AfricaCom 2015 – Partnerships, Investments and Innovations Hold Key Towards Profitability in Africa

The final day of AfricaCom 2015 focused on sustaining profitably in a rapidly developing multi-cultural landscape. Being cost efficient and sustainable while looking at customer experiences and satisfaction and increasing revenue and the bottom line, seem diametrically opposed, but in fact are some of the key drivers for operators and enterprise alike and are helping to change the telecoms landscape – for the better of everyone.

However, to realize this, the underserved communities across the continent, need to transform into ‘communi-cities’ (rural areas that have the benefits of urban connectedness). This will require continued extensive investment and some nimble future thinking to resolve – several panel discussions and streams on the third day at AfricaCom 2015 provided insight. But is it commercially viable?

The answer is an emphatic yes, as connecting these communities will help eradicate illiteracy (around 30% across Africa), assist in building more inclusive societies and in so doing, achieve the aims of enterprise and society alike – sustained prosperity.

John Bernard, Global Marketing Director at Mozilla, remarked that now there are more players involved in building the infrastructure and connecting communities but mobile phone manufacturers needed to be more involved in partnerships to give access to the Internet through mobile.

From an operator point of view, Vodacom’s Suraya Hamdulay (Executive Head: Group Sustainability), confirmed that the group is looking at how they can create business models that give profitability in the long term but provide value for the community as well. “If in five to 10 years our communities aren’t supported and developed we won’t have customers,” she said. One of the opportunities being explored by a number of players in the telecoms sector is how network infrastructure in remote areas with no access to electricity, can be geared and powered. Solar seems to be the hot favourite for many with its ability to run low consumption devices – mobile phones, lights and even tablets and computers, key learning aids.

Investment and Consolidation - Resonating with the theme from other sessions throughout the week, this panel also stressed the active participation of governments and regulatory bodies across Africa that is needed to advance connectivity. While industry and enterprise are now collaborating and visibly changing their mindset to see the underserved as an opportunity for growth, policy needs to be adopted to facilitate even more partnerships and benefits throughout the value chain.

Working hand in hand with the roll-out of infrastructure and the expansion of the entire telecommunications sector, is the requirement for enormous capital injection. There appears to be an appetite from a number of sources, but understanding what the priorities are for operators and investors will determine which funding model should be applied. These topics and more were debated at a keynote address this morning, the main outcome being that there is an opportunity for all sectors to receive the support they need.

Typically, the current investment areas funders are looking to be involved in are: the range of services they expect will work in the future and infrastructure deployment. However, there are also development finance institutions focused on addressing market gaps: in Africa this means broadband (wholesale, retail, fibre, wireless, infrastructure sharing). In essence, there are many different organisations keen to fund entrepreneurial ventures as well as more established businesses.

However, hampering the process is the observation that “everybody is waiting for the next big thing, something that is going to drive the next wave of services. Some investors are sitting on cash wanting to invest, but are not sure what to invest in,” said Mike Peo, Head: Infrastructure, Energy and Telecoms, Nedbank Limited. Africa also does not have the critical mass of VCs that are seen in the US, making it tougher for start-ups to get ahead, especially if the traditional funding models demand well thought out business plans, often difficult for those without the necessary skill to compile.

Over at the Ericsson AHUB, which has proved a winner in 2015 and a centre for innovation and networking and shared thinking, the conference closed out with the announcement of the Berlin based, Ampion Venture Bus Award to entrepreneurial eMkuyu, which was met with loud cheers.

“This new feature perhaps best sums up the spirit and energy that permeated the entire AfricaCom show this year,” smiled Julie Rey-Gore, Research Director for AfricaCom, “there has been a buzz, a freshness and positive outlook from every quarter that is infectious, and we hope it continues to drive the continent forward, as too the many partnerships and understandings that have been struck here this week.”