21 Aug 2015

Digital music landscape will be unrecognisable in a year’s time, says Spinlet’s Nkiru Balonwu ahead of Africacom

Nkiru Balonwu is CEO of the Spinlet Group, a digital media distribution company, focusing on Africa-centric content. She will be joining the digital music panel at AfricaCom on 17th November, alongside representatives of Orange, Millicom, Deezer, Africori, Unitel and Baziks Entertainment.
Here she shares with us some thoughts on Africa’s digital music market.

What is your Spinlet's position in Africa’s digital market?
Spinlet is a leading music distribution service in Africa. With over 1.7m app registrations to date and 10,000 daily unique visits to our website, our company’s reputation as the continent’s premier streaming and downloads platform continues to grow. Our service has always been a streaming and downloads hybrid and we are glad to see the model being adopted by some of the larger companies in our space.

Where do you see your company in 5 years’ time?
At Spinlet, we have always put a premium on research and looking at the things we can do to improve our product. We have also focused on developing relationships within the industry and expanding our rich and diverse music catalogue. In 5 years’ time, I fully expect our footprint to span the entire continent, hosting content from almost every country, being the go-to service for all things African.

What do you think will be this year’s most game-changing development in Africa’s digital market? The coming of Apple Music will certainly have an interesting ripple effect, especially after the Android version of the service goes live. Everyone else will be compelled to look at their product differentiation and value creation strategies. That level of competition typically results in high-level innovation and I expect the digital music landscape to be unrecognisable in a year’s time.
What are the best strategies to monetise content services in African markets?
I think the key to succesful monetisation is providing the easiest access and easiest payment method possible for the users in the target demographic. There is a slight balancing act to be done, however, because of the number of potential customers increases as you go towards the lower end of Africa’s social demographics. The content most likely to do well is content that can be consumed easily on lower end mobile devices and paid for without necessarily having a bank account. This is the reason that RBTs/CBTs have done so well. The challenge is to apply this to content that requires smartphones and bandwidth, like videos. Apart from infrastructure, I think the payments will be the lynchpin. Once we resolve that issue across the continent, monetisation will become more of a marketing function than a prodcut innovation one.

How can digital brands create more value for African consumers? For me, the best way to create value is by focusing on any one of more of the following three things - solving problems; affordability and usability, and improving outcomes.
  • Solving problems: What is the problem that a digital brand is trying to remedy? Digital intervention has to fill a gap or improve on the existing means of doing so. So taxi apps, for example, are increasingly popular because of the extra convenience they provide. Music apps are popular because they provide a ready distribution network and incentives not to support piracy.
  • Affordability and Usability: The product being sold by the brand must be easy to use and affordable by a large enough section of society. This means that apart from the average incomes in the regions being targeted by the brands, devices on which the product will be used are also an important consideration.
  • Outcomes: When consumers purchase a good or service, it’s not the actual commodity they are seeking, but an outcome that they believe will be derived from use of the commodity. The question to ask is “What is the consumer trying to achieve?” Taking Spinlet’s customers, for instance, they aren’t just interested in music. They aren’t just ‘music lovers.’ If that was all they were, or all they wanted was more music, they might as well use any download site. However, we believe that Spinlet users are looking for more than music. There’s a lifestyle they aspire to. They want to discover new artists, and connect and interact with the names they already know. The Spinlet website gives consumers access to artists all over the continent. For the artists that license their content on the Spinlet platform, the outcomes they are seeking are [1] guaranteed and documented revenue when their music is streamed or downloaded, [2] greater publicity, and [3] a further reach for their music and a bigger stage to perform on. Spinlet delivers all of the above.
What types of partnerships should telecom operators and content brands develop?
The answer to this question becomes a little more complex as more telecom operators are now also in the music distribution business. I suspect that this would ordinarily raise competition/antitrust issues outside Africa but that’s probably a different conversation. I think telcos have created value by providing alternative revenue streams for the artists. I think, however, that they erode most of this value with the revenue splits they offer. The ideal partnerships between telcos and content brands (which would include labels, artists and distributors like Spinlet) would be those that promote all parties concerned, support the local industry and leave the content owners with a much healthier share of the earnings than are currently obtainable.

