Business
Inconvenient facts that need to be addressed for Africa’s Telecoms Sector to continue growth
How will all of this happen? There are several different stakeholders and they all have a role to play.
The Mobile Operators: They have to start looking forward to the new African data era and stop worrying about being a “dumb pipe”. A low margin, high volume data business is entirely honorable. If you want to add value with over the top (OTT) services, make local players successful by facilitating their success. You can always buy them out in the ed. Trying to compete with them is a fool’s errand. No mobile operator has a right to a certain business model in perpetuity. As the Black Panthers used to say, you’re either the steamroller or the road.
Regulators: Stop looking at all problems through the rear-view mirror of the last decade. Africa needs the cheapest possible data networks so prices to the African end users are as low as possible. Encourage innovative services like Viber and Whatsapp rather than seeing them as a threat to the current business. When the business model changes, defending the old business model only delays disruption happening.
Regulators need to encourage new players to enter the data market and give new competition to mobile operators. They need to spending their universal access funds with new operators to incentivize the existing operators to take expanding their geographic market seriously. The regulators have to say to existing operators, if you don’t go to areas without coverage, we will offer licences to new operators who will.
Governments: The more competitive African countries have shown what can be done by opening up competition and their prices at many levels are globally competitive. For those defending monopolies, the choice is very stark: you can continue to defend several hundred or thousand jobs at your incumbent monopoly or you can open up your markets in ways that will benefit all of your citizens and create hundreds or thousands of new jobs.
Governments tend to see the existing industry as a tax cash cow at all levels. You cannot continue to tax the industry and not understand that these taxes will keep industry prices higher. The same is true of selling spectrum. You might get fabulously large sums selling 4G spectrum to mobile operators. But if you do that, then the price to the end users will remain higher for longer as the mobile operators seek to get back the money they have invested.
African Governments have an interest in their citizens having as faster bandwidth as possible as cheaply as possible. A US$30 smartphone can show an inexperienced rural nurse how to identify a recent disease or a teacher how to make his or her lessons more interesting. Likewise a farmer can look at a video on how best to plant and sustain his or crop.
It becomes an easy turn of phrase to say at points like this that Africa is facing a “turning point”. Everything over the last decade has been a turning point but now it becomes harder because the business challenges are much harder. Everyone involved has to have the courage to change their thinking so that they can re-invent the industry for the next decade ahead.
Source: Balancing Act Africa
