The African telecoms industry has sometimes been mistakenly perceived as lacking the innovation it needs to keep pace with other continents such as Europe and the US. This has mostly been put down to a lack of funding in the region, which has a huge knock-on effect on the telecom services available to consumers.
However, over the last 15 years, traditional telecoms services have become much more available for consumers and at a lower cost. Prepaid cards, direct carrier billing, mobile payments and other innovation have made different African markets role models for similar services around the word – but more on that later. The growing availability of affordable handsets has resulted in an uptake in mobile data plans and consumption. Now that traditional voice and SMS mobile services are more accessible for consumers, operators in the region are turning their attention to other technology such as 5G.
Africacom – past and present
The biggest African telecoms event in the calendar without a doubt is Africacom. Although 2021 will see a fully virtual event take place due to the ongoing global COVID-19 pandemic, here’s what we said about Africacom back in 2015:
Cape Town, 2015:
The theme this year is “Innovation, Transformation & Leadership for Digital Africa” which is a mouthful but clearly points to the speed and scale of telecoms innovation and the vision of 5G on the continent. From the big names, everyone’s eyes are on updates from Google on the Loon front and Facebook on Internet.org.
However, the real action is at the infrastructure and app stands. No longer is Africacom a forum focussing on connecting the unconnected, it’s all about local innovation and developing a roadmap to 5G. Ultra-speed broadband networks, NFV and SDN solutions and m-commerce are the stars. Africa has long shown the world exactly how innovation in mobile money can make a real difference to people’s lives and these lessons are sparking further innovation across Asia and LatAm. Long may it continue!
So, how far has the continent come since Africacom 2015, and what is the telecom industry focusing on in 2021?
The road to 5G
Although 5G is still in its infancy, especially in Africa, significant progress has been made to enable the technology in recent years. The end of 2020 saw Africa launch its first 5G innovation lab – a huge step for the region. A joint venture from Wits, Huawei and rain, the lab offers students the chance to access a live 5G environment and technological applications that can be used in their own local market. The goal is to equip the younger generation with the knowledge to drive innovation and promote social progress across Africa.
Another big story from 2021 is Kenyan mobile operator, Safaricom, becoming the first telco to launch 5G in the East African nation. The operator is trialling the technology for both businesses and individuals and plans to expand and densify 5G sites to more than 150 across nine towns throughout 2021 and 2022.
Although operators in the region are generally optimistic about 5G rollouts, it’s worth noting that 4G and 3G networks will continue to play a critical role over the next few years. The generational technologies need to coexist and work side-by-side to plug the telecom infrastructure gaps that are still present across the continent.
Mobile money boom
2019 was a monumental year in the mobile money space for Africa. For the first time, digital transactions made up the majority of African mobile money flows, which reached $22.6 billion in digital transactions. Diversification of use cases is playing a huge part in enhancing the relevance of mobile money to the African population. Mobile payments are increasingly being used in everyday life, where consumers are conducting transactions for essential services such as receiving salaries and paying utility bills. Credit, savings and insurance are other popular mobile payment use cases that are gaining traction, which suggests that African consumers are pushing beyond the traditional transfers and payments to more sophisticated financial services.
It’s key to remember that a significant proportion of the African population were financially excluded due to a generally informal savings culture – mobile payments is opening the door for these consumers to secure a better financial future.
This also presents a very real opportunity for international investors. In October 2020, US-based digital payment provider, Stripe, acquired Nigeria’s Paystack for more than $200 million. Paystack now processes more than 50% of all mobile payments in Nigeria – if you want to learn more about Paystack’s rise from Nigerian startup to payment powerhouse, read this CNN interview with co-founder and CEO, Shola Akinlade.
Where to next?
As a region, Africa is accelerating its 5G game and the continent is clearly paving the way regarding mobile money. However, it is still way behind other countries when it comes to digital transformation (DX). Fewer than 3 in 10 telco operators in Africa and the Middle East have established a digital transformation roadmap. Yet, African operators have the desire to innovate – they’re willing to invest in DX strategies and recognise the advantages of doing so. To benefit from interoperability between technology and services and maintain an uninterrupted customer experience, African telcos needs to act fast and push DX to the top of the agenda.
African telcos have still got a long way to travel before they’re on par with bigger players in the US and Europe, but progress is steady and promising. We look forward to seeing what Africacom 2021 has to offer!
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