In your opinion what are the most interesting debates to expect at AfricaCom this year?
I probably have a bias towards media distribution, so I’m particularly looking forward to the debate on business models for operators in digital entertainment, as well as the session on pricing and revenue strategies. Given the level of development of the infrastructure across the continent and the raging issue of taking payments conveniently, I expect these sessions to generate very robust engagement. I’m also keen to hear opinions on developing local content and the various conversations on the evolution of mobile money.

For more information of the digital music panel, part of the Digital Entertainment stream at AfricaCom, chech the brochure here.

19 Aug 2015

NigeriaCom: The Largest Telco Event in West Africa is Embracing the Developer Community

If you are an app developer or founder of a tech startup, chances are high NigeriaCom is not on your list of tech events to attend yet. Being the largest annual meeting for the telco & ICT industry in West Africa, it should though.

Having a profound understanding of the underlying physical infrastructure, the regulatory framework, the industry’s dynamics and technology trends is essential for every internet based company’s success.

In essence, the challenges and opportunities of the telecom & ICT industry can be summarized with four questions:

  • Penetration: How quickly is internet usage in Nigeria going to move from a current internet penetration of 30% to 80% and beyond? 
  • Pricing: At which pace will the costs of running a mobile phone decrease from the present 5% to about 2-3% of monthly income, known as a tipping point for massive mobile internet usage growth?
  • Investments: How rapidly has the Nigerian telecom & ICT industry evolved into an attractive, transparent space for domestic and foreign investors?
  • Collaboration: How fast will industry leaders join forces across the entire stack, bottom up from the physical infrastructure to API centric tech ventures?

NigeriaCom will be hosted between 14th -15th September 2015 in Lagos at the Orienal Hotel, for the seventh consecutive time, and during the next weeks we will discuss those topics highlighted above in a series of blog posts counting down to the event.

While a series of panels will deepen your understanding of the telco & ICT industry, the Entrepreneur’s Hub will expose you to potential mentors, partners, customers and investors. With an average of 43% C-level attendees (54% total operator attendance), the Entrepreneur’s Hub is an ideal meeting place for start-ups to showcase in front of recognised ICT leaders.

To find out more about NigeriaCom and the Entrepreneur's Hub, visit the website: www.comworldseries.com/nigeria 

18 Aug 2015

Souhail Haddaji du Vice President Program Management (former VP Product Development)

Souhail Haddaji, Vice President, Product Development at Du, has some highly insightful views on digital transformation and customer-centricity throughout the Middle East. Ahead of his speaking session at the upcoming Middle East Com Telco & ICT Leadership Summit he gives us his thoughts on the future of the digital industry.


How would you qualify the impact of the digital disruption?

I would say it is a matter of survival because, as with every industrial revolution, firms which adapt to changing economic and societal conditions grow and prosper. Others which fail to do so merely survive or, in extreme cases, simply cease to exist.

The profound societal and economic changes induced by digitization of our connected lives are of similar magnitude, and therefore they will probably trigger an impact of comparable scale on people, firms and societies in general.

Talking about telcos specifically, they are today at a crossroads for several reasons:

  • OTTs are threating telcos’ traditional value chain positioning (Ovum estimated this impact to be – $ 386 billion between 2012 and 2018) 
  • The age of the customer: Empowered by technology, with instant access to any information they need and supported by their social network, customers have taken the lead in the buyer-seller relationship. Customers today know better than their service providers about their products, reputation, latest competition’s offers and promotions. In the past decade, telcos built highly effective customer acquisition machines. But, the implications induced by the age of customer and market maturity, require telcos to shift gear towards customer centricity by putting customers at heart of the organization.
  • Core services maturity: Mobile voice, SMS and fixed broadband markets have matured and competition has increased severely, leading to margin squeeze and pressure on the income statement.
  • Inadequacy of IT capabilities for the digital age: Telcos built highly effective acquisition machines based on complex and often siloed IT systems, to manage various customer-facing and back-office functions (CRM, billing, fulfillment, assurance…etc.). The problem is that these systems, often integrated in complex ways, are not optimized to meet digital challenges, such as personalization, real-time customer responses and omnichannel capabilities.

