JOHANNESBURG – AFRICAN telecommunications providers have been alerted to the need to adapt to the challenges posed by a new breed of disruptors.
SAP Africa executive responsible for Telco Industry Lead, Mariam Abdullahi, points out since the advent of the internet and the more recent emergence of technologies that include machine learning, internet of things (IoT), cloud computing and predictive analytics, businesses with exponential growth models such as Amazon, Uber, Airbnb and MPESA.
These have entirely transformed their industry sectors almost overnight.
Abdullahi says the African telco market has moved away from improvement to large-scale disruption and transformation.
“Telcos who embark on a process of total business model change underpinned by powerful exponential technologies will be far better placed to withstand and overcome the challenge posed by the new breed of disruptors,” says Abdullahi, who is Telco Industry Lead at SAP Africa.
SAP is a market leader market leader in enterprise application software.
Abdullahi says no industry will remain undisrupted in 2018 and the years to come but for African telco providers, who have feasted on near-uninterrupted subscriber and revenue growth over the past two decades, the need to adapt is paramount.
“African telcos need radical transformation of entire business models in order to become digital supply networks and re-imagine work, resources management, and contingent worker management.”
Executives across Africa and other emerging markets have scrambled to reinvent their business models in the face of shifting customer demands and the arrival of agile, customer-centric competitors.
Airtel Africa merged its Ghana operations with Tigo Ghana and sold off operations in Sierra Leone and Burkina Faso to adapt to rapidly changing market conditions.
South Africa’s Cell-C is seeking investments into fibre-to-the-home providers to enable its diversification into new service offerings including insurance and media.
Kenya’s Safaricom is building on its much-lauded MPESA platform by diversifying into new revenue streams, including Uber competitor Little and e-commerce portal Ma Soko to claim a greater share of its customers’ wallets.
These companies have already felt the effects of declining traditional revenue streams as disruption from the likes of over the top (OTT) players such as WhatsApp, Skype and YouTube put pressure on what was until recently primary sources of revenue.
According to PricewaterhouseCoopers (PwC), many telco operators globally are seeing revenue drop-offs of as much as 30 percent in SMS, 20 percent in international voice and 15percent in international roaming.
Incremental improvements and operational changes are no longer enough, Abdullahi says.
“Those that can adapt to take advantage of technology megatrends such as hyper connectivity, cloud computing, and IoT are far better placed to reinvent their business models.”
– CAJ News