By Ville Syrjänen, Director, Value Added Service Solutions, Tecnotree
Growing population, fast urbanisation and continuing fragmentation of local marketscharacterise the business landscape across Africa today. Digital services growth benefits directly from all of these trends. Expected to reach about 6% CAGR this year, it builds upon urbanisation and steady economic development. Furthermore, in many instances Africa is leapfrogging the ’industrial revolution‘ directly to a ‘digital services economy’. Such requires digital sales channels, appealing applications and content, and most importantly a local ecosystem in which the CSP should take a leading role.
Most innovative CSPs in Africa already run ecosystems and use modern business models. For example, the revenue share model, which has proved successful in the applications business, can be applied to value added voices services too. In fact, value added voice services can offer chips for service differentiation and will increasingly be embedded in a context; one-click call to customer service from an online store is an example of such.
So what steps should CSPs take to further improve their position?
Clearly, the role models for success are the agile Internet players who innovate and launch services, concepts and trials at a rapid pace. For the CSPs this means cloud based models, partnering and joint market-making activities. As an example, RingbackTone service is a success in Asia and CSPs in Africa could use the same as a step towards content business. Another great example are video and social media services – success of which are proven by OTT players like Apple and Facebook – adding value to CSPs’ offering according to recent research.
Purely focusing on coverage, bandwidth and access will not give competitive advantage over peers who provide personalised service packages and delightful customer experiences. It is high time for CSPs to rethink their business models and make the transformation towards a digital marketplace which offers service bundles with content, applications, and telecom and Internet services alike.