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Africa’s Telecom Revenue to Hi $59Bn in 5 Years

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Sub-Saharan Africa’s retail telecoms revenue will grow at a faster rate than any other region in the world over the next 5 years (6.4% CAGR over 2012–2018), but operators in the region must still look to develop new digital economy revenue streams to supplement core services.

Analysys Mason’s most-recent Sub-Saharan Africa forecasts showed the region’s telecoms market will grow faster than any other region worldwide over the next 5 years

Telecoms retail revenue reached $41 billion in 2012, and will rise to $59 billion in 2018, growing from 3% of worldwide total revenue in 2012, to 4% in 2018.

According to Analysys Mason, handset data services, mobile broadband and fixed broadband offer the strongest opportunities for revenue growth in Sub-Saharan Africa through 2018, and will help offset stagnating messaging services and declining fixed voice revenue.

 The M2M market will also grow rapidly, but will represent only a small share of total revenue.

By 2018, mobile networks will account for more than 98% of voice connections and 80% of broadband connections in the region. The number of mobile broadband connections will reach 29.3 million by 2018

Mobile voice revenue growth (at a CAGR of 6.3%) will be a key driver, and is by far the largest service line in terms of revenue, reaching $39 billion annually by 2018.

Analysys Mason said that revenue growth from mobile messaging will slow to a CAGR of 1.8%, versus 14.4% annual growth during 2009–2012, while mobile broadband (mid-screen and large-screen) revenue will grow at 14.6% per year.

Mobile handset data revenue will grow faster than mid- and large-screen mobile broadband, but will still only be about one fifth of the size of mobile voice revenue in the region by 2018.

Smartphones will account for 80% of active broadband connections and 22% of handsets in the region overall, by 2018. In general, the take-up of smartphones in the region is progressing more quickly than we were forecasting earlier this year, driven by the availability of affordable handsets and consumer appetite for smartphones, which has been boosted by data services.

3G will reach 152 million active SIMs (excluding M2M) by 2018, accounting for slightly less than 20% of non-M2M SIMs.

3G take-up is clearly driven in part by fixed broadband substitution, but will also be driven by operators’ efforts to expand 3G coverage and capacity, and increasing availability of less-expensive data tariffs and affordable, data-enabled devices.

4G is still a long-term play in Sub-Saharan Africa, and is constrained by spectrum availability issues, coverage, device affordability and licensing delays.

Operators in the region that have launched LTE services include Cell C, Neotel, Orange Uganda, Telkom Mobile and Vodacom in South Africa. 4G will account for only 1.52% of the 774 million active mobile connections in Sub-Saharan Africa at the end of 2018.

Despite strong interest in high-speed mobile broadband services, the 2G base in Sub-Saharan Africa will continue to increase throughout the forecast period, and will still account for the majority of SIMs (78%) in 2018. 3G and 4G will be limited to urban areas because rural populations are more price-sensitive and will continue to use basic phones.

This, as well as the high proportion of prepaid mobile users in South Africa (at 95%), must be taken into account by companies looking to develop new revenue streams from digital economy and over-the-top services.

As in other regions, operators in Sub-Saharan Africa are looking to bolster core service revenue through offering and enabling B2B and B2C digital economy services for their subscribers.

Key M2M verticals in Sub-Saharan Africa will be retail, banking and fleet management, as well as applications with socioeconomic benefits, such as m-health. M2M connections will grow from 2.8 million in 2012 to 28.9 million by the end of 2018, at a CAGR of 45%. M2M services will account for 2.9% of all mobile connections in Sub-Saharan Africa by the end of 2018. However, revenue per connection is low – M2M revenue will represent less than 1% of mobile retail revenue.

Nigeria and South Africa will be the main M2M markets in the region. In South Africa, in particular, plans to roll out smart meters during the next 5 years will drive the market.

In other markets, Safaricom in Kenya has developed a mobile solution to make clean energy more accessible and affordable to rural areas, and Orange Uganda launched an M2M offering in late 2012 for fleet management, and remote monitoring and surveillance.

Over-the-top services are gaining traction in Africa as smartphone usage grows, but willingness to pay is limited, and enabling payment is also an ongoing challenge.

Mobile money continues to be an area of intense interest for the region, and for service providers, given the size of the opportunity among the unbanked.

Analysys Mason said that the success of M-Pesa has spawned a plethora of smaller mobile money and payments services, usually local, which have achieved varying levels of success, as well as larger-scale, operator-led initiatives, such as Tigo Cash.

“Operators are also turning their attention to monetising customer relationships through cross-selling non-telecoms financial products, such as insurance (for example, airtel’s and MTN’s recent airtime-paid insurance offerings in Nigeria). We expect many more examples of this type of innovation to emerge as operators look to supplement core services growth in the African market” Analysys Mason  stated


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Rewane, Financial Expert Backs Telcos’ Move to Hike Tariff

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Bismarck Rewane, managing director/chief executive officer, Financial Derivatives Company Limited has backed telecommunication companies’ move to increase tariffs.

Rewane, Financial Expert Backs Telcos’ Move to Hike Tariff

Recall that telecom companies recently reiterated calls for an increase in prices of calls, data, and other services.

They argue that current prices are insufficient to maintain their business operations.

This request is contained in a communique signed by the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON).

The telecom providers are advocating for cost-reflective tariffs, claiming that adverse economic headwinds are threatening their financial viability.

The operators stated that its general service pricing framework has not been reviewed upward in the last 11 years because of regulatory constraints.

“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” the telcos said.

The telcos called on the government to facilitate a constructive dialogue with its industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with their financial viability.

This push for higher prices coincides with MTN Nigeria reporting a loss due to foreign exchange losses in 2023 and Airtel experiencing declining profits amid an economic downturn in the country.

