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What technology trends are going to be relevant for Africa in the year ahead?
Frost & Sullivan looks at the technology landcape from an African perspective, what it actually means for the market in its application and the wider implications in its development and deployment.

Naila Govan-Vassen: senior industry analyst: Africa ICT, points out that Africa’s communication services market, while not yet at saturation point, is approaching maturity. This is particularly true in urban areas of some of the relatively more advanced telecoms markets, like South Africa and Mauritius.
The real challenge is to increase the connectivity reach into less densely populated areas, the urban and semi-urban areas. Government involvement is, therefore, critical to the success or failure of ICT infrastructure deployment.
Mobile Internet is relatively expensive for the majority of citizens on the African continent; even higher LSM subscribers only use mobile Internet when not connected to fixed wireless. So how can a citizen in the lower LSM afford mobile Internet connectivity plus monthly data and a smartphone?
The pressure is on for government, as it needs to have a clear vision and understanding on how ICT can benefit its citizens, the country and the economy. Government needs a realistic road map on how ICT infrastructure needs to be deployed. And there is also a clear need for government to collaborate with the experts on the industry – from the regulators to MNOs and OEMs.
2017 is expected to be the year where sound ICT plans need to be developed, that serve as a guideline to investors and other ICT stakeholders. In the case of South Africa, there are solid plans for Broadband; however there is a lack of guidance as to whom, how and when the plan will be implemented.
In addition, the release of spectrum; re-farming of existing spectrum; facilitating Public Private Partnerships (PPP); creating internet demand; addressing power supply challenges (as a measure to reduce the opex to run base stations outside the power grid); and understand the benefits of digitally empowering citizens are some of the immediate actions to be expected from African governments.
Countries such as Rwanda, Kenya, Nigeria, and Uganda are expected to experience positive benefits from an increase in the connectivity reach. Political will and collaboration with the relevant stakeholders have been the key driving forces behind their success. Countries on the continent need to leverage from one another’s expertise and achievement factors. Regional collaboration will be a key trend expected to influence the industry in 2017.

Blockchains, not bitcoins:
George Etheredge, research analyst: ICT Africa, says the past year (2016) saw a dramatic decrease in the hype surrounding bitcoin and blockchain technologies. Venture capital investment in blockchain start-ups fell by 17% from 2015. Frost & Sullivan believes that a similar trend will occur in 2017.
However, this does not mean that there will not be activity in the blockchain market.
We expect that, in 2017, firms will focus on core blockchain and blockchain-like technologies, rather than on their applications to crypto-currencies. It must be noted that blockchain like technologies essentially provide a mechanism by which the authenticity of a digital asset can be verified. Naturally, crypto-currencies would be a non-starter, if not for this fact. Bitcoins could simply be duplicated, rendering them immediately valueless.
In 2017, firms will explore other applications where the verification of digital assets is required. An example here is in anti-piracy where the authenticity of media files could be verified using blockchain-like technologies. Similarly, blockchain is expected to be used to develop ‘smart’ contracts, automatically verified by virtue of the blockchain.
Although all banks in South Africa claim to be investigating blockchain technology, it is unlikely that anything will come of this in the near future. Banks have very little motivation to change their operating models unless incentivised to do so by external factors. I believe it may be possible that banks will guard their blockchain innovations to use as a weapon against disruption in the near future.

