Official publication:
Market Overview
Record breaking attendance at GSM 3G East & Central Africa 2007
Safari Park Hotel, Nairobi, 16-17 May 2007
440 telecom professionals from 28 countries gathered in Nairobi last week for GSM>3G East & Central Africa Conference & Exhibition 2007, the premier annual meeting place for the telecoms community in East & Central Africa.
Featuring 43 exhibitors and over 40 speakers (including over 20 international and regional CxOs) and, this 2-day event focused on all the leading issues of supreme relevance to the East & Central African market. Topics included international investment, network expansion, technological evolution and raising ARPU in an increasingly competitive market.
On Day One, the conference began by determining strategies to further market growth. As Vitalis Olunga, Chair of GSM Africa, explained, despite the fact that there are a total of 120 operators across the continent, Africa still holds the lowest penetration in the world, with only 22.32% penetration in Q1 2007. However, as Thecla Mbongue, Research Analyst for Africa at Informa Telecoms & Media remarked, the opportunities for East & Central Africa here are greater than in any other African market, with the three most populated countries - Ethiopia, DR Congo and Sudan still holding penetration rates of less that 10%.
No wonder, then, that the region is becoming so attractive to external investors, receiving a great deal of interest lately from international companies such as MTC, Reliance Telecom and Orange Group. In a one-to-one interview with the Chair, Marc Rennard, Orange Group's Executive Vice President and Head of International Operations for Africa, the Middle East and Asia, agreed that the potential for the region was great. Yet regulators should be careful not to overly inflate the cost of licences, he warned, as the market will only be attractive to investors if offerings are pitched at an appropriate price. But in contrast to this, in a lively panel discussion later that morning, Patrick Masambu, Executive Director of Ugandan regulatory authority UCC, commented that projects such as extending access to underfunded areas just wouldn't be possible without operators' contributions. So charging operators for licences should not necessarily be perceived as negative.
In an exclusive CEO interview session on the morning of Day Two, Michael Joseph, CEO of Safaricom, Kenya, and Noel Meier, CEO of MTN Uganda, debated varying techniques for obtaining and maintaining the leading market share. Safaricom credits its success in Kenya to building its reputation as a truly 'local' operator, holding a direct relationship with the local community. As well as utilising young, creative local talent to produce local content, they also operate an extensive Corporate Social Responsibility (CSR) programme. By contrast, MTN Uganda's identity is far from local, being part of a multinational group spanning sub-Saharan Africa. However, extra funding from the Group has enabled them to establish an enviable QoS through massive investment in network infrastructure, undoubtedly contributing to the company's success.
So is it better to be local or international? What is the magic formula for winning over subscribers? Noel Herrity, CEO of Zantel, Tanzania, argued on Day One that honesty, good-humour and low prices are the key. But Michael Joseph also observed the power of "the chemistry between brand and subscribers". Even if it's impossible to put your finger on exactly what works, if you find a successful formula, don't change it!
Community and Social Responsibility was particularly high on the agenda this year, with many operators keen to contribute to society and give back to the community of which they are a part. Themba Kumalo, CEO of MTN Rwanda, highlighted the company's use of mobile technology in a pioneering project as a distributed surveillance system for hospitals in co-ordination with the World Health Organisation. Joseph Ogutu, Chief Corporate Affairs Officer of Safaricom, presented their 'Schools Project', using mobile networks to provide internet access to pupils across the country. It was clear that community involvement poses an excellent way for operators in East & Central Africa to leverage their presence in the local market and further increase public trust.
Yet while CSR is important, it is not the only factor which operators need to focus on. As many agreed, what people really need is coverage. Yesse Oenga, Managing Director of Celtel Uganda, observed that infrastructure and QoS undoubtedly hold the key to future subscribers, saying, "it is time we invested aggressively to improve coverage". There is still a long way to go before mobile reception across the region is fully optimised, and without sufficient infrastructure and constant electricity supplies in rural areas, operators need to look for innovative ways to optimise networks and lower the cost of maintaining existing systems. One such emthod was put forward by Rebecca Mayer, Program Officer from Winrock International, USA. As she pointed out, by turning to rural independent power producers to provide clean, renewable energy systems as an alternative to diesel (such as solar and wind power), operators have the potential to lower the cost of maintaining each base station by between US$200 and US$400 a year, whilst contributing significantly to rural economic development.
On Day Two, the GSM Association also hosted an exclusive HSPA Seminar, in which leading exponents of HSPA systems such as Ericsson, Huawei and Microsoft demonstrated how the technology might increase data speeds and potentially offer a means of providing wireless internet access for subscribers. The only consideration which needs to be taken into account, however, is that as much of the rural population lack the means to easily recharge HSPA-enabled devices, this facility is likely to remain in the domain of high-end subscribers, at least for the foreseeable future. HSPA trials have now begun in Kenya and Tanzania.
The final theme for discussion was methods for increasing ARPU. Eltayeb Mukhtar from Sudan highlighted the ways in which SMS applications are increasingly being utilised by operators to raise greater revenue and provide new services for customers. Michèle Scanlon, Principal Consultant from Green Giraffe Communications, South Africa, emphasised pricing structures to heighten customer loyalty and to encourage the utilisation of VAS data. Stéphane Boyera from the World Wide Web Consortium also highlighted the monetary potential of mobile internet, given that much of the region does not have access to the web through any other means.
Overall, GSM>3G East & Central Africa 2007 demonstrated that the region is set for a profitable time ahead. With operators keen to pull together on issues such as interconnection and low-cost roaming across borders, and calls for regulator alliances between countries to establish a united telecom regional body, there is significant potential for telecom community to grow together as one. In this strengthened economic position, East & Central Africa will then be best-placed to benefit from the opportunities presented by external investment, low penetration and mass demand.
DATES FOR YOUR DIARY:
GSM>3G East Africa 2008 takes place at the Safari Park Hotel, Nairobi, Kenya on 21-22 May 2008.
