African telecoms: where next?
Preparing for the next wave in telecoms growth
Africa can no longer be considered the Dark Continent. Given the rate at which mobile connectivity is growing, it seems only natural that the way business is done will change. But how will Telco’s embrace this change and are they even ready for it?
Deloitte has recently completed an in-depth analysis of the market, its trends, and the drivers of it. We are convinced that there will be consolidation in the telecommunications sector and inevitably more inbound investment as the market opens up and the economic returns improve.
Indigenous companies, foreign investors, and global players have all made significant investment into the continent or certainly parts of it. Even governments are waking up to the opportunity to regulate and to auction spectrum and licences. The more enlightened amongst them are also seeing the opportunity to drive economic growth and empowerment through mobile communications and the innovation that it breeds.
While the future shape is still far from clear, we see four potential scenarios:
- Winner takes all as the markets consolidates quicker than most operators can respond;
- Turf wars continue as new and existing operators battle it out for the profitable market and are joined by banks trying to protect their core business against mobile payments;
- New entrants come into the market from adjacent sectors with greater added value than the traditional carriers – foreign media and even advertising groups are viewing telcos as a ready-made channel to market; and
- Owning the hearts, minds, and wallets of consumers is the end goal.
Will telcos, who have laid the foundation for connectivity and access, be the winners; or will it be global technology groups, the banks, media, advertisers or retailer giants?
One thing that has become clear is that a strong brand is not enough.