“The dominance of the mobile screen may put in play applications in Africa that have been unsuccessfully attempted elsewhere around the world. Telenity is also concentrating on enabling applications specifically targeting users in Africa whose Internet experience is governed by their experience on the mobile phone. ”
Mobile operators around the world have turned to value added services in an effort to generate new sources of revenue and cope with diminishing returns arising from intensive competition and lower tariffs on basic voice services. The competitive pressures are no different in emerging markets like Africa.
Africa is an exciting market with vast untapped potential for mobile services, which according to industry analysts will see a regional mobile penetration rate of just 62.4 percent and a subscriber base of 911 million by end-2014.
Africa brings together a variety of cultures and demographics with low income levels and markets with varying levels of regulation. Majority of the population lives in rural areas where traditional fixed-line service does not exist or is very limited. In the past, the lack of appropriate infrastructure has caused African mobile markets to lag behind advanced regions. However, the introduction of mobile services is changing the telecommunications landscape and the lives of millions of new subscribers in Africa where many of them are finally gaining access to their first means of reliable communications. Most subscribers are just using basic voice services and a few voice-based value added services where ARPU levels are considerably low. To maximize their revenues and lift the downside pressure on their ARPU, African mobile operators are now exploring ways to optimize their network operations and focusing on enhanced voice and data-based value added services such as mobile collect call and personalized call management solutions which help monetize unanswered calls; location based charging or people tracking which help decrease churn and increase loyalty.
For the “Maximizing Revenue: Value Added Services” article in the African Wireless Communications Year Book 2010 (AWCY), Arkif Arsoy, Vice President of Marketing and Product Management responded to the following questions:
AWCY: What have been key developments for Telenity in Africa during 2009?
Akif Arsoy (AA): Over the past year, Telenity concentrated on voice-centric value added services solutions in Africa. The deployment of our mobile collect call solution, marketed under the product name Canvas® PayForMe™, led the way. An addition to our portfolio in 2009 was the Canvas® SmartConnect ™ product, which helps monetize a percentage of the unanswered calls in the mobile network that otherwise generate no revenue for the service provider. In 2009, Telenity served its customers in the region primarily through a concentration around voice-centric services.
AWCY: How does Telenity see the wireless communications market adapt and evolve in Africa in 2010?
AA: The African telecommunications market continues to attract mainstream press coverage that highlights its growth potential. While that remains true, after a decade of successful launches in the continent, the level of competition is far more developed. Furthermore, service providers have been acquiring lower ARPU subscribers lately, adding downside pressure on their overall ARPU. Causing greater difficulty is the relatively weaker track record of non-voice services in Africa despite the absence of a competitive IT infrastructure outside of the mobile networks.
Service providers have responded in several ways. Some have begun to explore means to optimize network operations via methods such as hosted and centralized services. This is especially promising for service providers with operations in multiple countries. Removing the national boundaries of mobile networks is seen as a cost saving topology change. Another and common response by operators has been a perception that their market is mainly about voice and will remain so for the considerable future. This perception has resulted in lower tariffs which promoted price based competition at the expense of premium services. Finally, operators are now much more selective and careful about value added services.
AWCY: What are the challenges in Africa for 2010?
AA: As the wireless communications industry enters a new decade, greater competition and reduced pent-up demand as compared with the early years may push ARPU levels down. It may prove difficult to grow or even maintain revenue and profits despite the still present unserved segment of the population. Service providers will look to add non-voice revenue through new data centric value added services. But finding the right VAS applications that make a difference and impact on their revenues will be challenging.
AWCY: Plans for the continent over the next 12 months
AA: Telenity’s plans are based around further penetration of the company’s mobile collect call solution as well as introducing solutions for increasing call completion rates that go beyond standard voice mail applications. We are also keen on leveraging our location-based services such as friend finder, child locator and location-based charging deployed elsewhere in the world. To lead the way for Telenity, we are focusing on location-based security solutions.
The mobile screen has strong competition in other regions but remains the dominant method for subscribers for personal Internet access. The dominance of the mobile screen may put in play applications in Africa that have been unsuccessfully attempted elsewhere around the world. Telenity is also concentrating on enabling such applications specifically targeting users in Africa whose Internet experience is governed by their experience on the mobile phone.
To complete our product portfolio prioritized for Africa, we are offering our VoiceSMS solution that is a preferred tool for some consumers and sometimes the only tool for others due to reasons of illiteracy or alphabet-induced problems. New tariffs that help increase minutes of use in Africa will result in capacity expansions for some core network elements such as the Short Message Service Center, where Telenity has established and mature products.
Last modified onSaturday, 06 May 2017 10:07
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