Delivering data by air and sea

During the keynotes and panel sessions on the morning of the first day of the Africa Com event in Cape Town, it became clear that non voice services hold much potential not just as a revenue generator, but also as a customer retention tool in Africa.

Figures from Informa Telecoms & Media show that data revenues in Africa increased 13 per cent in the second quarter of 2009 to reach over $1bn. But we’re not talking about mobile broadband or YouTube here, it was also clear that data services have to provide timely and relevant content and information to the region’s subscribers.

A good example of this is Safaricom’s m-pesa initiative in Kenya, which analysts agree has shown the way in mobile banking, as a revenue generator as well as a customer retention tool.

And it is the dynamism of the market that will see more exciting and interesting data services rolled out as more bandwidth becomes available. Speaking at the opening keynote session of the event, Themba Khumalo, CEO of MTN Uganda, said that there is increased access to bandwidth in the country because of the landing of submarine cables such as EASSy on the continent. “Prices will come down so we will have to look at our own business model and price ourselves correctly. Data is a key area of concentration, we need to deliver value and great experience,” said Khumalo. “While we still need to maintain expensive connections from satellite for some time, customers will eventually see reduction in tariffs, as attractive pricing from other developed markets is coming in.”

But on the same panel Nagi Abboud, CEO of Atlantique Telecom, based in Cote d’Ivoire, said that most of his business is still based on voice. “The cost of data is still very high, and customers are not willing to pay,” he said. “But as more cables land prices will come down.”

This is a market being targeted by Google-backed satellite operator O3b Networks, which stands for “the Other 3 billion” and has attracted the interests of HSBC Principal Investments and Liberty Global as well.

Rash Jhanjee, VP MEA & Central Asia for O3b, said the firm offers fibre performance over satellite links, at prices comparable to fibre in developed regions, as well as plugging directly into core networks and 3G cellular and WiMAX towers to change the economics of the telecommunications game in the world’s fastest growing markets.

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