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African telco’s need to monetize ‘Internet of Things’ to remain competitive

A leading expert in telecommunications has warned that African telco's need to adapt to the ever-changing information technology landscape in a bid to attract and retain customers in order to remain competitive - in what is already a saturated market.

George Kalebaila, research director for telecommunications, media and IoT at International Data Corporation (IDC) insisted that telco's must move beyond traditional connectivity services and provide modern IT services such as unified communications, cloud and datacenter services. The increasing levels of competition in the sector in Africa have subsequently resulted in some telecommunication organizations to scramble and seek new methods to combat the decline of traditional voice services.

According to Kalebaila, African telecommunication companies have to embrace emerging technologies such as the Internet of Things to keep their heads above water. He said, "In West Africa, we can see a clear trend which 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 telco's with solid financial support."

He also pointed out that 5G technologies is set to take center stage in the region, which takes place in a market where 4G adoption is currently gaining significant traction - discussions around fifth-generation network technology (5G) will create awareness and bring the possibilities and expectations of future data networks to the fore.

He added, "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."

In 2017, telco's are also expected to focus more on 4G monetization and strategies such as enhanced data offerings, service bundling, and partnerships with digital media companies from a content perspective. While the deployment of 4G networks is already gaining traction across Africa, spectrum availability, low customer awareness, low coverage, high tariffs, and the cost of 4G smartphone devices remain key challenges. "Understanding and tracking customer behavior will also help telco's provide personalized and optimized offerings to their subscribers, and therefore help enhance customer loyalty," Kalebaila concluded.