Yesterday saw the kick-off of Africa’s largest and leading communications industry event — Africa Com (11-13 November, Cape Town). The event is now in its 17th year and yet the problems facing communication service providers (CSPs) seem to be very similar to those that they have always faced – connectivity, infrastructure and investment. The keynote session was titled Partnerships and Growth, yet a lot of the discussion centered around barriers to growth.
Connecting the unconnected
Africa offers a really great opportunity as it is still a largely untapped market — 80 percent of Africa is still unconnected, making it the second-largest market after India. Chris Daniels, VP of Internet.org, Facebook, discussed Facebook’s passion for connecting the unconnected. Whilst addressing the challenges, Chris also offered a lot of solutions for making this possible, such as Facebook’s solar-powered drone, which aims to not only make connectivity possible but to also drive down costs for both the service provider and the end user.
Chris also clearly demonstrated his commitment to working with service providers and explained the benefit of Internet.org to them. He said that offering access to a number of pages for free (i.e. Facebook) would drive up demand for data services, therefore increasing service providers’ revenue and ARPU.
As well as connectivity and affordability being barriers to getting Africans online, Chris also raised an important point regarding language. With 80 percent of all online content being in 10 languages, how will this relate to a continent with an estimated 1,500- 2,000 languages?
Will more regimes across Africa fall?
Katie Lampe, Head of Sales Operations, Twitter, discussed the role of Twitter in Africa. She highlighted major worldwide events and outlined how Twitter is being used to keep people up-to-date on local news, despite government suppression in some countries.
It really highlighted again the importance of social media and the huge role that it has to play in democratic reform. With 650 million unconnected to be connected plus the potential power of social media, it seems almost overwhelming when first considered. We saw the power Twitter had in the Arab Spring of 2010. Will more regimes across Africa fall with increased penetration and take-up of social media services? I think it is a very powerful question to consider.
It’s still complicated
The relationship between OTT players and operators is still complicated and there doesn’t seem to be any clear agreement on the best way forward in terms of partnerships and business models. The discussion kept going back to the age-old issue of “who will pay for the infrastructure?”. There is no doubt a major infrastructure and capacity in Africa, but operators surely still can’t be in the mind-set of trying to ignore OTT players? Chris Daniels, Facebook, participated in the panel discussion and he again reiterated his early point, that embracing OTT players will create an increased demand for data services, thus increasing operator revenues.
There was some controversy over what Mark Zuckerberg did or didn’t say to operators at MWC in March about them accepting being “dumb pipes”, which of course Daniels vehemently denied. However, one can’t deny the anachronistic attitude that some of the operators on the panel took to OTT players and partnerships.
Taxes are crippling investment and access to connectivity
The panel quickly moved away from the partnership angle and really focused on barriers to adoption and take-up of new services and data. Investment in networks is always going to be an issue but Chris Daniels applauded the investment that operators had made so far. One of the most interesting aspects of the discussion was on taxes, which Ahmad Farroukh, CEO MTN South Africa took the lead on.
Farroukh sees taxation as one of the major issues facing CSPs today, with taxes as high as 50 percent crippling not only investment but also customers’ access to services. For example, handset VAT can be as high as 40 percent and then there are additional duty charges, sometimes as high as a further 18 percent.
Is LTE the answer to delivering broadband across Africa?
The last discussion was regarding effectively delivering broadband in Africa, and although the panelists were different, the issues remained very much the same: Taxation and investment. However, Wei Leping, Chairman, Science & Technology Advisory Committee, China Telecommunications, did add a new flavor to the discussion when he strongly advocated LTE.
Leping sees LTE as the solution to delivering fast, effective and “cheaper” broadband to Africa. Operators have been deploying LTE for some time in Africa, and are undoubtedly already seeing the benefits. I was, however, left unconvinced as to whether LTE alone would be the solution for not only ubiquitous coverage in Africa but also for even starting to make headway into the under-served rural areas.
The keynotes at AfricaCom certainly covered a lot of ground for day one, but one couldn’t help feel that a lot of it was old ground. There still doesn’t seem to be any true agreement, co-operation or commonality between different players in the ecosystem on issues from government taxes, to OTT services, regulators and operators etc. I didn’t get a sense of any collaboration and it looks as though everybody is still operating in their own silo.
Whilst the likes of Facebook might be innovating and launching solar-powered drones, they seem to be doing it in isolation and the operators continue to offer their own services and roll-outs in a similar isolated way. Come on guys, it is time to find solutions and to work together!
Don’t forget to come along to TM Forum [email protected] on Thursday November 13 in the Roof Terrace Room. Lots of great discussions will be taking place on CEM, IoT and IT transformation.