Telecoms Opportunities: Africa Infrastructure Series (Part 1)

Defining moments:

While on a trip to Africa recently, I visited my 84-year-old grandmother in the countryside. On arrival, I met her answering a call on her mobile phone while gardening. I was pleasantly surprised to see that mobile phone network has finally reached her in a rural village in West Africa.

It is on record that western investors came late to Africa telecommunication transformation because analysts and bookmakers failed to predict the mobile phone revolution when it started. For a continent with a population of over one billion and slightly over two million mobile phone subscribers a decade ago, having more than half a billion subscribers today is a remarkable economic achievement.

New approach:

The success story of telecommunication in Africa is mostly driven by large-scale private investments. According to Public-Private Infrastructure Advisory Facility (PPIAF), Sub Saharan Africa ICT sector has attracted over $60 billion in investment, which translates to 97 projects in 37 countries. To make return on investment quicker, telecom networks in Africa introduced pre-paid services, which resulted in astronomical growth of subscribers across the continent.

The governments of African countries also contributed enormously to the success of the telecommunication investors in their countries. The governments not only deregulated the sector, some provided market entry incentives to lure private investors that have successfully transformed the communication ability of an entire continent.

Regulating the market:

Telecom regulatory bodies across Africa are gradually evolving a stable regulatory system that guarantees sustainable growth and increased foreign direct investment. According to Secretary General of International Telecommunication Union (ITU), Mr Hamadoun Toure, over 45 African countries have good regulatory authorities with stable and predictable policies.

The McKinsey Institute in their 2010 report suggested that telecom regulators and African governments could further drive the growth of the sector by making lower-spectrum bands available, encourage infrastructure sharing, provide rollout incentives and potentially reduce rural telephony license fees.

How to get involved:

Investors that arrived earlier and recent acquisitions dominate telecom markets in Africa.

Nevertheless, there are still growing opportunities for both big and small businesses in rural telephony, recharge card solutions among others. Companies that are aspiring to explore opportunities in the African telecom market should consider collaborating with a local player in their target market.There are several opportunities to meet African telecom experts in industry events in Africa or outside the continent.

The opportunities below are spread across countries in the continent.

  • SIM Card Accreditation (software and hardware providers)
  • Repair and maintenance of telecommunications facilities
  • Collocation and co-sharing of infrastructure
  • Power management systems
  • Alternative energy for cellular sites/services (solar, wind, etc.)
  • Vehicle tracking systems
  • Satellite navigation systems Infrastructure companies – (building/Towers and Masts co-location)
  • Call logging solutions
  • Recharge card solutions and other value-added services
  • ICT/telecoms solutions for telematics and healthcare
  • Consultancy and business development services
  • Sales and installation of terminal equipment
  • Provision and operation of public pay phones among others.

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A recent study by global research firm, InMobi, has showed that 69 per cent of consumers in Africa were fast embracing the mobile advertising option.

According to the result of the study released recently, the strong acceptance of mobile advertisements in Africa, combined with scale and reach potential, pointed toward explosive market growth for mobile publishers.

InMobi, a large and fast-growing mobile advertisement network, announced African results from its landmark study,”A global consumer view of mobile advertising.”

InMobi which provides advertisers and publishers a display mobile advertising platform reaching 50 million Africans through nearly three billion ad impressions monthly, said as a committed player in Africa, it recognised the need to provide the mobile industry with a data-driven, distinctly African consumer perspective on the state of mobile advertising.

This, it added, included focus on Nigeria, where male acceptance of mobile advertising was the highest in the world at 76 per cent. A key factor making Nigeria, Africa‘s fastest growing mobile market.

The survey, done in partnership with digital marketing intelligence agency, ComScore, interviewed 2,500 consumers in South Africa, Kenya, and Nigeria and discussed overall comfort with mobile ads, perceived benefits, willingness to have ads, and interest in major brands across four categories of automotive, travel, consumer electronics and entertainment.

The Vice-President, Global Research & Marketing, InMobi, Mr. James Lamberti, was quoted as saying that,”Africans are among the most progressive in the world, when it comes to mobile advertising and clearly ahead of consumers in Europe and the United States when it comes to adoption.”

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