Mobile Money & Mobile Data in Africa Telecoms Market

Latest Developments in the African Telecoms Market

By Yael Ilan, COO, FTS

February 16, 2017

Yael Ilan talks through some of the changes and opportunities we are seeing in the region’s telecoms market this year.

Mobile Data – Driving Africa’s Mobile Market Growth

The African market is currently experiencing two major developments. The first is an increasing demand for wireless data services. In Africa, unlike other markets worldwide, operators have been able to continue growing revenues from traditional voice and text. However, the growth of OTT messaging platforms is starting to have an impact, as is the fast-growing adoption of smartphones. African operators are responding by offering bundles that are tailored to users’ data requirements, such as social media bundles, which encourage the use of mobile data services.

Whilst a great opportunity, the need to offer different wireless packages that encourage the use of mobile data services is also a challenge, because it is taking place without voice LTE being widely deployed: in many markets, it is only at trial stage. Opportunity and challenge go hand in hand.

Mobile Money on the Rise

The second market evolution is that of mobile money and mobile financial services, which are growing exponentially. There are three drivers behind this growth. The first is mobile network operators, who have been providing mobile money services in Africa for years. The second is Africa’s banks and financial institutions. Whilst Africa’ population is widely unbanked, there is almost complete mobile phone penetration so banks are making use of the mobile networks, or, in many cases, creating their own mobile money services.

Indeed, the African MVNO market, whilst not a large or successful market compared to the rest of the world, is now starting to find its own niche thanks to the growth of mobile money. The banks have no mobile infrastructure of their own, so they are creating their own infrastructure to provide these services, thereby becoming a kind of mobile financial services-focused MVNO.

Thirdly, a group of different entities, including technology companies and retailers, are serving the diaspora communities in Europe – those Ghanaian, Nigerian and other African communities based abroad – who want to establish relations, including money transfer, between countries.

Mobile money services go beyond simple money transfer between two individuals: they can be used to transfer money or airtime, make bill payments, access banking services, loans and micro-payments, enable mobile commerce, e-commerce, salary payments, international remittances and much more. These services must be underpinned by flexible, scalable and reliable solutions to ensure consumer confidence and continued growth.

FTS’ customized mobile money solutions foster cooperation between mobile network operators and banks and simplify the complex nature of revenue sharing schemes. Even with differing business objectives and mind-sets at play, FTS’ partners and settlements solution ensures that mobile money providers can deploy personalized contracts and relationships with every partner in their ecosystem, resulting in increased attractiveness and improved business relationships, reduced total cost of ownership, a remarkably fast time-to-market and increased revenues.

Looking to the Future

The future in the African telecom market continues to look exciting. We would expect to see more requests for convergent billing systems that enable operators to offer data-first products and plans that respond in real time to subscriber requirements. We will also see greater demand for mobile financial services in the region, which will bring financial flexibility and a greater range of services to Africa’s unbanked population: a means to manage their money in the present and plan for the future, and a better chance to find financial stability at their fingertips.

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