Africa offers unique opportunities for mobile network operators looking for markets where there is growing appetite for cost-efficient connectivity and over-the-top (OTT) services.
This is the sentiment shared by computer scientist and telecoms entrepreneur Peter Gbedemah, adding that Africa has become one of the most enticing global markets in which to do business.
Gbedemah highlights that consumers in Sub-Saharan Africa have stated that affordability is a barrier to mobile Internet adoption. “Mobile data has become more affordable in recent years, but still remains above the 2% monthly income threshold for more than 75% of countries in the region.”
Last year’s GSMA Mobile Connectivity Index showed more than half of the world's population remains offline, with the majority living in developing nations.
Explaining the impact of cost-efficient access, Gbedemah says non-profit organisations like the Praekelt Foundation are able to use OTT services like WhatsApp rather than SMS services to keep costs down.
As a non-profit organisation, the foundation uses mobile technology for social impact and has a means by which it can share life-saving information, he states. “Using SMS consumed over 50% of the programme’s monthly expenses, whereas using WhatsApp helps to keep these costs down.”
Mobile future success
According to Gbedemah, a primary obstacle for the continent’s telecoms industry is the lack of infrastructure.
For example, in 2018, it was reported that only 70% of the continent had access to 3G coverage, with only 34% benefitting from 4G accessibility.
He therefore advises providers to work together if the region’s mobile future is to be a success. “By sharing infrastructure and consolidating their highly-efficient technology, operators can focus on cost-effective mobile delivery which extends to all corners of the continent.
“The evolution of its [Africa’s] telecoms space is unlikely to develop consistently, and mobile operators must look to work together to overcome the challenges associated with delivering new services and upgrading networks.”
Gbedemah founded Gateway Communications, a pan-African telecommunications company, which was later acquired by Vodacom for $700 million in 2008.
He founded the firm upon realising there was a gap for high-quality telecoms in the African market – a region he says a lot of the big players were overlooking.
Over the next decade or so, the company laid the framework for Africa’s communications infrastructure.
Now, Gbedemah assists other tech companies, and is engaged in philanthropy and mentorship. He also served on the board of Junior Africa Achievement Worldwide, which prepares entrepreneurial young people for business, as vice-chairman for 10 years.
Burgeoning talent
Whatever the challenges, Gbedemah believes international players should look to Africa's telecoms industry for investment opportunities.
He lists the pool of talent that is waiting to be tapped into and a thriving start-up ecosystem as the reasons the continent is an attractive destination to do business.
“Sub-Saharan Africa especially is making a name for itself in the start-up industry, with key players South Africa, Kenya and Nigeria having claimed the title of some of the fastest-growing economies in the world.”
Referencing a study, Gbedemah reveals African start-ups raised $725.6 million in 2018 – a four-fold increase in total investment.
“Nigeria, South Africa and Kenya are all home to sophisticated tech ecosystems, but upcoming regions, such as Accra in Ghana, are establishing themselves as viable destinations for investment.
“As emerging markets, the overhead costs are likely to be lower, resulting in investors receiving more bang for their buck.”
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