Tunde Makinde, Executive Consultant – TMT Blog Post from South Africa

Tunde Makinde, Executive Consultant – TMT Blog Post from South Africa

The TMT (Technology, Media and Telecommunications) industry across Africa continues to evolve reassuringly fast whereas other sectors such as Oil & Gas and Construction appear to remain relatively static by comparison. As one General Manager mentioned, ‘the only guarantee about this industry is that things are constantly evolving’. Executives in Africa’s Executive Consultant Tunde Makinde reports his findings from meetings with influential TMT industry experts during a recent visit to Africa, to see what challenges and changes have occurred over the last 12 months.

Alpesh Patel founder and CEO of Mi-Fone, the FIRST African Mobile Devices brand, is of the opinion that handset manufacturers and Mobile Network Operators have had a very rough ride, particularly the Tier A brands. He feels that consumers across Africa are becoming more and more aware of what their money can buy and are looking for value for money when it comes to purchasing a handset.

Interestingly, despite consumers becoming more discerning there is still a reluctance for them to complain when they experience issues with the product or service, and although customer engagement and interaction has increased, there are still chunks of communication left adrift.

Thomas Demolliens, Head of Middle East & Africa at Lumata comments that ‘There is still a long way to go in terms of how companies handle the customer experience, but there is now more structure with the engagement.’ Michael Njenga of Subaru Kenya added that social media has made companies focused and offering a broader recognition of what their customers actually require. Up to 20% of new leads now hail from social media meaning that their Customer Relationship Management Systems (CRM), are full of invaluable feedback.

Government support of the Broadband, Cloud technology and the Mobile Money space in particular has been encouraging. With 263 different Mobile Money services available globally in over 80 countries to 100 million active users, this has led banks to enter the market directly or via joint ventures. What began as a largely unregulated industry now has the central banks enforcing regulations. MNO’s have also taken on lending and other banking services. A prime example is MTN using its existing partnerships to give it the capacity to make loans and investments.

There are still concerns surrounding the role of the regulator and as John Tombleson, CFO at Safaricom can identify, Kenya is trying to accelerate its competitive edge, but on the whole he would prefer that their approach change. ‘Safaricom would prefer to see the regulator follow best international practice.’ Companies such as Uber and Airbnb have attracted the attention of the regulator in South African so it could be argued that if you haven’t reached the attention of the regulator, you haven’t pushed the boundaries enough!

‘Red tape need to be cut and more must be done to make it easier for firms to do business. For example, if I want to move handsets in or out of Hong Kong it takes me just 1 day’ continues Patel, ‘whereas in Kenya it can take up to two weeks.’ Keith Webb from Rand Merchant Bank felt that the regulators are one step behind the MNOs and not pre-empting changes in the industry to allow it to develop further. An example would be the slow freeing up and allocation of valuable spectrum. Rwanda and Mauritius are noted as reaping the benefits from the political will and strong leadership within their regulatory authorities and in this environment red tape has noticeably been cut back with the introduction of a ‘one stop shop’ where permits and documents can be accessed online.

Perhaps the narrative of the African success story has been overplayed in some instances as the growth of the middle classes is still quite fragile. Some organisations, notably Nestle, have cut their workforce by 15% over 21 African countries, however elsewhere there is mood of optimism with Ethiopia tipped to extend its rapid growth further over the next 2 years.

Investment is still a challenging area with bankable projects proving hard to identify. A spokesperson from the Industrial Development Corporation (IDC) observed that, ‘There is too much money chasing too few projects and ‘mid-scale’ projects are often harder to raise finance for than large scale projects of over $100m. The Silicon Valley venture capital funding model will not necessarily be best suited to succeed in areas such as Lagos and Nairobi as the reasons for being in business will not necessarily be the same.

The introduction of fast speed fibre broadband technology is exciting a great many people and ICT as a whole is expected to consolidate and grow, as its powers have not been harnessed. MNOs are anticipated to advance into mHealth, mInsurance and mEducation as the adoption of the smartphone accelerates.

I was fascinated by a spokesperson from Huawei describing how remote surgical operations will become more prevalent. He gave me a description of how, if his 11 year old daughter was at home unwell, he would be able to use his mobile phone to test her blood, which would indicate, say, influenza. He would then be able to print off her medical pills using a 3D printer!

With Facebook’s $2 billion acquisition of Oculus there is an expectation to see Virtual Reality gain momentum and have an impact on how brands and advertisers connect and empathise with consumers. Michael Njenga from Subaru Kenya also predicts a rise in the popularity of autonomous driving. He also went on to mention that having fully functioning robots in the home is still some way off for now. This for me at least, is reassuring!


Tunde Makinde

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