Beyond connectivity: plan ahead for service partnerships

Service providers in the African region have a golden opportunity: a chance to prepare for the opportunities afforded by next generation services, while operators in developed markets have tried and largely failed to develop consumer services beyond connectivity.

This was the message from Mark Newman, chief research office at Informa Telecoms & Media, speaking to an overflowing auditorium as the AfricaCom 2012 event opened its doors.

If the crowds gathered at the opening keynotes of the Africa Industry Outlook stream were any indication, insight into pairing with specialist content and service players to maximise access revenues was right on the money.

Newman said that carriers need to accept that they are not going to capture large revenue streams beyond basic services like voice, data and SMS—these areas are where the big money is, and high expectations of concepts like carrier billing will only deliver a five to 15 per cent revenue share at the outside.

The point is that revenue share is not a significant opportunity, but neither does a business have to be all about access.

“If you get into discussions early enough, you can build a 3G network so that it benefits the both of you,” said Newman. “It will not be network services that are the future, it is Over The Top services.”

But in order to fulfil this vision, operators need to see the strong opportunity to partner with OTT players, giving dedicated access to popular services like WhatsApp and Facebook.

This type of partnership model is especially attractive in Africa due to the strong brand strength and distribution channel owned by the carrier—the very thing that gives carriers leverage against OTT players hungry for more reach.

“OTT providers should be seen as partners and customers, not competitors,” said Newman. “These guys need you as much as, if not more than, you need them.”