Mobile moves into enterprise

In Africa, mobile phones quickly found their ways into the hands of many prepaid subscribers, most of them end-user consumers. Depending on the circumstances in various African countries, many of these consumers found it necessary or advantageous to obtain more than one SIM card for their mobile usage. This has had the effect of making the mobile phone/device penetration exceed 100% in many places on the continent. Essentially, mobile operators have sold all they can and then some to the rank-and-file African mobile phone user.

To continue to grow, operators are now looking in earnest at the nascent business enterprise market. With the arrival of widespread telecoms usage in Africa from the mid-1990s forward, mobile operators have represented the lion's share of carriers, with a relative paucity of fixed-line services functioning in isolated urban areas of the continent. Therefore, it has fallen to Africa's mobile operators to provide the enhanced services needed by business enterprises.

This final frontier of business enterprise services includes:

* Wireless connectivity;
* VPN services;
* VPN security; and
* Applications inside the enterprise.

In this instalment of Industry Insights, I will look at how mobile operators are taking the role traditionally filled by incumbent wire-line carriers in other markets. Specifically, I will consider how wireless connectivity is meeting the need to hook up enterprises to themselves, each other, customers and the public network as a whole.

As the world's large enterprises expand their footprints onto the African continent, native small and mid-size enterprises are also beginning to make their presence felt. But, outside Africa's largest cities such as Cairo, Johannesburg, Lagos and Nairobi, the near total absence of legacy twisted pair copper wire phone networks is limiting their expansion ability. And it makes no economic sense to build copper networks now, given the prohibitive cost and obsolete nature of the technology. While fibre is not obsolete, it shares with copper the highly expensive installation price tag - but with a superscript exponent attached to it!

How will all these hardworking people in their office cubicles possibly collaborate with their colleagues at other work locations? That is where the mobile operators come into play.

From their already robustly provisioned macro-cell mobile networks, leading operators are beginning to provide wireless connectivity points of presence (POPs) for these enterprises in the cities, the suburbs and as far into the rural countryside as their microwave backhauls can take them.

First, the most basic service all enterprises in Africa need at their office locations is voice. With mobile phone wireless connectivity, operators can offer a complete suite of telephony voice services to enterprises without requiring large, heavy on-premises infrastructure such as PBXes. In addition to offering traditional voice-based services like direct lines, voicemail, conference calls and fax, mobile operators can go beyond wire-line type functionality to leverage the best advantages of wireless, including SMS, push-to-talk and roaming.

That is one advantage that mobile operators which provide enterprise phone functionality have over wire-line operators: the ability to fully bring wireless features to bear, maximising worker productivity. For example, enterprises are able to use bulk SMSes to communicate with their employees whether they are in the office or in the field, providing near real-time information and feeling of camaraderie - a vastly underrated enterprise value. And the applications for direct marketing to customers are only now beginning to be addressed.

With voice services taken care of, mobile operators are able to devote themselves to the data services in which they were destined to specialise, given the entire world's move into mobile. Integrated packages comprising a cellular phone, a laptop computer and modem enable anywhere/anytime access to the information that keeps enterprises in business. Backed by enterprise solutions such as Microsoft Office, these packages from the mobile operators can keep business development teams on the road doing what they do best - closing deals! Road warriors indeed!

To continue to grow, operators are now looking in earnest at the nascent business enterprise market.

As the leading operators expand into the wireless data services market for enterprise, they will simultaneously look to move into any remaining untapped national markets on the continent. Some of the leading candidates include Ethiopia, where both MTN and Vodacom have obtained licences to offer value-added services (VAS) - which include basically everything except for voice, as a prelude to what many industry observers believe will be a fully competitive mobile operator licensing process. Reports indicate that Safaricom has similar plans in the works. At some point, it seems inevitable that the Ethiopian government will see the light - and dollar signs - and give up its state monopoly.

Across Africa, the leading mobile operators are at the vanguard of the move into the enterprise space. Airtel, MTN, Safaricom and Vodacom have all dipped their toes into the business waters, and to varying degrees, have found the temperature to their liking. Data centres and cloud computing centres of excellence have begun to spring up in Kenya, Nigeria, South Africa and other African countries on the beachhead of business expansion.

They are involved with or likely going to be involved with termination of submarine cable landings dealing with global leased circuits. These global leased circuits belong to some of the largest enterprises on the face of the planet. Across these landed submarine cables, the mobile operators will carry the leased circuits wirelessly to those enterprises' new international business sites in the form of VPN services, as I will discuss in the next Industry Insight on mobile operator services for the enterprise market.