AfricaCom is the preeminent mobile communications conference on the African continent. I have witnessed changes in the make up of the type of exhibitors, speaking streams and participants over the years. Critical to these changes, has been the evolution of the mobile device from a voice only device to being the primary Internet access device on the African continent. This fundamental change has far reaching implications for policy makers, regulators, networks, operators, investors and content providers.
AfricaCom takes place when the Internet is increasingly playing a central role in the growth and development of the global economy. The event is happening just after the Internet Governance Forum (IGF) held in Bali, where the theme was “Building Bridges – Enhancing Multi-stakeholder Cooperation for Growth and Sustainable Development”. It is held following dissatisfaction with existing institutional structures and global identification of the need for greater consensus building on the future of the Internet as a global resource. It is happening at a time when ICANN is looking at global Internet governance through multi-stakeholder, multi-national engagement and participation. When issues of jurisdiction over data and security thereof is becoming of global concern.
It is happening at a time when the global community is concerned with the protection of the security and privacy of the Internet and its users. This event is happening as ICANN continues to make fundamental changes to the generic Top Level Domains (gTLDs) with the consideration of increasing the number of gTLDs from the current 27 to as many as 1400 .
This AfricaCom is happening just before WISIS and ITU plenipotentiary in 2014 and World Radio Conference scheduled for 2015, in which the role of the Internet will be an important discussion point.
LTE AND SPECTRUM MANAGEMENT
This event is happening at a time Africa is accelerating towards reaching the 1 billion mobile phone subscriptions mark. These subscriptions are increasingly moving away from being voice driven to being data driven. The result of this new phenomenon is increased data traffic that is exploding, alongside the fact that big data is slowly becoming a reality, driven by the growth of cloud or utility computing.
We are gathered here at a time when African countries are assessing the model of licensing LTE, LTE advance (2.6 Gigahertz and Digital Dividend I and II). This is the time when investment models in deploying LTE are being relooked within the context of declining revenues and mobile termination rates (MTRs) on the back of increased economic uncertainty.
NEW PLAYERS EMERGING AND OLD PLAYERS RESTRUCTURING
This AfricaCom is convened at a time when new operating systems from Mozilla Firefox and Samsung are taking aim at Android and iOS. When Blackberry is refocusing its efforts on reversing the decline in its market share. When Microsoft has bought the Nokia mobile phone business to drive the increased adoption of the Microsoft mobile operating system.
It is a time when the OEM environment is experiencing significant M&A activity including the acquisition by Marlin Equity Partners of Nokia’s optical transmission business.
WITHIN AN ECONOMIC CONTEXT
The conference is convened 5 years after the world economic meltdown. The result of which is that Europe continues to struggle to find an answer to the economic challenges facing the EU. The implementation of austerity measures coupled with growing youth unemployment in the southern states of the EU has impacted negatively on continued investment in mobile businesses in the region.
On the flipside, AfricaCom is convened at a time Vodafone has received significant inflows of capital as a result of the Verizon Wireless transaction. Vodafone has undertaken significant M&A activity that included entering the fixed network environment with the acquisition of Cable and Wireless and Kabel Deutschland.
The question that is on everyone’s lips is what impact will AT&T have on the market?
MOBILE BROADBAND GAINING TRACTION AS TECHNOLOGIES MATURE
AfricaCom takes place at a time where mobile broadband adoption on the African continent is gaining significant traction. This is a time where many are thinking of how to sustainably deploy optic fibre to the home, the business and the base station. We are seeing software defined networks (SDNs) and software defined radio (SDR) gaining momentum and maturing as a technology.
This is a time when Wi-Fi is integrated in LTE radio equipment and continues to grow in terms of its footprint.
NEW SERVICES, CONTENT AND APPLICATIONS
As per the parallel streams at this event, with OTT players on one side, device manufactures and mobile network operators on the other, all fighting it out in order to determine who will control the customer.
Mobile devices are useful tools to access the Internet. However, Internet content is even more important as it creates demand and applications for these devices. Unless we develop Internet content, all these smart mobile devices will look primarily to non-African content. Notwithstanding Africa’s rich content from sources such as Nollywood but also from the rich African music, art and communities.