How are other industries dealing with digital disruption?

At the end of 2014, we completed research with INSEAD regarding customer-centricity and the impact of digital disruption in the banking industry. It revealed that a few years ago, banks’ boards started to raise some fundamental questions that need to be addressed by CXOs in response to the coming digital disruption:

  • Should they redirect investment into new independent digital ventures, or should they keep allocating resources to old business as well? 
  • How to move organizations from siloed product-centric structures to customer-centric ones?
  • With increasing ROCE pressure from shareholders, what are the next generation of productivity improvements for product portfolios, sales channels and contact centers?
  • Is the branch obsolete in an omnichannel world? How to shift retail network focus from transactional business to a more customer advisory value creation role?
  • What CIO vision is required to support the digital ambition? What are the consequences for legacy systems? What transformational paths should be followed?
  • What is the appropriate organizational model to support the digital journey? What is the appropriate governance model to steer the digital transformation and ensure adequacy between resource allocation and business value throughput?

Telcos need to fundamentally rethink their strategic assumptions in a similar way, in order to handle the potent dynamics blurring the boundaries of their industry.

They need to address, simultaneously and in coherence, two transformational challenges: the customer centricity and the digital imperatives. Addressing one without the other will result in an incomplete organization, partially equipped to deal with the strategic imperatives brought by the digital disruption.

From where should telcos start this journey to become digital operators?

For telcos to navigate through this turbulent and stormy weather, they have to focus on the right compass…their customers! They represent their strongest competitive advantage and greatest challenge at the same time.

Telcos need to develop a healthy obsession with their customers: deeply understanding their needs, their aspirations, what interactions frustrate them most and what delights them. Only when armed with these insights can they build customer-centric propositions, delivered through consistent and omnichannel-enabled customer experience. Two dimensions should form the pinnacle of telcos’ customers centricity: customer intimacy and customer experience excellence. 

Read the full interview with Souhail here.

To find out more about Middle East Com Telco & ICT Leadership Summit, or to register, visit the website: www.comworldseries.com/me 

This academic research paper by Souhail Haddaji was originally published by TMForum and MIT on 8th June 2015

Join Start-Ups, Investors, Incubators, Entrepreneurs & Operators at the Ericsson AHUB

Calling all tech start-ups, incubators, entrepreneurs, investors, operators and developers... AfricaCom 2015 brings you its latest invitation only, grassroots, community driven feature, the Ericsson AHUB, the destination for Africa's leading tech entrepreneur, developer, venture capital, operator and vendor communities.

In partnership with Africa's leading incubators, accelerators, and innovation hubs, the Ericsson AHUB will showcase talent, facilitate partnerships and encourage investment and innovation, in a sector which has an abundance of ICT tech skills, but little industry support.

See why our partners are involved in the Ericsson AHUB

In a slick setting, alongside AfricaCom at the CTICC in Cape Town, you will:
  • Gain insights from presentations on how to be a successful tech innovator in Africa
  • Learn from incubator case studies
  • Hear panel discussions focussed on funding models and how to build a business case to gain finance
  • Understand how incubators, accelerators, venture builders and co-working areas support start-ups
As well as gaining invaluable insight into how technology innovation is being developed, funded and nurtured in Africa, you will also be able to:
  • Join pre-arranged 1-to-1 meetings with entrepreneurs and potential investors
  • Be involved with pitch to win funding
  • Mix with the African start-up and investor scene
  • Join the pre-arranged speed networking service to plug you into the tech ecosystem

The Ericsson AHUB will attract hundreds of key players from the tech start-up community. Make sure you are one of them by applying for a place at this unique get together! 

We look forward to seeing you in Cape Town!

Kind regards,

The Ericsson AHUB Team