Kathy Gibson at IDC Directions in Sandton – The Internet of Things (IoT) will come of age in 2018.

This is the word from George Kalebaila, research director for telecoms and IoT: sub-Saharan Africa at IDC, who says the environment is right for IoT to flourish. “The cloud has become mainstream, networks are mature, and sophisticated analytics are now available,” he says.

South Africa is the leader in Africa when it comes to IoT, and the rest of the continent is looking to us for guidance.

The market opportunity in South Africa is set to grow about 16% a year to reach $1,7-billion by 2021.

“But that value is fragmented,” Kalebaila points out. Some of it is in connectivity some in hardware, some in services and some in platforms.

“However, the bulk of the value in IoT is going to be in services, and we will begin to see the value of investments into networks and hardware diminish.”

The sectors driving IoT developments include the expected areas of manufacturing and retail – but in South Africa, transportation is a big IoT adopter. Indeed, Kalebaila says that South African companies are leading the world is this sector.

Utilities and public sector are set to be big markets for IoT as well.

Although some IoT solutions are universal, and equally relevant for all markets, Kalebaila believes there is a lot of opportunity for local players to craft solutions specifically for the home market.

This is particuary noticeable in East Africa, where loca developers are demonstrating a number of IoT innovations, he adds.

There has been some hesitation in deploying IoT solutions over questions about which network standard should be used. Kalebaila doesn’t believe matters, so long as the medium-term goal is 5G.

“With 5G we don’t talk about the technology itself, but rather about the use cases,” he says.

In the enterprise, SDN (software defined networking) and NFV (network file virtualisation) are going to be vital for enhancing business process efficiencies.

Security remains as a major concern for all organisations, Kalebaila says, and it wil have to be part of any IoT discussion.

A new technology that could become an integral part of any IoT network is blockchain, he adds. “Blockchain is a good fit for IoT, retaining all the transactions on the network and raising the level of trust.”

Blockchain is a not a new idea in Africa and there are a number of innovative use cases. One of these is De Beers, which uses blockchain to track all diamonds from mine to market.

IoT will change the nature of the network, Kalebaila adds. It will push processing to the edge of the network to enable fast response times and edge-to-edge communication, something that 5G will allow.

“5G is the intersection point of IoT and mobility,” he says.

Despite these network developments, the days of double-digit growth in telecommunications are over.

However, the telecoms market in sub-Saharan Africa will see around 3,7% compound annual growth rate (CAGR) for the next few y ears, with mobile responsible for the lion’s share of this ongoing investment.

There is no doubt that data growth is leading the charge, says Kalabaila. In fact, South Africa telecoms is already in the post-voice era, and by 2020 at least 60% of connections will be via 4G.

“The telecommunications industry is going through a couple of changes,” Kalabaila says. He explains that the industry has gone through what IDC terms the gold rush, the era of gloom, and the phase of new optimism. It is now in the stage characterised by innovation.

Today’s telcos are coming up with new services, Kalabaila says. They are partnering in new ways and are learning to play in new markets. On the technology front, they are starting to evolve their networks to SDN and NFV, and into the cloud.

“It’s a completely new ball game,” Kalabaila says.

Telecommunications companies assume a new relevance in the era of digitalisation, as the service provider that connects all the dots.

The so this by providing high-bandwidth connectivity that, coupled with compute power, shifts the focus to the service.