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African telcos eye emerging opportunities to stay afloat: expert

NAIROBI (Xinhua) -- Telecommunication firms (telcos) across Africa are maximizing their return on investment from data and on monetizing emerging opportunities such as the Internet of Things (IoT) to remain competitive and afloat, experts at a global research firm said on Tuesday.

George Kalebaila, research director for telecommunications, media, and IoT at International Data Corporation (IDC) said this is due to increasing levels of competition that is forcing them to seek new methods to stem the steady decline of traditional voice services.

“We expect to see greater market consolidation as telcos increase their efforts to acquire smaller ISPs in response to the challenging marketing conditions,” Kalebaila said in a statement released in Nairobi. 

He said market consolidation which is mainly in West Africa is being driven by heightened market saturation, declining average revenues per user (ARPUs), increasing operating expenditure, and diminishing profit margins on services.

“As such, 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,” Kalebaila said.

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 IPTV, drone video recording, smart city solutions, and virtual reality applications,” said Kalebaila.

“We also expect 5G to deliver gigabit connections that enable the seamless delivery of rich multimedia services and applications,” he said.

Kalebaila said that telcos that take concrete steps to transform themselves internally will be best positioned to survive digital disruption.

“The key focus areas in 2017 will include business model transformation and network efficiency improvements using so-called ‘3rd Platform’ technologies, namely cloud, big data, mobility and social business,” he said.

According to IDC, 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, the expert said, means that telcos must move beyond traditional connectivity offerings and provide IT services such as unified communications and collaboration, cloud, and datacenter services.



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