
    TechCentralTechCentral
    Home » In-depth » How Africa’s operators can survive the big squeeze

    How Africa’s operators can survive the big squeeze

    By Editor2 November 2011
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    Fernando Usera

    With competitive pressures increasing, voice markets maturing and price wars becoming more prevalent, telecommunications operators in Africa have to improve their efficiencies, cut costs and find new areas in which to grow, especially if they don’t want to be relegated to being “dumb pipes” on which other companies profit from their investment.

    These are the views of Fernando Usera, MD of the communications, media and technology practice in sub-Saharan Africa at consulting firm Accenture, who says voice tariffs across the continent are under pressure, which is a problem for operators because many of the bigger markets, like SA, are reaching saturation.

    Usera points to decreasing Arpus — average revenue per user is an important financial metric — and price wars in markets like Kenya, saying operators must place a “strong emphasis” on becoming more efficient, improving customer service significantly to reduce churn and expanding into new areas like IT services, mobile banking and other value-added, revenue-generating areas.

    Operators must explore new services for consumers around data to try to offset the reduction in voice revenue from increased competition.

    In markets like SA, where smaller players have led with aggressive price reductions, the bigger players need to find ways of rewarding the loyalty of clients rather than simply trying to match the cost-per-minute or cost-per-megabyte of rivals. They can also differentiate themselves through stronger innovation — for example, by reinvesting in their networks and building next-generation systems based on long-term evolution (LTE) wireless technology. “LTE could be very useful to help them ‘decongest’ their networks,” Usera says.

    “That’s the good thing about competitive markets: it nurtures the imaginations of the dominant operators to look for alternatives to maintain their market share.”

    Safaricom CEO Bob Collymore

    However, they must transform their cultures, which have been built up around the idea of selling voice minutes to subscribers and little else. Spain’s Telefonica has created a digital division focused exclusively on new revenue streams to allow it to survive and continue to lead the market. Left-field competitors such as Google and Apple will leverage operators’ relative lack of agility, so they need to ensure they transform themselves to be able to better compete and offer what Usera calls a “supermarket of services”.

    He says it is not inevitable that operators will become dumb pipes, a conduit for services provided by the likes of Apple and Google. However, they’ll have to be smart in choosing and offering new services to their customers and leverage their strengths, such as their billing systems and call centres.

    However, in some African markets, price wars, especially in basic voice services, have intensified to such an extent that some operators, policy makers and regulators are worried it could damage the industry by discouraging investment in new network infrastructure and services. But Usera cautions against the moves, seen in some African markets, for regulators to implement a floor on the retail prices companies can charge. Rather, he says, it’s always better to allow the market to regulate itself, even if that causes short-term damage.

    If India’s Bharti Airtel, which triggered the price war in Kenya, believes it is “efficient enough” to enjoy “normal profitability” from lower prices, then “that’s something Safaricom needs to meet and it needs to be more efficient”. Safaricom is Kenya’s largest mobile operator. Its CEO, Bob Collymore, has decried the price war in the East African nation, warning it could undermine the industry and eat into government tax receipts.

    However, Usera warns that price wars can also be damaging. “I don’t believe in them,” he says. “Prices should be at a level that allows companies to continue to invest in technology, especially on a continent that needs it as much as Africa.”

    Ultimately, though, the market always rights itself without regulatory meddling, he says. “In Uganda, a price war started, and because of the lack of profitability [by the operators], it is now ending.”  — Duncan McLeod, TechCentral

    • Subscribe to our free daily newsletter
    • Follow us on Twitter or on Facebook
    • Visit our sister website, SportsCentral (still in beta)
    Follow TechCentral on Google News Add TechCentral as your preferred source on Google


    Accenture Apple Bharti Airtel Bob Collymore Fernando Usera Google Safaricom
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleSA launch for iPhone 4S weeks away
    Next Article Samsung Galaxy Note in SA: pricing and details

    Related Posts

    China is rewriting the rules of open-source software

    China is rewriting the rules of open-source software

    1 September 2026
    The John Ternus era begins at Apple - Tim Cook

    The John Ternus era begins at Apple

    1 September 2026
    The Apple-OpenAI feud just got a lot uglier - Sam Altman

    The Apple, OpenAI feud just got a lot uglier

    1 September 2026
    Company News
    Paratus Uganda first to market with Starlink service

    Paratus Uganda first to market with Starlink service

    2 September 2026
    Solid8 brings AlgoSec Horizon to Southern Africa - Simone Santana

    Solid8 brings AlgoSec Horizon to Southern Africa

    1 September 2026
    Ren-Flex installs Africa's first HP Indigo 200K

    Ren-Flex installs Africa’s first HP Indigo 200K

    1 September 2026
    Opinion
    The fragile joint in the Capitec machine - Pambos Soteriades

    The R197-billion market the banks can’t reach

    25 August 2026
    South African tech's compounding debt problem - Jannie van Zyl

    Management consulting as we know it is over

    21 August 2026
    South African tech's compounding debt problem - Jannie van Zyl

    The most dangerous customer is the quiet one

    10 August 2026

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    Report shows big shifts in online spending in South Africa

    Report shows big shifts in online spending in South Africa

    2 September 2026
    Teraco's electricity consumption triples in four years

    Teraco’s electricity consumption triples in four years

    2 September 2026
    Paratus Uganda first to market with Starlink service

    Paratus Uganda first to market with Starlink service

    2 September 2026
    'This is not circular': Jensen Huang defends $3.5-billion MediaTek deal

    ‘This is not circular’: Jensen Huang defends $3.5-billion MediaTek deal

    2 September 2026
    © 2009 - 2026 NewsCentral Media
    Built and maintained by Chronon
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}