Telcos expected to unite industries - CNBC Africa

Telcos expected to unite industries

Technology

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Mobile telecoms has a bright future in Africa. PHOTO: Getty Images

“Telcos are going to be the glue bringing industries together, whether its financial services, educational, access to mass media. In the future there’s going to be more machines that are connected to the internet than human beings and telcos are going to be at the centre of it,” Deloitte Consulting’s TMT leader Arun Babu told CNBC Africa.

“If you look 10 years ahead, our fridges, our TV’s, every single device that we interact with is going to be connected to the internet – that’s the opportunity and the threat that telcos face. Each of the other industries are trying to play in the telco space and telcos want to play in their space – that’s the interesting phase that we’re going through.”

Mobile telecoms in Africa has seen massive growth over the last decade with compound annual growth rate subscriptions increasing by nearly 42 per cent.

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Mark Casey, leader of the technology, media and telecoms industry at Deloitte & Touche, believes that that growth looks set to continue.

“Between 2000 and 2020, there will be almost a quarter of a billion people on the continent becoming middle class – really important from a consumption standpoint. You’ve got bandwidth explosion, connectivity rates also dramatically increasing, the analogue to digital conversion so opportunities are still absolutely enormous,” he indicated.

“For telcos there’s a whole bunch of issues – a maturing subscriber rate, ARPU levels and margins starting to fall, voice being commoditised. They’re at a crossroads right now and we see a consolidation play seen nowhere else in the world on our continent right now.”

Casey also believes that Africa is about to see a consolidation that has never been seen anywhere else in the world.

“The dichotomy that the telco operators are facing is to be efficient in business while still looking for new revenue streams that they previously hadn’t had access to – things like mobile money, going into financial services, e-education – that they never previously did,” added Babu.

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