Christian De Faria has been CEO of Airtel Africasince 2013. He has over 30 years of rich industry experience across multiple geographies, diverse sectors and organizations such as MTN, Telekom Malaysia, Disc Vision, Deutsche Telecom and Grundig. He shares his views on Africa’s telecom market ahead of his participation to the keynote panel on innovation at AfricaCom.
AfricaCom: What is Airtel’s position in Africa’s market?
Christian De Faria: We are the second largest operator in Africa by revenue market share.
A: What do you think will be this year’s most game-changing development in Africa’s telecoms?
·Making the M-payments environment mainstream
·The bridging of the $20 smartphone which will result in widespread adoption of the Mobile Internet.
·The Digital dividend will enable more highly accessible broadband capacity at higher speeds which will allow more innovation and greater opportunity for Africa.
A: What services will enable telecom operators to generate revenue from data?
CDF: First, sponsored data – OTT players, App developers, and content owners have an increasing desire to reach the end user, in the process the Operators are losing out on big revenue opportunities. This situation is putting pressure on the top/bottom lines of operators as the data contribution to overall revenue is increasing. Currently content providers do not have any commitment on the consumption limits. Sponsored data is a perfect solution which allows an operator to get revenue from the bulk volume sales to the content providers and the end user can access the discounted services. It’s a win-win proposition for the ecosystem, where the Content providers ensures access to its content at much lower prices, the user gets the service access at a lower cost and the Operator gets a share of the revenue.
Second, shared accounts – as a single account/family gets more devices, a possibility to link all the devices to a single account allows better management of usage and cost to the end user. The user also gets control of the entire purchased volume which can be distributed within these devices; the servicing of the entire account gets simpler and efficient for an operator. This along with products like Data gifting, Internet Me2U etc. will gain lot of traction in the future. In-fact in mature markets like the US, where data penetration is reaching higher levels, over 50% of incremental revenue growth is coming from shared accounts.
Third, customized bundles which can be purchased during Service Access – As the translation of MB into the relevance of content is increasingly becoming clear to the end user, the demand for app/service specific bundles will rise. The in App purchase options, dedicated service/app specific products will become more relevant. This will lead to more sustainable incremental data revenue as end users will get the right value for each MB.
Finally, transparency enablers – Data Volume consumption notification, ability to change the data bundle, always aware of the volume consumed type of services takes the end user experience to the next level. This coupled with transparent upselling will lead to sustainable incremental revenues.
A: How can operators support innovation within their organizations and in the wider ecosystem?
CDF: An innovative culture rests on 5 building blocks: resources, processes, values, behavior and success. Success in innovation and entrepreneurship is not only gauged by earnings but also measured by how well an organization identifies a problem in the market and matches it to a solution. Companies like ours always think with an entrepreneur’s mind and resolve problems using innovative solutions.
The unstructured nature of the African tech ecosystem or entrepreneurial space in general makes it very difficult. Most people who want to invest in Africa are of the notion that they can’t do it here because the ecosystem doesn’t exist. Some ways to support this ecosystem by the telecom industry is focusing on building ecosystems that bring together partners from around the world and to help local startups as we recently did using an app development competition in collaboration with Singtel and Samsung.
A: What will be the impact of the digital transition on the telecoms and media sector?
CDF: With the digital transition, more bandwidth is available for current and future broadband platforms like 4G, 5G, etc. which essentially leads to a better experience for the end user. There will be better experience for TV and VOD users with digitized content. Affordability will improve as the cost to deliver the content reduces through more efficient next generation technology platforms. Consumers will have access to richer global content and at the same time as the rest of the world.
A: What are the regulatory requirements for improving affordable access to broadband?
CDF: Regulators should:
·Encourage multi-stakeholder consultation on policy and regulations.
·Reduce taxes and import duties on telecommunication ICT equipment and services.
·Ensure fair distribution and allocation of Digital Dividend spectrum and put caps where appropriate.
·Encourage network and facility sharing and utilize Universal Service Funds (USFs) to close the digital divide.
·Ensure transparency and openness (e.g. by making market data and regulations available).
A: How can telecom and digital brands create more value for African consumers?
CDF: More value will be created by:
·Bringing more relevant global content at affordable prices.
·More Localized content.
·Transparency in Consumption and Charging.
·Education for the end user through simplified portals like One Touch Internet.
A: How is the role of OTT players evolving in Africa’s market? How are their relations with Telcos changing?
CDF: The African Market is still in the early stages of basic internet adoption unlike the rest of the world where OTT player entry was preceded by few years of internet users’ presence.
A typical African user experiences the Internet for the first time on a mobile device and content that’s come from a digitally mature environment. Initiatives like One touch internet and Sponsored data are the tools that would enable a faster and value added adoption of the end user to the digital world. A lot of intellectual and monetary investments along with innovative data products are required to be delivered by all drivers of the digital ecosystem including OTT players and Operators.
Telcos cannot be treated as dump pipes anymore as they have invested large sums of time and resources to ensure basic, uninterrupted access to the end user while they continue to work on improving the experience further. As Telco operators we are required to comply with local regulations and taxes which are not applicable to OTT players. Both Operators and OTT players have to co-exist and sustain their businesses, thus they both have to take bigger roles while creating combined platforms for the delivery of affordable and value added content to the end users.
A: How can the communication’s needs of enterprises be met in order to sustain economic growth in the region?
CDF: The communications needs of enterprise customers vary across the different segments and that broadens the portfolio of services required of Telcos to service enterprises. Today, Telco services address many industry verticals with varying product platforms with diverse operations ecosystems.
Telcos must approach servicing enterprises with a convergent strategy focused on converging infrastructure, products, service delivery and support with the goal of doing more with less using this as a means of meeting the diverse requirements of our businesses in a very efficient way.
As more enterprises continue to expand within the region seeking to reach more customers & markets, Telcos must create an ecosystem that is leaner, more accessible but highly cost effective while providing scalability and flexibility needed to support business growth.
A: In your opinion what are the most interesting debates to expect at AfricaCom this year?
·The changing regulatory landscape in Africa including Dominance and Significant Market Power taxation and spectrum Licensing – (Note fromAfricaCom: Hear about it in the Regulatory Panel in Connecting Africa on day 1 at 12.20)
·The adoption of data and OTT led services and the role of OTT players within the infrastructure and regulated environments. (Note fromAfricaCom: Attend the Vision for Africa keynotes on all 3 days)
·New digital services for Africa. (Note fromAfricaCom: Attend Digital Entertainment (day 1), New Revenue Streams (day 2) and Mobile Money (days 1 & 2)
·Growth and monetization of LTE in Africa (Note fromAfricaCom: Attend LTE Africa on all 3 days)
Hear more from Christian de Faria in the AfricaCom opening keynote’s Innovation Leadership Panel (Tuesday 17th November, 9am), where he will discuss how to support a culture of innovation and entrepreneurship in digital Africa with other tech leaders: ), operatorMarc Rennard (EVP AMEA, Orange Group), OTT player Markku Mäkeläinen (Director, Global Operator Partnerships, Facebook), investor & Forbes 20 Youngest Power Women in AfricaDr Jackie Chimhanzi (Senior Strategist, IDC), broadcaster & tech specialist Larry Madowo (NTV Kenya) and entrepreneur & WEF Young Global LeaderBright Simons (President, mPedigree).
Topics such as expanding infrastructure sharing to the radio access network (RAN) and opening up the market to open source-based network infrastructure are far more relevant to Africa than 5G, argues Bradley Shaw.