IoT in 2017
Deepti Dhinakaran, research analyst: ICT Africa, is convinces that Africa will take the lead in the Internet of Things (IoT) in 2017. The technology will not only disrupt but also serve as a key driver to the growth and development of the African ICT market.
The African IoT market is currently in its early growth stage, driven by the need for increased business efficiency and productivity. South Africa has the most developed IoT market in Africa, followed by Kenya and Nigeria respectively. Fleet management, retail, energy, security and surveillance, and manufacturing verticals will see an upward growth trend in respect to the use of IoT services during 2017.
While most providers focus on the aforementioned verticals as these offer higher profit margins, solutions that address regional challenges – such as agriculture, mobile health (mHealth), and wildlife conservation – will grow steadily, with a view of improving the quality of life in Africa. Amongst horizontals, analytics, platforms, and low-power consuming sensors and hardware devices will show huge growth opportunities.
2017 will see a large number of the IoT applications that currently run on 2G networks, shift to 3G networks. The adoption of LPWAN connectivity technologies will grow significantly, driven by the need for increased speed, longer range, and higher power efficiencies.
IoT providers across verticals will leverage their in-house and acquired capabilities to benefit from the platform and software application services segments, given their higher value potential. International providers will increasingly follow an indirect business model in countries like Kenya and Nigeria as this ensures cost-effective operations and the sharing of risk with local providers, owing to the importance of local partnerships in these IoT markets.
Strategic partnerships and acquisitions will be key to accelerate growth in the IoT market. This will assist providers to expand the partner ecosystem, while emerging as end-to-end IoT solution providers. Partnerships are primarily driven by the need to develop a competitive advantage in scale; while acquisitions are made to acquire technology and talent.
Telecommunications service providers will continue to leverage their connectivity expertise in 2017, while trying to evolve as end-to-end vertical solutions providers, developing capabilities to provide post-sales support across the entire value chain.

VoLTE and VoWiFi
According to Lehlohonolo Mokenela, industry analyst: ICT Africa, having witnessed slowing growth of voice and messaging revenues in recent years, mobile network operators are turning to WiFi and LTE networks to fight off the threat posed by over-the-top (OTT) applications.
Voice over WiFi (VoWiFi) and Voice over LTE (VoLTE) are becoming accepted as the next generation of mobile communications services. The packet-based solutions are an improvement on the circuit-switched predecessors – in terms of quality, functionality and cost. These technologies will offer high definition voice services, faster call connection and a seamless switchover from voice to video.
Globally, leading operators like Swisscom are not only launching their own VoLTE and VoWiFi solutions, but are also looking to combine the two. The long-held view of WiFi as a rival to operator data services is fading as operators increasingly turn to the technology to boost indoor coverage. Combining it with their cellular networks, particularly in the dark spots of the LTE network coverage is a natural fit, especially when they are able to monetise the traffic on WiFi networks and improve customer service.
There is growing evidence that South African operators are building their mobile communication strategies around the technologies, with Cell C and Vodacom launching VoWiFi services in 2015. In 2017, the market is expected to witness a lot more focus on VoLTE and VoWiFi by local operators; however, the release of spectrum is central to the development of VoLTE services. Given the sensitivity of subscribers to the quality of voice services, operators will be best placed testing the stability of their VoWiFi and VoLTE offerings.

Video on demand in the sporting sphere
Laura Caetano, research analyst: ICT Africa, points out there is a lot of buzz around “sport-on-demand” and its potential through video on demand (VOD). We believe, however, that there are fundamental hurdles to overcome before this market will see significant growth.
As subscribers are becoming increasingly dissatisfied with having to pay high Pay TV subscription fees, the door is opening for VOD for sport. There are numerous benefits of truly digitising sports such as bringing attention to the lesser known sports that are generally not given any airtime, and its use as a vehicle to promote local sports, especially where smaller leagues are concerned.
An important factor that many are turning a blind eye to are broadcasting rights – their cost in particular. Big players in the pay-TV market, such as MultiChoice, can afford to buy broadcasting rights for a range of sport, making it worthwhile for their clients to subscribe. This poses a significant barrier to those trying to enter the VOD sport market but do not have the capital to outbid MultiChoice.
The high cost of data is an additional barrier to entry and the potential of VOD for sport will not fully be realised in Africa until data is more affordable to the masses. Until then, people will retain their Pay TV subscriptions as it offers them more value for money, especially if they have broadcast rights for popular league matches. These hurdles create the opportunity for companies to come up with innovative ways to overcome these barriers to entry, whilst simultaneously building their key value advantage in the market.

