One size does not fit all – AME: a region of extremes

As a mobile communications market, the AME region is one of extremes in terms of subscriber types, user needs and the opportunities for operators to make money.

It’s a region where one size does not fit all, but with the dust now settling following the recent Bharti/ Zain developments, interesting times lay ahead for this upwardly mobile region.  Richard1aRichard Choi, Chief Commercial Officer, Jinny SoftwareEditor of Communications Africa, Andrew Croft, talks to Jinny Software’s Richard Choi, Chief Commercial Officer and, Regional Director - Middle East, Africa and Asia, Aniket Deuskar, to gain their qualified views.

Communications Africa: How has mobile telephony and latest services and technologies impacted the social fabric of AME societies?

Richard Choi: Mobile telephony has had a massive impact on society in the AME region. In most countries, deploying mobile networks makes a massive contribution to that country’s GDP. Mobile phones enable communication, which is at the heart of social, political and commercial development of all societies. From the simplest benefit of allowing people to communicate anywhere on the continent to the empowerment and enablement of services, such as micropayments and mobile financial services, mobile telephony has been a major contributor to the emergence of AME as an economic power.

Aniket Deuskar: Mobile telephony really does help integrate the rural poor into the economy, by increasing their ability to buy and sell goods at fair market prices and by reducing time and real costs in moving around the country to trade and to repatriate earnings. These mobile money transactions, as Richard says, have really impacted the social environment, through the simple ability to enable airtime transfer, for such users as migrant workers to send money back home.

Voice SMS is another way that mobile technology is helping those who are illiterate to communicate cheaply and efficiently. There have also been examples, especially in Africa, where mobile technology has been used to highlight health issues; a campaign run by Vodacom South Africa to highlight AIDS awareness and promote testing was one such high-profile application. The reach of that campaign was phenomenal, and I the number of tests increased as a result.

I recall a statistic that an average of 10 mobile phones per 100 members of the population in a developing country can be directly correlated with a per-capita-GDP growth 0.6 percent higher than an otherwise identical country without mobile phones.

Communications Africa: With a wide range of subscribers from prepaid low-disposable-income users, to contract subs with high disposable income across the AME region, does this affect how MNOs are delivering services such as messaging and VAS?

Richard Choi: The wide range of subscriber types presents significant opportunities and challenges to MNOs across the region. High-value contract subscribers have embraced mobile data services and are prime targets to increase ARPU from content delivered over SMS, MMS, IM, Social Networking and mobile browsing. But competitive pressures mean MNOs are challenged to win and keep high-value customers, while, at the same time, managing all the associated capital and operational costs.

Lower income users represent opportunities given the low penetration in many markets, although their service uptake typically shows lower usage and the adoption of simpler services. On average, 95% of subscribers in the region, particularly Africa, have been prepaid.

Aniket Deuskar: There is a shift towards offering particular packages to particular subscriber-base segments, as opposed to the traditional ‘one-shoe-size-fits-all’ approach. Giving customers the opportunity to buy air time and messages in a bundled package, which gives operators up-front revenues and the subscriber potential discounts on the services, is one approach. With the higher end subscriber the focus is more on the data packages, with blackberry and iPhones and other smart phones being sold in ever more increasing numbers. More and more operators are also introducing loyalty management systems to try to attract and retain subscribers.

Aniket_4Aniket Deuskar, Regional Director - Middle East, Africa and Asia, Jinny SoftwareCommunications Africa: How does this affect the kinds of services offered and the potential revenues generated?

Aniket Deuskar:   Messaging has helped operators drive revenue through call completion solutions, which utilise our messaging platform with such VAS as missed-call notice and call-me-back. As more and more calls get completed the operator generates more revenue.