WHAT SHOULD BE PRIORITISED?
AfricaCom is happening at a time when a debate’s raging about which comes first “research for a malaria vaccine or the Internet”. In my view it is finding a malaria vaccine. For the African continent this is one of the most important challenges we need to solve, because if we do not succeed with public health interventions there will be no people to use these mobile devices and the Internet itself. We need mosquito nets, we need malaria vaccine, we need anything and everything to help us address health, poverty, and ignorance related challenges. Importantly, we need them now.
What is clear is that there are too many priorities and moving parts in the ecosystem. The question one should either ask or respond to is: how can Africa catapult forward?
POLICY, REGULATION AND LICENSING
This conference is also happening at a time when Africa is hesitantly moving forward towards LTE spectrum licensing. This is also a time when ITU Telecom 2013, which takes place next week, will discuss major world telecommunications challenges. The theme for the discussions will be “Embracing Change in a Digital World” which captures the ideas detailed above.
What policies, regulations, investments, skills, technology and business environment do we need?
How do we pick the catalytic or game changing areas that will help drive the next 10 years of mobile broadband?
What should governments, regulators, investors, operators, Internet companies do to accelerate this environment in the best interest of the consumer on one side and shareholders on the other.
The licensing of LTE and LTE Advanced technologies and spectrum is critical to the process of catapulting Africa forward. The continued delay in the process, which includes the Digital Dividend I and II has a significant impact on the investment environment on the Continent. We estimate that it will lead to in excess of US$30 billion per annum for the period 2014 – 2019.
WHAT IS THE CATALYST FOR CATAPULTING AFRICA FORWARD?
Gone are the days where communications was solely about voice. In fact, voice products will constitute less than 1% of the future we envisage. The concept behind the invention of the telephone was to enable people in different locations to talk to each other. Today, this device called a phone has more than a thousand functions or applications, which keep multiplying in number..
Should we still call it a phone? Perhaps what it is called is not important, with the importance lying with its ever-changing features. These include devices we are now able to embed in things such as clothes, cars and machines. It is worth noting that everything in the world (animate and inanimate objects) will all be connected to each other.
What does the advent of the ‘Internet of things’ tell us?
It is clear that we need more sensor networks, as well as mobile devices that can help us manage our lives in this our urban world (forecast to exceed 5 billion people in 2030) of traffic jams and high levels of energy consumption, and ways to effectively manage our resources and protect our natural environment.
Whereas connectivity is still an issue presently, as we try connect people and things, in future its pervasiveness will ensure that it falls away as a significant point of discussion. In the near future, the fact that things are connected to one another will be taken as a given. The value to be unearthed from these developments will include the analytics of the data that emanates from this interconnectedness. This has brought about a new scientific discipline called data science. In fact, it is not new, though the sheer volume thereof, and our inability as humans to manage and manipulate these volumes of data, is.
BIG DATA AND THE INTERNET OF THINGS
The question that everyone is asking is who the winners in this new data science world will be? Will those who were winners in the connectivity world transform themselves, or will new players emerge? Perhaps those who built early search engine platforms will transition to the big data science world.
The jury is still out on this matter.
Critical to Africa catapulting itself into a brighter future is the effective, speedy and efficient allocation of spectrum. We cannot afford the cost of delaying the process of licensing LTE and LTE Advanced spectrum. Our experience with the transition from 2G to 3G networks in the early 2000s should the negative impact that this type of delay creates. In the fast changing modern environment, a delay will have significant direct and indirect impacts on the African economy, consumers and operators. We dare not miss this opportunity.
In light of the above, it is clear that the business models are changing and we need new investment models, the nature and form of these are not clear as yet.
Is it too early to invest, or is it already too late?
How will the data science ecosystem evolve?
Are OTT players or the application environment the early stages of the data science world? What about those who will be producers of sensor technology?
Is all the M&A activity highlighted above the beginning of this new ecosystem?
However, it must be noted that there will still be money to be made in connectivity and infrastructure, as we continue deploying optic fibre thus creating opportunities and requirements for new SDN and SDR, though new business models will be required.
Is there a Crystal ball out there?