African Service providers in Enviable Position to Capitalise on Future Communications Galaxy

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By Peter Ford - Managing Director, EMEA, Service Provider Transformation Group, Cisco

At the recent Southern Africa Telecommunication Networks and Applications Conference (SATNAC), I discussed the future communications galaxy and how rapidly growing IP traffic will impact service providers in not only in South Africa but also in wider Africa as a whole. Factors expected to drive traffic growth include an increase in Internet users, personal devices and machine-to-machine (M2M) connections, faster broadband speeds, and the adoption of advanced video services. While developed markets are grappling with how to manage the so-called ‘traffic tsunami’, service providers in Africa have a competitive advantage over their developed counterparts.

With South African IP traffic projected to grow 6-fold by 2019, representing a compound annual growth rate (CAGR) of 44%, this is the time for service providers throughout the wider continent to develop capabilities and services to address the growth in the future. The good news is that local service providers do not have the legacy infrastructure issues that service providers in the developed world are faced with and therefore can forge ahead quickly enabling them to leapfrog their global counterparts.

Service Providers globally are becoming digital to capitalize on the unprecedented traffic growth brought about by the next wave of the Internet. Service Providers in South Africa and on the African continent that do not drive their own digital business transformation will be left behind. Those that do will be pulled toward a ‘digital center’ in which business models, offerings, and value chains are digitized, driving new revenue streams and substantive business outcomes.

Today’s Challenges are Tomorrow’s Opportunities for African Service Providers

Service providers in Africa have the advantage of being able to learn from more developed markets, which have to face the traffic tsunami at a time when their core markets are declining and they don’t have surplus revenue to invest into new products and services. By taking note of what has happened in global markets, local service providers will know what to expect in future and can adequately prepare.

African service providers must develop new capabilities and services, if they are to survive in the future communications galaxy. They’ll need to adapt and build out their networks to accommodate rising traffic numbers and Internet users. They should use the window of opportunity that’s available to them now to get ahead of the game and build out services so that they’ll be ready once they do reach the point of saturation.

The way we at Cisco see it is that service providers have two options. They can either become service enablers that focus on building smart, efficient networks that are able to quickly provision services, or they can become service integrators, which focus more on providing digitisation services to end-customers through a partner ecosystem. We have yet to find a service provider that is succeeding at being both at the same time.

Digital disruption has the potential to reshape markets on a scale never seen before but time is of the essence. If they rest on their laurels, service providers in Africa may lose out to competitors. But if they act now, they will no doubt be successful and may even be a few steps ahead of developed markets in future.


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