25 Mar 2011

Where will VAS innovation come from in Africa's market?

Until recently most of the efforts on the part of telecoms operators and their partners in Africa have been focused on building and improving networks, first to deliver services to the growing customer base, and then to enable them to access new services including internet access.
Now that most of the population is connected and that submarine cables and new satellites are improving international connectivity and capacity, operators can turn their focus to how to best serve their customers and increase their revenues. Innovation in value-added services services is key to improve customer choice (and spending) and to differentiate from competitors. Until now, mobile money has been the great African-pioneered service, with sucessful offers such as Safaricom and Vodacom's M-Pesa, Zain's Zap and Orange Money. These are perfect for the African market, in that the offers are easy to use, fulfill a need that is specific to low-income segments, and improve customer loyalty.
But what is next? For the more advanced markets or segments, operators can look at mobile content or social networking, but they face the issue of sharing the customer's loyalty (and spending) with third parties. Targeting a different category of subscribers, telcos can look at services for specific sectors such as education, health or corporate verticals such as the oil and gas industry; the continent's major operators are busy targeting the potentially lucrative enterprise market by developing specific divisions such as MTN Business or Orange Business Services. But what about the 'ordinary' consumers, the generally low-income users who cannot spend much on new services? Operators need to be innovative in order to deliver attractive services that fit their lifestyles, while keeping their costs low to achieve reasonable margins. Airtel Africa, with its experience from India, may bring interesting ideas to the African markets, but its model may not be straightforward to transpose.
All those topics will form a recurrent theme in Com World Series events this year, with sessions covering VAS in all conferences, a special keynote on 'Serving the Customers' at AfricaCom as well as a co-located event on Entreprise ICT, and a new event dedicated to Value-Added Services in Africa to be held in Johannesburg in July.