The telecommunications companies across Africa and
especially in West Africa are increasingly focusing on effectively maximizing
their return on investment from data and on monetizing emerging opportunities
such as the Internet of Things (IoT) to remain competitive and afloat, reports ITRealms.
The research director for telecommunications, media, and
IoT at International Data Corporation (IDC), Mr. George Kalebaila, made this
disclosure, attributing this largely to increasing levels of competition that
is forcing them to seek new methods to stem the steady decline of traditional
voice services via the Average Revenues Per User (ARPUs).
ITRealms gathered that ARPU
also known as average
revenue per unit is a measure used primarily by consumer communications and
networking companies, defined as the total revenue divided by the number of
subscribers over a given period or month.
"We expect to see greater market consolidation as telcos
increase their efforts to acquire smaller ISPs in response to the challenging
marketing conditions," he said.
Kalebaila was particular about telcos operating in West
Africa, saying this has been driven by heightened market saturation, declining
average revenues per user (ARPUs), increasing operating expenditure, and
diminishing profit margins on services.
As such, he said, IDC expects some consolidation within
the market, especially between local ISPs that possess 4G LTE frequencies and
fibre-to-the-x (FTTX) infrastructure and multinational telcos with solid
financial support.
In markets where 4G adoption is already gaining traction,
discussions around fifth-generation network technology (5G) will take center
stage, creating awareness and bringing the possibilities and expectations of
future data networks to the forefront.
"IDC expects vendors to focus on the higher
bandwidth 5G offers and the technology's potential ability to support emerging
services such as IoT, seamless video on demand or Internet Protocol Tv (IPTV),
drone video recording, smart city solutions, and virtual reality
applications," Kalebaila said.
IDC, ITRealms reports also expected 5G to deliver gigabit
connections that enable the seamless delivery of rich multimedia services and
applications.
As competition continues to increase in Africa's more
mature telecom and IT markets, the need to attract and retain customers through
differentiation has become imperative. This means that telcos must move beyond
traditional connectivity offerings and provide IT services such as unified
communications and collaboration, cloud, and datacenter services.
"In the medium to long term, telcos will be forced
to re-evaluate their business models to efficiently design, develop, and
deliver cost-effective solutions and services," Kalebaila said.
He pointed out that this may compel telcos to migrate
from operating legacy networks to deploying agile systems that are capable of
increasing operational efficiency while speeding up the time to market of new
solutions.
“Those telcos that prioritize technologies such as
network functions virtualization (NFV) and software-defined networking (SDN)
for the delivery of connectivity, cloud, and datacenter services will be well
placed to maximize cost savings, achieve greater efficiency, and increase
productivity," he said.
Chuks Egbune/GEE
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