International Data Corporation Insight has found that mobile data will remain the operators’ cash cow in 2014, aside the exponential increase in mobile data forcing telecommunications operators in Africa to rethink their network and data service strategies.

Mobile data services have continued to gain prominence in the business models of Middle East and Africa operators.

While those in the Middle East have remained at the forefront of technological development and invested heavily in building ubiquitous next-generation networks, operators in Africa, however, have taken a more cautious approach, with sporadic network evolution centered on highly populous areas and major commercial centers.

Thus, IDC predicted that in 2014, mobile data will remain a cash cow for regional telcos. However, the growing popularity of data-hungry applications and services, particularly video, will contribute to an exponential increase in data traffic and make network investment economics difficult to justify.

 To spur the trend is the belief that the regulatory environment will become more progressive and stimulate competition.

 IDC noted that Telecommunications markets in MEA have expanded significantly over the last decade, backed by progressive regulatory environments and conscious efforts by the regulatory authorities to stimulate competition.

The first era of market liberalization was marked by the opening of mobile markets to new operators, followed by progressive reforms to introduce new services (e.g., 3G) and/or the opening up of markets to competitors.

Having done this, regional regulators will strive to improve the market dynamics in 2014, accelerating the development of new services in addition to increasing competition.

Regulators can approach this in three primary ways: by introducing mobile number portability; by opening markets to mobile virtual network operators (MVNOs); and by releasing spectrum for next-generation 3G/LTE networks.

Nigeria CommunicationsWeek had earlier in the week reported that the Nigerian Communications Commission (NCC) will auction the 2.3 GHz band for commercial assignment on a national basis during the week commencing February 17, 2014.

The spectrum is one unpaired block of 30 MHz, adjoining a 10MHz guard band with the adjacent 2.4 GHz band. The specification is: • 2360 – 2390 MHz – Spectrum on offer; and 2360 – 2390 MHz – Spectrum.

Meanwhile, IDC also said that operator media transformation will continue as acquisitions are on the cards.

Thus, in 2014, operators will move beyond merely setting up businesses to forming clear strategies to help them play a broader role in the digital economy.

“Service evolution will force operators to rethink their strategies and recognize the importance of the customer experience. As the usage of smartphones and mobile social media is growing rapidly in the MEA region, marketers are more cognizant of consumers’ locations and preferences. Many organizations will explore ways to work closely with operators, media companies, and app developers to create targeted marketing practices in the region, which will prove to be a win-win situation for all involved.

“Telecommunications services are evolving as social media, multiscreen offerings, mobile applications, and OTT services increasingly influence consumer behavior. It is imperative for operators to understand consumer behavior and push products and services in line with their expectations. This will eventually help operators to counter declining service engagement cycles and improve customer experience.

“As markets continue to evolve, more customers are eschewing core telecommunications services in favor of rich OTT services,” said Paul Black, director of telecommunications and media at IDC Middle East, Africa, and Turkey. “This is forcing regional operators to reevaluate their business models, data offerings, tariff packages, and even network rollout plans, as well as go-to-market strategies. While traditional services are still offered, operators are expanding their role in the digital value chain by promoting local content generation and application development. Operators are also looking at adjacent markets and exploring new digital services opportunities.”

“For digital media providers and OTT players,” Black continues, “the changing market dynamics provide unique opportunities to establish direct relationships with end users. However, the business models are still evolving, and the ability to pay for these services, despite their growing usage, remains low throughout the Middle East and Africa (MEA). In this scenario, the importance of partnerships between telcos, content providers, OTT players, and digital media companies is growing.”