5 trends in African telco market moving into 2021
By Hassen Hamza, Business Development Manager at Nexign.
In 2020, African telco providers, just like CSPs worldwide, faced a challenge associated with the new normal. The social distancing measures put in place to ensure safety of citizens during the pandemic highlighted the value of connectivity for social and economic wellbeing. African operators supported work-from-home and ensured uninterrupted access to corporate networks, and will continue to do so in 2021.
Just like the remote work and social distancing, a few trends that mattered in 2020 will still be relevant in 2021. Apart from emerging trends like use of contactless omnichannel communication for better customer experience, there are long-term tendencies that already define how CSPs build their business in the region, such as expansion of 4G coverage and continuous growth on Mobile Money. Telecom companies will continue to launch new projects, try new business models and improve interaction with subscribers to stay profitable in the post-pandemic world.
Hassen Hamza, Business Development Manager of Nexign, explores five trends that will have an impact on telecommunications industry in Africa in the 2021:
Although 5G is one of the most discussed topics for telco professionals, in 2021 the majority of local CSPs will be busy gaining the maximum benefit from 4G networks and ensuring seamless interaction between various networks.
Driven by the increased data usage during the pandemic and the significantly growing over-the-top (OTT) offerings, social media and mobile video traffic, African network operators will continue to focus on expanding and improving their services to ensure customer loyalty.
The growing availability of affordable smartphones, improving mobile broadband coverage and speed will boost mobile data consumption. Mobile network operators will further focus on offering optimized and more focused data bundles and specific ones for social networking and other OTT applications in order to drive average revenue per user (ARPU) and secure a sustainable overall revenue growth.
Mobile Money gaining momentum
Telecom operators are constantly looking for the ways to extend their product offerings beyond connectivity and find new ways to capitalize the relationships they build with their customer base. African CSPs are not an exception – operators in the region collaborate with vendors to find a way for a synergy between telecom and financial sector with immensely popular mobile money products.
There are a few reasons that make launching financial products an attractive business model for CSPs. First, the KYC procedures are simplified and automated. Second, the new revenue coming from transactions can improve operators’ financial results and contribute to increase of ARPU. Third, customers get a convenient product closely integrated with the connectivity services, so they are satisfied and are more likely to stay within the CSP’s ecosystem and generate extra revenue from partnership and cashback programmes.
Telco operators in Africa are ready for MoMo in terms of infrastructure, but regulatory requirements and local laws can be an obstacle. In some countries, operators are not allowed to operate as a bank - for example, to host a mobile wallet and use it to transfer money – which means that CSPs have to partner with banks and other institutions to launch these services. Therefore, African CSPs are looking for flexible solutions that supports different engagement models and can be fully integrated with partner’s solutions. African CSPs also evaluate solutions based on the vendor’s reputation and its ability to ensure security of customer data and provider’s IT infrastructure.
Customer care going beyond telecom services
While stellar CX is becoming the main differentiator in highly competitive telco markets, CSPs are investing to deliver on the expectations of the new generation of subscribers by utilizing a contactless omnichannel service model and using AI-driven tools for automated assistance. African CSPs, just like operators worldwide, will prioritize the enhancement of self-service capabilities to reduce the cost of operations and customer waiting-times. Integration with national identity management systems will facilitate personalized and frictionless access to variety of services, contributing to social resilience during the ongoing pandemic.
Due to the disruption caused by the pandemic and potential issues associated with IT security operators are paying closer attention to planning resilient georeduntant solutions and carefully balancing between relying on global services and capabilities and remaining control over solution, data and expertise within local environment. African CSPs will aim to build the internal expertise to avoid vendor lock-in and become true owners of the solutions they pay for, employing managed service only to handle specific applications. This is the area of joint innovation where the vendor can help the operator accelerate time to market for new services.
Growing service complexity to enable social inclusion
Social inclusion has been a major trend for Africa. However, in the post-pandemic reality connectivity and continuous access to educational and government services become even more significant than before. And CSPs played a very important role here during COVID-19 and afterwards. By preparing their infrastructures for development of such services as remote education and facilitating seamless access for customers, operators contributed to enablement of digital inclusion in the region. This trend won’t go anywhere soon, as CSPs will continue working with regulators and developing their products and offerings to make social services more accessible for subscribers.