Denis Opudo
Africa is in the revolution phase of the telecommunication market in the continent. Several companies concerned with the telecom operations are seeing the potential in Africa. For instance, Orange it to build headquarter in Ivory Coast which will cost $50 million. While other companies are walking out, Orange launched in Sierra Leone after buying Airtel which has been withdrawing in some markets and partnered with Tigo in Ghana.
The same approach is seen between Viettel, which is looking to stabilize in Nigeria and Dubai Holding which withdrew its shares from Tunisie Telecom. According to Lehlohonolo Mokenela, an industry analyst in Frost & Sullivan Africa’s Digital Transformation Practice, all this sums up to a time of revolution in Africa’s telecoms market. This is after a long period of maximum growth and benefit which seems to come to an end.
The current increase in prices of various services by the telecommunication companies have led to a reduction in the in the usage of some services especially voice and traditional messaging services like MMs and SMS. Irrespective of the heavy investments operators have only been in a position to get revenue from broadband connectivity, while the over the top (OTT) players have been able to offer value-added services. The finance pressure is what has led to the decline in the number of telecommunication companies in the African market.
However, there are still challenges and opportunities in Africa’s telecoms market it now depends on how one tends to view it. When other operators are doing well to the extent of wishing to extend their market, others are facing it hard wishing to withdraw from the market. The whole continent is undergoing the challenge with basic challenges being vigorous competition and a rise in regulatory pressure.
Every market has its unique form of competition which forces operators to reduce tariffs which has an impact on their revenues. Away from that, a number of markets are facing OTT competition. The regulatory pressures are mainly about SIM card registration, mobile tax increases, quality of service (QoS) requirements and local ownership requirements of foreign companies. Other challenges include weak economies and increased market volatility in most African markets.
With adequate access to reliable power sources and the high cost of energy is still a stumbling block to the expansion to rural areas. This makes no need of business building communication infrastructures in the rural areas. Because of that, operators have opted for tower companies and infrastructure sharing ways for them to contain their costs of operation and increase network coverage more cost-effective.
However, there are still vital growths in that are seen on the continent. In Tanzania, democratic republic of Congo (DRC) and Mozambique are amongst the few countries with growth since they have the large population and low mobile penetration rates. Ethiopia also represents a good opportunity for operators looking for geographic expansion. However, the regulator remains unwilling to open up the market to other operators to compete with the country’s only operator, Ethio Telecom.
