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The phenomenal growth of mobile telecommunication has been touted as one of the great investment opportunities on the African continent over the last 10 years, and those who capitalised on it have generally enjoyed a great return on investment. However, as the market matures, telcos across the continent are finding it challenging to stay ahead of the growth opportunities offered by newer technology.
Mobile phones make up 90% of all telephone lines in Africa. Market penetration passed the 65% mark in early 2012, with an annual growth rate of around 20%. However, individual markets are still growing at 50% or more, and others stand at less than half the penetration rate, according to research. The continent’s most advanced markets have passed the 100% penetration mark.

“With the vast majority of Africans having a mobile phone, many previously untapped business avenues are presenting themselves. While companies are increasingly exploring these avenues, the networks themselves are becoming more important,” says Anton van Heerden, GM at Altech ISIS.

“This infrastructure in Africa is already more developed than in many other markets, and with the growth in mobile phone usage, there is an escalating need for telcos to add management capabilities, among other back-end facilities.”

With a new generation of companies willing to relieve operators from this function of their business, the management of back-end systems has enabled further agility for telcos.

Operators have driven the emergence of a unique industry in innovative mobile services in Africa. Mobile value-added services have been launched throughout the continent, and the outsourcing of certain elements of the running of the networks and IT services has allowed these shifts.

However, the skills shortage in Africa has limited the pool of those providers able to effectively partner with telcos in order to enhance their businesses.

“The more advanced markets are standing at the beginning of a second massive growth wave: Broadband services, which, due to the poor fixed network infrastructure in most African countries will again mostly see the mobile network operators as the beneficiaries, although fixed-line telcos also have an opportunity as operators of the required fibre optic backbone network infrastructure, both domestic and international.

“These opportunities are adding pressure to all areas of the network – from infrastructure to billing systems,” Van Heerden says. “At the same time, Africa has a significant shortage of management and specialised skills. Many operators are therefore choosing to partner with companies that are able to provide these skills.”

Altech ISIS’s experience across the continent in assisting its customers to manage these changes has resulted in a growth of its African business, with operators in a number of countries leveraging its knowledge of the African telecoms and business environments. In addition, selecting the right partners to deliver Africa-specific solutions has allowed it to remain competitive.

“Our successes across the continent have provided effective proof points for other companies looking to invest in similar solutions. Our combination of local knowledge and internationally-recognised skills have driven growing interest from African telcos looking to gain a competitive advantage and achieve efficiencies,” says Van Heerden.