Re-strategize To Stay Alive, IDC Tells Telcos

As competition continues to increase in Africa's more mature telecom and IT markets, the need to

attract and retain customers through differentiation has become imperative. This means that telcos

must move beyond traditional connectivity offerings and provide IT services such as unified

communications and collaboration, cloud, and datacenter services. This is the view of premier global

provider of market intelligence, advisory services, and events, the International Data Corporation

(IDC).

Expressing this view research director for telecommunications, media, and IoT at IDC, George

Kalebaila disclosed that in the medium to long term, telcos will be forced to re-evaluate their

business models to efficiently design, develop, and deliver cost-effective solutions and services.

“This may compel telcos to migrate from operating legacy networks to deploying agile systems that

are capable of increasing operational efficiency while speeding up the time to market of new

solutions. Those telcos that prioritize technologies such as network functions virtualization (NFV)

and software-defined networking (SDN) for the delivery of connectivity, cloud, and datacenter

services will be well placed to maximize cost savings, achieve greater efficiency, and increase

productivity.”

Kalebaila further noted that IDC expect to see greater market consolidation as telcos increase their

efforts to acquire smaller ISPs in response to the challenging marketing conditions, particularly in

West Africa. He said this is being driven by heightened market saturation, declining average

revenues per user (ARPUs), increasing operating expenditure, and diminishing profit margins on

services. “As such, IDC expects some consolidation within the market, especially between local ISPs

that possess 4G LTE frequencies and fibre-to- the-x (FTTX) infrastructure and multinational telcos

with solid financial support."

The research firm also pointed that due to increasing levels of competition that is forcing them to

seek new methods to stem the steady decline of traditional voice services, telcos across Africa are

increasingly focusing on effectively maximizing their return on investment from data and on

monetizing emerging opportunities such as the Internet of Things (IoT) to remain competitive and

afloat.

idc-logo

Kalebaila says that telcos that take concrete steps to transform themselves internally will be best

positioned to survive digital disruption. "The key focus areas in 2017 will include business model

transformation and network efficiency improvements using so-called '3rd Platform' technologies,

namely cloud, big data, mobility and social business."

"Furthermore, going forward, we expect to see remarkable growth in financial services platforms

like mobile money and breakthrough emerging technologies like IoT, in a bid to drive the release of

APIs by telcos to the developer ecosystem. This will allow telcos to harness innovative and localized

solutions."

Before they can become digital transformation partners to their clients, telcos will first need to

harmonize their internal IT environments with external-facing IT systems and become digital

providers to their own internal business functions. "By streamlining, optimizing, and modernizing

their own IT environments, telcos can leverage the lessons learnt internally to optimize customer

service and experience to their external clients," says Kalebaila.

He adds that telcos need to identify their key challenges, prioritize the development of unique digital

transformation strategies, and implement a phased approach to digital transformation. "For

example, Telcos can use big data technologies to upsell and cross-sell services, design new products

and services, or create new revenue generation streams from existing customer data assets," says

Kalebaila. "Understanding and tracking customer behaviour will also help telcos provide

personalized and optimized offerings to their subscribers, and therefore help enhance customer

loyalty."

Leave a Reply

Top
%d bloggers like this: