Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Emerging Tech

Optiva: Africa MVNO outlook for 2024

Article Image
Africa's Mobile Virtual Network Operators (MVNOs) looking to enhance their success in 2024 need to put innovation at the heart of their strategy and embrace artificial intelligence (AI) and machine learning (ML) capabilities.

That is the view of Optiva's VP for Europe, Middle East and Africa, Salman Tariq, who was speaking to Connecting Africa in an interview.

"This means not just digitizing customer interactions but also integrating digital processes throughout their entire value chain. By evaluating and optimizing every step of their digital journey, MVNOs can ensure they are delivering services as efficiently and effectively as possible," he explained.

Cloud telecoms company Optiva has been working in the African telecoms landscape for over a decade in markets such as South Africa, Tanzania, Mozambique, Uganda, Kenya, Tunisia and Morocco.

Optiva provides cloud-native revenue management software for both mobile network operators (MNOs) and MVNOs, delivered globally on the private and public cloud.

"Africa is a very interesting region to operate in because it's still an emerging market. Our focus primarily lies with full MVNOs those who drive their own product and technology strategies rather than traditional branded resellers," Tariq said of its work with MVNOs in particular.

He said Optiva's partnerships with local MVNOs are growing and it is gearing up to support new entrants in Nigeria, slated to launch services in 2024.

"This initiative in Nigeria is particularly noteworthy as it promises to serve as a valuable case study for other African markets, demonstrating how an open market approach can spur competition and market growth," he added.

Tariq believes MVNOs play a pivotal role in enhancing Africa's mobile economy and contributing to the continent's broader socio-economic development.

"The growth of the telecom sector is a proven critical driver in developing economies, with studies indicating that a 10% increase in telecom penetration can lead to a 1.5% increase in economic growth. This relationship underscores the significant impact that enhanced connectivity can have on overall economic development," he said.

"In Africa, where many markets are still underserved in terms of telecom penetration, MVNOs have a unique opportunity to bridge this gap. By collaborating with MNOs, they can extend telecom services to underserved areas, thereby facilitating greater access to communication and digital services," Tariq added.

In 2024, the role of MVNOs in Africa is expected to become even more crucial.

"Specializing in niche segments, MVNOs are ideally positioned to drive the growth and adoption of connectivity and specialized digital services tailored to specific market needs. Their agility and focus on particular customer segments allow them to innovate and provide services that might not be economically viable for larger MNOs," he said.

Embracing AI-enabled networks

Tariq believes that AI and ML applications hold immense promise across the entire telecom sector, offering growth and efficiency gains.

"For MVNOs, particularly those targeting specific customer segments, the application of AI can be a game-changer. However, their size and focus mean they face unique challenges: some may not have the resources to exploit AI fully, while others might innovate with in-house AI solutions that disrupt the market," he said.

Optiva provides a supportive framework, enabling MVNOs to leverage AI effectively through open monetization platforms that integrate with external systems, allowing for real-time actions based on closed feedback loops.

It has partnerships with global hyperscalers like Google Cloud and Microsoft Azure to further enhance this capability.

"Navigating the AI landscape in telecom, especially for MVNOs, requires a careful balance between ambition and practicality. The key is to focus on AI use cases that align with the MVNO's strategic objectives and operational strengths. For example, integrating AI into customer experience components is an area we've been exploring, and it's showing great potential in transforming how end-users interact with services," he explained.

Salman Tariq, Optiva's VP for Europe, Middle East and Africa.   (Source: Optiva)
Salman Tariq, Optiva's VP for Europe, Middle East and Africa.
(Source: Optiva)

However, it's crucial for MVNOs to approach AI with a clear understanding of their goals and limitations.

"Investments in AI should be driven by solid business cases, not just the allure of the technology's potential. Our role is to guide MVNOs through this process, helping them embrace AI-driven innovation in a way that is sustainable and conducive to their growth. This approach ensures that the adoption of AI and ML in their operations is not just a technological upgrade, but a strategic step forward," he added.

Tariq believes that innovation should be at the heart of an MVNO's strategy and staying abreast of emerging technologies like AI, 5G, zero-touch onboarding, eSIMs, and even exploring opportunities in the Metaverse, can provide MVNOs with a competitive edge.

"By combining a strong digital approach with innovative offerings and a compelling brand, MVNOs can position themselves for greater success in the dynamic telecom landscape of 2024," he added.

Challenges facing MVNOs in 2024

Tariq said the two biggest challenges MVNOs will face over the next year are growth and differentiation or "value-add."

"Customers are increasingly looking for more than just traditional telecom services; they seek innovative, value-added offerings that align with their digital lifestyles. This shift requires MVNOs to continually adapt and innovate, which can prove difficult, especially for smaller players with limited resources at a time when the market is becoming somewhat saturated," he explained.

A constrained economic outlook in many countries, changes in consumer spending power, and the overall investment climate will also significantly impact the growth and sustainability of MVNOs.

"Despite these challenges, the MVNO market still holds considerable potential. The key to tapping into this potential lies in agility, innovative service offerings, and the ability to effectively respond to changing market dynamics and customer preferences," he said.

Regulating MVNOs

When it comes to regulation of the MVNO market in Africa, Tariq believes the best approach is through a staged model.

Initially, regulators play a crucial role in opening the market to new MVNO entrants and there may be a need to compel MNOs to cooperate with MVNOs.

"It's important to recognize that building robust network infrastructures is a significant investment for MNOs, and their efforts to recoup this investment must be protected by regulators. At the same time, the regulatory framework should support the growth of startup MVNOs, which are unlikely to have the size and scale of mature MNOs," he explained.

"Easing restrictions on these emerging MVNOs is essential, and this should be reflected in the initial cost of MVNO licenses to avoid creating barriers for smaller players," he added.

However, as the market evolves and MVNO penetration reaches significant levels, typically around 10% or more, Tariq believes regulatory focus should shift.

"At this stage, regulations should aim to protect consumer interests and ensure that MVNOs are making necessary investments in line with these goals," he said.

It's also important for regulators to monitor market consolidation trends, particularly as successful MVNOs may become acquisition targets for larger MNOs.

"Regulators need to ensure that such consolidations do not lead to a monopoly, maintaining a healthy balance in the market. This staged approach to regulation allows for the growth and development of MVNOs while ensuring a competitive and fair market that ultimately benefits consumers," he concluded.

Related posts:

*Top image source: Freepik.

— Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Illara Health aims to improve quality of care in Kenya

Kenyan healthtech startup Illara Health aspires to improve the quality of care in the country's clinics by providing equipment financing and digitizing facilities with its software.

Story

Orange opens digital center in Guinea-Bissau

Pan-African operator Orange has opened an Orange Digital Center (ODC) in Guinea-Bissau.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Follow us on X

Industry announcements

More Industry announcements

Upcoming events

Cyber Revolution Summit
August 9, 2024
Gaborone, Botswana
Africa Tech Festival 2024
November 12-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives

Story

Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.

Story

The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.

Story

Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives

Story

Leadership Lessons: The importance of mentorship for career growth

By Nollie Maoto

Nollie Maoto, First Rand Group's compliance chief data and analytics officer and Africa Tech Festival Leadership Council member, reflects on the importance of mentorship for career growth for African women in data analytics.

Story

Omdia View: May 2024

By Omdia Analysts

May 2024's telecoms highlights in the Middle East and Africa included African 5G subscriptions surpassing 5 million, growth from SpaceX's satellite Internet service Starlink, and a major fiber partnership in the Middle East and North Africa.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up
Tag id test-002