MNOs and content proliferation
Mauritz Venter. research analyst: ICT Africa, comments that MNOs are expected to focus on optimising data based revenue streams by promoting bandwidth intensive functions.
This will require an increase in bandwidth intensive content generation, or acquisition by MNOs and telecommunication firms, and can be expected to act as a differentiating factor especially as pricing and connection speeds are expected to converge in the market. As a result, we expect a growth trajectory in content-based services like MTN VU.

Point of sale (POS) systems
According to Tumi Sankoloba, research analyst: ICT Africa, cloud-based POS systems are beginning to gain momentum in Africa as SMEs are realising the benefits of their use.
SMEs are tasked with having to achieve cost efficiency with lower cost margins and staff at hand. Growth in developing economies is being driven by small to medium sized businesses, but these businesses struggle to accumulate the capital necessary to purchase a traditional POS system and predominantly still deal with cash only.
Innovative POS systems, such as YOCO, are eliminating the red tape (for example: long term agreements, lengthy set up) associated with traditional systems and digitising merchants that had previously not had POS systems offerings scaled to their business needs.
Cloud-based solutions also have the added benefit of being flexible enough to integrate with additional software to enhance the system. For instance, Tiller Systems has gained traction among merchants in French speaking African countries, and has a variety of partner tools which may be added to the core system. These include stock level monitoring, sales tracking functionalities, payroll management and viewing real time performance metrics. These solutions are helping SMEs leverage technology to operate efficiently and grow their businesses.
Large retailers are also making strides in digitising their experience. Recently, Pick n Pay pioneered South Africa’s first contactless card payment system. Consumers simply have to tap their cards against the card reader and complete purchases without having to swipe or enter a PIN number. This is a step that is being taken to closer align with European, American and Asian markets where these transactions have become widely adopted.
According to Pick n Pay deputy CEO, Richard van Rensburg, the implementation of the tap-and-go technology is up to 30% faster than authenticated card transactions.
Mobile payment solutions such as Standard Bank owned Snapscan, after initial slow uptake, have positioned themselves well for the future. They currently supply 26, 000 businesses with the system; however, are faced with the challenge of generating trust amongst South African consumers.
This coincides with the nascent state South Africa’s e-commerce market that is forecasted to surpass 1% of total retail in 2016, which is still relatively conventional and lags far behind global leaders. The 1% mark does however serve as a milestone which may entice major retailers to invest in an e-commerce presence in 2017.
Nigeria, Africa’s largest economy, has experienced different fortunes in the e-commerce space and has emerged as a leader on the continent. The Nigerian market is further boosted by the presence of global online retailers Google, eBay and Amazon. The e-commerce sector is currently estimated to be worth $10-billion and if growth continues at the current rate, it should reach $13-billion by 2018.

It’s the end of the telcos as we know it
Hendrik Malan, operations director of Frost & Sullivan Africa, says that telecommunications providers, having already experienced several years of upheaval, are faced with a critical question: what should they do about infrastructure?
Of course, this entails a myriad of related dilemmas – do they continue to invest billions in infrastructure provision,;what about legacy deployments; what level of connectivity is required – and their responses to these concerns will shape their intended market positioning.
At the one extreme is the ‘dumb pipe’ route – labelled as such because it seems simplistic, but it is important to recognise the legitimate opportunities that it brings. At the other extreme is the desire to move away from infrastructure completely and focus solely on the service elements of the market aspects; like customer experience, digital transformation and big data analytics, all of which are enabled by effective connectivity.
And then, of course, there are the range of options that sit within these two extremes.
While African operators often enjoy the benefits of watching market developments unfold elsewhere in the world before having to decide on their own approach, the ability of certain industries to leapfrog particular technological developments places local telecommunication providers in an unprecedented position. It is ultimately up to them to decide how they will move forward in this dynamic landscape.