In an interview aimed at taking a deep dive into the current African telecoms landscape, IT News Africa spoke to Derrick Gross the Vice-President of Business Development at Alepo, a technology solutions provider.
Alepo looks to make next-gen data opportunities a reality by making advanced software solutions and services that enable global communications service providers to accelerate revenue growth, market share, and business success on next-generation fixed and mobile broadband networks. For over a decade, Alepo has been the go-to technology partner for “all things data” at leading service providers like Orange, Saudi Telecom, and Digicel.
Established in 2004, Alepo provides solutions in advanced policy and charging control, convergent charging, and billing, device management, BSS / OSS, WiFi hotspot monetization, WiFi offload, and AAA infrastructure. In addition, Alepo provides expert professional services: systems integration, consulting and design, training and support, managed services, and more.
Derrick Gross, VP of Business Development at Alepo, is in charge of partnerships, operations, and customer relations. He has experience leading BSS/OSS projects in LTE networks for Alepo’s customers around the world, including the definition and delivery of core policy, charging, and control elements.
IT News Africa spoke to Derrick about African telecoms trends, challenges and opportunities whilst also focusing on the effects of IoT and the role that governments need to play in the evolving telecoms industry.
What do you see as the biggest telecoms trends on the African continent?
Africa is an emerging market with enormous potential. Despite ongoing economic challenges and some complex regulatory issues, Africa is fast approaching the 1 billion mobile subscriptions landmark. The telecommunications market has proven to be a success story over the past 10 years, with all regions on the African continent experiencing rising mobile and broadband penetration rates.
Growth of data consumption is staggering in Africa. With LTE being relatively new compared to other parts of the world and increasing penetration of smartphones, operators are looking at ways to monetize this trend, which has unique challenges from other parts of the world. With low ARPU and fierce competition, operators in Africa are constantly dealing with pressure to reduce the cost of data and significantly increase agility and speed of the services they are providing.
One way companies are looking to reduce costs and streamline operators with is to priortize NFV and SDN for delivery of connectivity, cloud, and datacenter services. The communication service providers in Africa are walking a fine line having to balance the needs of providing higher quality and feature rich network services while maximizing return on their network investments.
The trend of telecom consolidation is also picking up pace in Africa. Operators are acquiring and merging with each other. Telcos are also increasingly acquiring smaller ISPs in response to challenging operating conditions. Pan-African telecoms group Liquid Telecom, a subsidiary of Econet Global, has acquired ISP Startel Tanzania, which offers services under the brand name Raha. Africa’s largest mobile group, MTN acquired Investcom Limited which owned Scancom (GH) Ltd. And others like Orange and Airtel are making various moves around the continent by entering and exiting through acquisitions and mergers.
What do you see as the biggest challenges to the telecoms industry in Africa?
The combination of slowing subscriber growth rates and reducing ARPU levels is making revenue growth challenging in an increasing number of African markets like Nigeria, Sudan and Ethiopia.
As the competition intensifies, the prices decrease, but the cost of providing the services remains the same which directly affects the revenue and profitability of the operators. Customer expectations are very high with respect to price and speed, and operators must meet these expectations with a range of technical and operational innovations which will be challenging.
From an operator point of view, the main challenge is to launch complex data plans in real time. Telcos are constantly looking for a solution that has a faster time to market and rapid service innovation that includes new competitive data offers and innovative promotions. They are keen on creating a sophisticated and personalized online customer experience to win market share and reduce churn. Operators want to rapidly implement the new solution with zero downtime or impact on existing services.
How is Alepo helping to overcome these challenges?
With Alepo’s data monetization solution, global communications service providers can increase their ARPU and reduce churn. Our solution enables a rich, digital shopping experience for new mobile data services along with rapid service innovation and popular ready-to-launch mobile data plans like shared family data, international data roaming, flexible prepaid and pay-as-you-go offers, data rollover, recharge promotions, loyalty rewards, social media app passes, and sponsored content.
We view Africa as a strategic region for us. It is an evolving market and therefore opens a scope for innovation. In the next 5 years, we see ourselves as being the technology vendor driving the successful transition and deployment of advance communication services on the continent.
What role should government play in developing the telecoms industry in Africa?
There are distinct differences between fixed and mobile regulations in most African countries. The fixed services are categorized by tight regulation and a small number of players. Whereas mobile markets are much more deregulated and competitive, with multiple companies with often a high degree of overseas ownership.
Governments should nurture this global investment through open and competitive spectrum auctions. Governments should also understand that operators have to maintain an appropriate return on capital and it should be mindful of the cost of spectrum.
As there is growing support for tower sharing, governments should favor the sharing of infrastructure as it increases mobile connections and removes the need for competing towers to be built close to each other.
Across Africa, telcos and ISPs are connecting with each other to give customers reliable and accessible services at low cost. Recognizing how rising telecom penetration is fueling the economic growth and social development, African governments should work with each other to build a digital mobile revolution and open up regulations for other services like ecommerce and mobile money.
Do you think Africa is ready for IoT?
Internet of Things (IoT) is going to become the next big trend in certain African markets. It can transform businesses across sectors including, manufacturing, mining, automobile, medical, public safety, transport and utilities. In 2018, we will witness IoT as a key driver of transformation wherein more and more industries will become a part of this IoT landscape.
Africa is at a pivotal moment in its technological revolution. By quickly capitalizing on its lack of legacy infrastructure, the continent has an opportunity to leapfrog other countries to connect its people, places and things. The faster this happens, the sooner its businesses can build competitive advantage on the global stage.
While Western governments focus on repurposing and in some cases overhauling legacy IT infrastructures to seize the IoT opportunity, Africa has the agility to start fresh and establish an infrastructure robust enough to support the current and future mobile, cloud and big data needs of its population.
What are the biggest opportunities for telecoms companies in Africa?
With a continent-wide mobile penetration rate of over 83%, Africa is well-poised to take advantage of the immense socio-economic and technology benefits of the digital transformation of our economy.
There are immense opportunities and possibilities in the telecom market in the region ranging from monetizing data usage and mobile money, to partnering with OTT players and NFV. African telcos have an opportunity to benefit from more complex solutions that require strategic partnerships with device manufacturers, value added service providers, healthcare companies and others.
Operators will need to navigate and create new revenue streams to replace traditional voice income streams. The emergence of big data is likely to be one of the biggest tools. Building on that through real-time analytics that allows for better decision-making, and enabling a deeper level of personalization that opens the door to new digital service offerings would give telcos the opportunity to transform their business models.
By Dean Workman