Telecommunications companies have an important role to play in Africa as growth accelerators as we seek to bridge the digital divide and build a resilient post-pandemic economy.
The best strategies to achieve this are still being identified, but it is clear that the solution will be a combination of financial investment, infrastructure, expanded high-speed broadband connectivity, and deployment of the innovation for which the telecommunications industry is so well known.
At Delta Partners, we recently conducted research and produced a post-pandemic outlook report for telecom operators, consolidating the expert opinions of around 100 senior telecom executives from around the world.
At the regional level in Africa, the lockdown saw a significant increase in data connectivity. This was due to a clear increase in consumer acceptance of applications such as video conferencing, video streaming, social media, and games. Similar growth in data consumption was seen on the business side, as companies quickly turned to work-from-home models.
It was also significant that, on the business side, clear evidence emerged of pent-up demand for cloud-based solutions. In the short to medium term, it can be safely assumed that reliable, secure and low latency networks will need to be built and expanded.
On the issue of capital spending, while European leaders saw a slowdown in spending after the pandemic, the situation was quite different in Africa. Around 58% of leaders operating in African countries saw the pandemic as an industry accelerator.
Digging deeper into the survey results, on the issue of network models and infrastructure investment, Africa emerged as the region with the highest score, with 83% of respondents expecting a major shift towards exchange models. passive infrastructure and 75% of those surveyed saw an increase towards the adoption of shared RAN.
On the impact of the pandemic on their brands, 67% of respondents in Africa believed that there had been an overall positive impact on their brand due to the quick responses they had been able to demonstrate to reduce anxiety and uncertainty during the outbreak and where they had shown their ability to cope with increased network traffic.
Smart Infrastructure Spending Outlook
At a high level, the telecommunications sector has shown good resilience in most African countries and the survey results point to good prospects for the telecommunications sector in Africa. However, there is a caveat. The success of the telecommunications expansion will depend on the industry taking the right approach to investment, as well as partnerships. This includes the rate at which we build, or reuse, infrastructure on a large scale for greater data connectivity.
A greater focus is needed on the operational and investment aspects of the infrastructure contracting (infraco) parts of the telecommunications business.
With its large youth demographic, Africa will continue to experience high levels of rural-urban migration, and will need to diversify economies to generate growth and provide growth stimuli in other industries. The most effective way to do this is to encourage a shift from commodity-based sectors to the ICT industry.
This will also require an expansion of telecommunications networks. At first glance, investing in telecommunications infrastructure may seem like a daunting prospect and, given the relative lack of investment in infrastructure in most African countries, partnership models can be one way to reduce investment risk and achieve a higher level of success.
For example, the 6.5 million kilometers of roads in Africa can be used to transport telecommunication cables. Likewise, our electrical networks, with cable towers. Even water pipes can carry telecom cables, while street poles can function as 5G base stations.
Teamwork makes the African dream work
Digital inclusion is vital for all African economies. It offers opportunities as an industry in its own right, while also providing the connectivity that can transform legacy industries and equip them for the future. However, building the telecommunications infrastructure to enable can be expensive. Africa will have to invest wisely. Smart investing means working with what we have and creating partnerships.
Public-private, corporate-SME, corporate-community, government-community… All these partnerships will grow in importance as Africa seeks to prepare itself, and its people, for the digital future.
Fortunately, working together is a strongly African mindset. If we can successfully translate this propensity to collaborate in the telecommunications space, using infrastructure sharing and cross-sector partnerships, the digital empowerment of our people could well be the salvation of our continent.
Sharoda Rapeti, a non-executive partner at consultancy Delta Partners. This opinion piece is adapted from his presentation at AfricaCom 2020.