Penetrating the African Mobile Market

by Avi Basu on 23/06/11 at 2:48 pm

Smartphones, 3G wireless connectivity and downloading various apps to your cell phone are all the rage in today’s world. These advanced technological devices can be found in the pocket, on the belt or in the purse of men and women residing in growing mobile markets like those in the U.S., China, India, Europe and Africa.

Seeing Africa’s Potential

In early 2001, Connectiva Systems recognized the potential of the African telecom market. We believed it would become a leading mobile marketplace and began to explore opportunities. Our foresight was on target; from 2000 through 2007, Africa’s telecom sector boasted an average annual growth rate of 40 percent while investment grew 33 percent.¹

Furthermore, increased affordability of mobile phones combined with higher consumer spending power catalyzed much of the region’s telecom growth. Since 2000 alone, Africa gained 316 million new mobile phone subscribers² to virtually skip the computer era and enter the age of mobile. From mobile banking to complex data services, operators were addressing the changing needs of their subscribers while at the same time generating new revenue streams.

Finding the Means to Penetration

Understanding this context, we entered the African market through our client Zain and its subsidiaries in the region, as well as in the Middle East. Focusing our energy first on Zambia, Kenya and Nigeria, we have since expanded into more than 25 other MENA (Middle East and North Africa) countries including South Africa, Egypt, Uganda, Morocco, Tunisia and the Democratic Republic of Congo.

We quickly discovered that African telecom companies experienced 20 to 25 percent in revenue leakage and did not have the internal expertise to manage their revenue streams. To bridge this gap, we developed a customized portfolio of managed services for revenue assurance.

Our goal was to sell outcomes and solutions, not just the technology. We focused on creating and structuring solutions for Africa that fulfilled the continent’s unique, local needs, keeping the growing number of mobile phone users in mind.

While working with African countries, Connectiva Systems has learned that:

50 percent of African families are unbanked and keep their money under a mattress at home. Telecom operators were fast emerging as preferred providers for mobile financial services so Connectiva Systems created solutions that addressed needs around mobile banking analytics.
Africa is not the type of place where you can sell and walk away. It needs local marketing, local relationships and sustained engagement. Connectiva Systems hired local employees with a strong understanding of the cultural nuances in business, instead of flying staff from Europe or India to Africa.
Relative to developed markets, the quality of service (QoS) is still poor and operators require solutions that measure QoS and negative customer experiences. In turn, Connectiva Systems launched solutions that enable operators to understand the end-to-end customer experience, such as number of dropped calls, latency in downloads as well as helping the operator provide consumers with special offers they will want to leverage.
Operators need a much higher level of hand-holding and support as they do not have the internal staff and expertise to manage such systems. Connectiva Systems created tailored managed services offerings for Africa that allowed operators to successfully outsource all their operational analytics activities to the company.

Continued Mobile Growth

Growth is not without its challenges. To succeed, providers must understand the challenges of local operators and subscribers, working to meet their specific needs. But it’s an exciting time in Africa. The country is on its way to reach 100 percent mobile penetration within the next five years, and Connectiva plans to be part of it, every step of the way.

About the Author: Avi Basu is the CEO of Connectiva Systems. Headquartered in New York and with offices around the world, Connectiva has won numerous awards and has been consistently recognized as a thought leader in revenue management.

¹“Africa Calling,” Zakir Gaibi, Andrew Maske, and Suraj Moraje, McKinsey & Company, August 2010

²“Lions on the move: The Progress and Potential of African Economies,” McKinsey Global Institute, June 2010