While the development has triggered a backlash in some quarters, Rewane said telco pricing needs to reflect current realities.

He was a guest on weekend’s edition of Channels Television’s Politics Today

 

 

 

 


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Africa Data Centres Unveils ADC Channel Programme

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Africa Data Centres, a division of the Cassava Technologies group, is excited to announce the launch of its exclusive channel partner programme, ADC Channel.

Africa Data Centres Unveils ADC Channel Programme

This programme is designed to establish colocation and ecosystem partnerships, empowering members to expand their product portfolio & offerings alongside their market presence including an expanded data centre footprint.

ADC Channel presents a unique opportunity for global carriers, Internet Service Providers (ISPs), system integrators, Data Centres, Mobile Network, Content Developer, telecommunications companies, network infrastructure operators, hyperscalers and others to deliver state-of-the-art, sustainable and cost-effective digital solutions to their clients.

The primary objective of ADC Channel is to foster collaboration amongst partners, facilitating the delivery of optimised solutions and comprehensive support to clients. Partners enrolled in ADC Channel will benefit from a flexible approach that accommodates various partnership and go-to-market (GTM) models.

Finhai Munzara, CFO of Africa Data Centres, emphasises that the benefits of the ADC Channel programme extend to all types of partners.

“Our facilities are designed with the needs of hyper-scale, wholesale & enterprise clients in mind, catering to their technical, operational and commercial requirements. Whether it’s greenfield projects, built-to-suit facilities, powered shells, dedicated halls, or hybrid colocation, we offer flexible, scalable and sustainable solutions that suit partners of every kind.

He elaborates on the advantages of becoming an Africa Data Centres Partner.

Firstly, clients gain an additional product offering & footprint to augment their existing portfolio, enabling them to offer bundled solutions. This not only enhances their current revenue streams but also positions them for further growth & retention with both existing and future customers.

Africa Data Centres has also developed ADC Marketplace, a pioneering platform designed to empower partners and customers across the continent.

This innovative marketplace provides a dynamic space for partners to showcase their services and for customers to explore offerings, fostering collaboration and visibility within the African tech community. Offering unmatched connectivity and growth opportunities, the ADC Marketplace stands as the ultimate platform for African enterprise organisations and tech companies seeking to thrive in today’s digital landscape.

Partners stand to benefit from reduced churn, as colocation is inherently a ‘sticky’ product with minimal price erosion. By offering best-of-breed colocation services from Africa’s leading data centre provider, partners can differentiate themselves from competitors.

Partners will also enjoy seamless access to data centre experts, continuous commercial and technical support, and regular, complimentary training for their sales and product teams.

Furthermore, partners face no financial risk, as participation in the channel programme requires no investment and entails no capital expenditures for building data centres.

Partners can also leverage flexibility in setting their selling prices and receive significant upfront discounts, further bolstering their competitive advantage. Exclusive benefits include competitive pricing, dedicated sales & Presales Teams, Remote Hands support and access to joint marketing resources & activities, enabling partners to thrive in the marketplace.

Munzara emphasised that ADC Channel programme  epitomises Africa Data Centres’ commitment to fostering collaborative growth and innovation. “It serves as a platform for clients to enrich their product portfolios and seamlessly extend their business across diverse ecosystems with openness and transparency.” Africa Data Centres warmly invites partners to embark on this transformative journey towards shaping the future of digital connectivity in Africa.

“The programme prioritises mutual growth, leveraging Africa Data Centres’ profound industry expertise and extensive infrastructure,” Munzara concluded.

 


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Airtel Hosts Interactive Knowledge Session for Secondary School Girls

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As part of its commitment to empowering and mentoring women to become global leaders while breaking stereotypes and closing gender gaps, the Airtel Women Network, a platform comprising female employees of Airtel Nigeria, welcomed girls from Airtel’s adopted school, Alaba Oro Comprehensive Senior High School, Ajegunle, to commemorate International Day of Girls in ICT on Monday.

Led by the telco’s IT Director, Kemi Ariyo, the session emphasized the need for the rise of influential female role models in driving progress within Science, Technology, Engineering, and Mathematics (STEM) careers. It also served as an avenue to inspire young girls about the vast opportunities within the Information and Communication Technology (ICT) field.

During the session, Ogo Ofomata, Director of Enterprise and Airtel Business and President of the Airtel Women Network, shared insights on the significance of the 2024 commemoration with the students.

“Leadership entails leading yourself to do the things you have to do. With regard to the theme of this year’s International Girls in ICT Day, which is Leadership, our goal is to empower young girls and women to become programmers, coders, designers and to pursue careers in the ICT sector, ultimately becoming leaders in the IT sector,” she said.

The highlight of the event was a thought-provoking session led by Kemi Ariyo, IT Director at Airtel Nigeria, emphasizing the importance of technological knowledge in addressing various global challenges.

In her words, “The world revolves around technology and everything we do today has to do with technology. You can get into that space by adopting hard work, smart work, and an active involvement in internship programs. In addition, just as technology can be used in music and other sectors, learning technology can help you achieve your goals of problem- solving in this digital age.”

Also speaking at the event, Phanindra Nichanametla, Chief Financial Officer, Airtel Nigeria, restated Airtel’s tagline ‘A Reason to Imagine’, reassuring the students of Airtel’s commitment to encouraging positive imagination. “A very important note to take home from this event is that Airtel is here to change your imagination and give you opportunities to imagine more,” he said.

Airtel remains committed to promoting initiatives that promote gender equality and diversity in the workplace. By investing in the education and empowerment of young girls in ICT, Airtel Nigeria continues to pave the way for a more inclusive and prosperous future in the world of technology.


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