Operators have enjoyed ever-increasing revenue and subscriber growth as the continent’s appetite for the technology has taken off.<\/p>\n
However, 2009 reversed this trend. For the first time, negative subscriber growth was recorded in key markets like South Africa, where connections declined by three percent. Zain, a traditional market leader, reported losses of on average $20 million in all but three of its 15 operations in the region. EBITDA margins for market leaders such as Vodacom, MTN and Zain all decreased and in some cases were negative.<\/p>\n
Speaking today at Frost & Sullivan’s first ICT business breakfast, senior ICT industry analyst Spiwe Chireka highlighted the concerns raised by this turnaround. She addressed the inevitable question of whether this could mark the end of sub-Saharan Africa’s position as a frontier for growth.<\/p>\n
“There are still opportunities for operators to turn this situation around,” she said. “The key thing is that there is a need for new operating models focused on competitive differentiation, cost management and high ARPU and customer lifespan.”<\/p>\n
Frost & Sullivan identified strategies for operators to address these key challenges facing the Sub-Saharan African telecommunications market. Specifically, operators need to find ways to manage intensifying competition, the higher cost of doing business and decreased profitability in the market.<\/p>\n
At the same event, the Head of Network Solutions at Ericsson, Aingharan Kanagaratnam, predicted that there will be 50 billion mobile devices connected globally by 2020. He said that broadband is becoming a basic necessity in today’s information society.<\/p>\n
“Tomorrow’s consumer will expect connectivity in virtually every device they use,” Kanagaratnam explained. “The technology to do this is already available, and connectivity is about to explode exponentially. Soon we will connect our cars, our cameras, our MP3-players, e-books and even our smart fridges. The list is endless.”<\/p>\n
He said that broadband deployment means that communications will go beyond people-to-people communications and will revolutionise not only how we talk to machines, but how machine-to-machine communication works as well. The way our world and societies work is already changing, creating a demand for new value creation.<\/p>\n
“The demand is being driven by the individualisation of products, services and content, resulting in services becoming highly personal and in turn the fragmentation of products and services,” Kanagaratnam said. “This is giving the consumer more choice.”
The changing media landscape means that the power to decide what to consume at which time, and on which device will lie with the consumer. In short, technology is making it possible to empower people in the business of content creation, which means that the media no longer hold all the cards.<\/p>\n
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