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Facts / January 26, 2023

The future of telecoms in Africa

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From e-commerce to mobile money, digital innovation has transformed almost every aspect of life in Africa. The telecom industry must seek out new methods to distinguish itself in this exciting new digital era.

Challenges in the African Digital Market

Despite the huge potential, challenges remain that could prevent the digital revolution from benefiting everyone across the continent. These include the high cost of internet services and limited access to reliable and affordable telecommunications networks, which is particularly a problem in rural areas.

Along with a prediction of 1,1 billion mobile connections in Sub-Saharan Africa by 2024, Africa telecoms face three key challenges:

High cost of Connectivity

A recently released study found that half of the top ten countries where mobile data is most expensive to buy are in sub-Saharan Africa. For example, South Africans pay up to $5.29 per gigabyte (GB) of data compared to $1.53 per gigabyte in North Africa and $2.47 in Western Europe.

Now add to the mix the prevalence of people earning the minimum wage in SSA, and that gigabyte of mobile data equates to around four hours work.

These exorbitant data prices contribute to the widening “digital divide between the world’s internet haves and have-nots” – an issue which threatens the stability of the region.

Limited Access to Rural Areas

Although not exclusively an African phenomenon, rural areas are particularly lacking in internet connectivity.

The difficulties associated with accessing these areas increases the costs involved. But with a small population pool, the ROI is low for ISPs. It is just not monetarily feasible to invest in such hard-to-reach places.

Dilapidated Infrastructure

Did you know that in 2021 approximately 597 million people in the sub-Saharan Africa region still did not have access to electricity? (With up to 70% of the related rural population living without electricity connections.)

Even with the best intentions to activate telecoms, progress is continually being undermined by poor infrastructure. The crippling energy crisis affects not only telecoms in South Africa and its neighbors, but the economy as a whole.

These challenges are not insurmountable, and many African governments are investing in digital infrastructure to create an environment that supports the growth of digital services.

Developing Telecom in Africa

Regardless of all the barriers, Africa is home to some of the most established telecom providers in the world. The sector can have a big impact on the economy and society of every SSA country.

A four-pronged approach will help to protect and grow the industry’s stake in the economy:

Focus on Customer Engagement

Despite – or maybe even because of the elusiveness of reliable connectivity – SSA customers demand experiences that are seamless, high-quality, and personalized.

With clever use of the data telecom companies can gather about their customers, these demands can readily be fulfilled. Doing so has the knock-on effect of increasing client retention and customer lifetime value, while reducing the expense of acquisition and service.

Extend Revenue Streams

Technological innovation is transforming almost every aspect of life in sub-Saharan Africa. Digital services, IoT, and new ways of communicating with VR/AR all provide opportunities to compete in a new telecoms market.

Actualize Alternate Connectivity

The progression of the internet depends upon a network architecture that allows for the integration of different technologies and additional spectrum bands.

Switch to Digital Innovations

As actress Lauren Bacall noted, “Standing still is the fastest way of moving backwards in a rapidly changing world.”

To make innovation financially viable requires a new way of thinking – from joint initiatives that share risk to creative new customer solutions.

Get in touch with AFR-IX Telecom today if you’re looking to invest in an internet service provider that delivers telecoms and connectivity solutions in Sub-Saharan Africa.