Trends in the African ICT Sector


Last month, HIP Consult traveled to Cape Town, South Africa, for the region’s biggest annual telecom event, AfricaCom.  More than 14,000 industry stakeholders from across the continent and the world gathered to network and discuss prevailing challenges and opportunities of Africa’s ICT sector.

The headline keynote session of the first morning of the conference featured MTN Group’s CEO, Rob Shuter, who spoke about the evolving road of the African telco in a new age of data and digital services.  He cited digital inclusion as essential to unleashing additional growth and revenue opportunities for mobile network operators throughout the region. “The first big problem,” according to Shuter, “is that the data coverage is not there.”  Following the geographic coverage of telecom services, he cited affordability of handsets and data services as another major inhibitor to the realization of more ubiquitous mobile internet usage.

Following Shuter’s remarks, Chairman of the Nigerian Communications Commission (NCC), Olabiyi Durojaiye, offered a regulator’s perspective, talking about the role of the public sector in addressing the challenge of digital inclusion.  He stressed that though there has been growth in the ICT sector over the course of the last 20 years, broadband connectivity remains too low, and the majority of youth who should be at the forefront of internet adoption lack the requisite access and skills to participate in the digital economy.  According to Durojaiye, governments and other public sector actors must treat internet connectivity as a human right.  In order to promote digital access and the continent’s development agenda, he noted, regulators must work with the private sector to expedite broadband deployment. 

The topics touched upon by Shuter and Durojaiye point to a wider theme of mobile market maturation and evolution playing out across much of Africa.  Due to a number of factors, ranging from rising costs and tightening margins, to regulatory and structural pressures, mobile operators and other telcos have seen their business models come under strain.  Against the backdrop of shifting market dynamics, an increasing number of players have started or intend to adoptalternative network strategies in an effort to reduce costs and support a spoking appetite for high bandwidth applications, which entails deploying significantly more infrastructure, fiber optics in particular, as well as deepening their relationships with third-party infrastructure services providers.  As infrastructure operators look to minimize average total cost, there is growing consent for the consolidation and avoidance of duplicative infrastructure and thus, thepromotion of open access networks.

HIP Consult’s CEO, Judah Levine, moderated a panel at AfricaCom on how these open access networks can support greater broadband penetration in the region.  Alexander Kiel, the CFO of CSquared, and a panelist in the session, commented that “with the additional site and bandwidth requirements, particularly related to the roll-outs of 4G and 5G across the continent, the amount of capital required will be immense, so shared infrastructure and open access will be key to connecting rural areas in particular.

Though the market dynamics for the African ICT sector have become more complex, it is clear that pockets of opportunity remain.  Unlocking these potential revenue streams will increasingly depend on having the right strategic partnerships and alliances in place.

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