With deregulation and the approval of licenses for more operators, telecommunications markets in Africa are changing dramatically. Operators which once enjoyed a comfortable position in the market, making attractive profit margins, are finding themselves under potential pressure for the first time as competition increases and average revenues per user (ARPU) are on a downward trend.

That's according to Keith Boyd, CEO of Q-Venture, a company formed as a merger between best practice specialist Quintica, and communications infrastructure specialist Venture Communications.
Q-Venture offers managed services for cellular and terrestrial networks based on best practices to improve the profitability of telecommunications operators. The company will operate across Africa and the Middle East.
With falling ARPU comes reduced profitability, making it essential for operators to improve efficiencies in costs to maintain their profitability. "There will be bankruptcies in the telecoms space. While this was a rare possibility in the past, it is becoming a reality with the introduction of disruptive technologies and an increase in licenses," Boyd says.
This, says Charles Osburn, Quintica CEO and Q-Venture CTO, is the value proposition which underlies the merger.
"Telecommunications companies are re-examining their roles. Hard questions have been asked, such as where the value-add of the license holder lies. Is it in owning and operating a network, or is it in owning the customer relationship and providing compelling services on which the customer is prepared to spend money?" he says.
Worldwide trends indicate that successful operators focus on marketing, sales and client retention while the increasingly commoditised network is managed by a third party in accordance with global best practice.
Says Osburn: "The killer app for telecommunications operators is client ownership. This is followed by content, with connectivity (the network itself) being the last."
"Telecoms companies have demonstrated that their business lies in owning the customer; there does tend to be a dearth of best practice, particularly in terms of eTOM, in the operations of many operators across the continent. By introducing this and other best practices for service management, it is Q-Venture's contention that it can improve the performance and critical uptime of cellular networks while simultaneously reducing cost."
Quintica brings to Q-Venture its best practice and service management expertise which spans ISO20000, COBIT, ITIL and eTOM while Venture Communications will draw on its Africa-wide experience in deploying the equipment necessary to establish communications networks.
eTOM (enhanced Telecom Operations Map) is a guidebook, the most widely used and accepted standard for business processes in the telecommunications industry. The eTOM describes the full scope of business processes required by a service provider and defines key elements and how they interact. It is considered a companion to the ITIL (Information Technology Infrastructure Library) framework for best practices for information technology. Similarly, COBIT (Control Objectives for Information and related Technology) is an alternative IT best practices framework, while ISO 20000 is the first international standard for IT Service Management.
The company is gearing up for operations across the African sub-continent, including South Africa, and focusing on the vibrant East and West African markets where competition is fierce owing to the proliferation of telecommunications operators in these territories. It will also leverage Quintica's Midle East presence and reputation to move into these markets which hold considerable promise for the Q-Venture business model.
"There will be no retrenchments as the synergies between the previously separate entities are considerable and the overlap in the companies is in key growth areas. We anticipate strong growth into Africa, especially into Nigeria and East Africa," says Osburn, noting that the market opportunity for Q-Venture's service offering is significant. "This represents the introduction of a new generation of managed services targeted specifically but not exclusively at the telecommunications market."