Richard Choi: Operators are targeting different services at the different subscriber demographics. Lower-income subscribers are less likely to contribute significant call revenues and are more likely to use messaging-based services, although many such users also have limited literacy, as Aniket mentioned, restricting even their text messaging. Operators are still growing revenues from these subscribers by offering competitive tariff plans, such as low-cost bundles of SMS or plans that charge messages per character. These kinds of offerings encourage use, no matter how brief the message may be. And the upside is that for every message sent, there will typically be a message returned, adding to the revenue collected. Higher-ARPU subscribers are demanding more sophisticated services and such innovations as instant messaging are being integrated with SMS and MMS, and social networking is being integrated with all forms of messaging. This is driving new revenues right across the subscriber base. With ever increasing varieties of content services, even USSD is being used to generate new revenues from VAS, such as mobile banking and mobile payments.

Communications Africa: What are the key market areas in the AME region in which Jinny has a foothold and/or leading position?

Aniket Deuskar: Africa has been a good market for us with Southern African customers in Botswana and Namibia, East African customers in Kenya, Tanzania, and Uganda, West African customers in Nigeria, Senegal, Mauritania, North African customers in Algeria, Tunisia, and Central African customers in the DRC, Niger, and Zambia. We also have a strong presence in the Middle East, with customers throughout the region.

We have a support office in Kenya, which is one of our strongest footholds is in East Africa. We recently announced a milestone that 80 per cent of all messaging in Kenya is conducted across our platforms, which is an indication that we have become very successful in that market. Also, in both Kenya and Tanzania our SMSC platform is being used for all the MPeza traffic, which again shows that our platforms are demonstrating the absolute reliability required for these mobile banking transactions.

Communications Africa: What are the trends by MNOs in the region which provide best opportunities for vendors like Jinny?

Richard Choi: The most common trend in the last few years has been maximising revenues by focussing on operational efficiency while deploying new revenue-generating services. There is also a growing trend to outsource the operational management of core network equipment including messaging and VAS. Jinny is perfectly positioned to capitalise on these opportunities. We have been working with our existing customers to minimise costs and launch new services such as ringback tones, voice messaging, instant messaging and mobile advertising. We are also offering a complete managed service for mobile advertising, which will deliver a complete end-to-end service for customers in this exciting new business area.

Aniket Deuskar: Following on from that last point, m anaged services and standardisation of platforms/vendors definitely appear to be growing trends among a number of operators in the region, which have, as Richard mentioned, outsourced their core network elements to companies such as Ericsson and NSN, and VAS is included in that. Many operators/groups are looking to consolidate their vendor lists down to 2-3 for each product set in order to reduce total cost of ownership and improve maintenance and support contracts. The inherent benefits of having fewer points of contact include less training requirements, as well as better up-front investment terms on potentially bulk deals. This should hopefully be a win-win situation for both operator and vendor.

Operators are also sweating their existing assets to get the most out of them by adding new features such as personalisation for the messaging services, or revenue-generating features on services such as ring back tone.

Communications Africa: The region has seen much uncertainty around Zain developments. How do you see these changes affecting what is on offer to users in the region and also the opportunities for vendors such as Jinny?

Richard Choi: The ZAIN Group had implemented the ONE strategy where standardisation of services across the group allowed them to build the greatest economies of scale and ensure all customers in any of their operating countries had access to the latest services. The logic in that strategy persists, whether it is ZAIN in MENA or the Bharti-acquired ZAIN MNOs in Africa. So I expect that all of the MNOs in question will continue to offer the very latest services to their subscribers across their group portfolio.

The opportunity for Jinny in this changing environment remains the same. We provide a unified portfolio of market-leading service-enablers across the MNOs in question. From messaging to call & media or mobile advertising services, the Jinny standard platform (JSP) provides the lowest capital and operational costs that can be achieved through those economies of scale.

Aniket Deuskar: We’ve had a very long partnership with the Zain Group throughout the operator’s various guises, i.e. MTC, Celtel and Zain. Now that the deal with Bharti has been completed, it removes one area of uncertainty and speculation, but as they haven’t taken full management control of the African operators, we will not know for sure how they will want to run the operations for some time. Based on what they have done in India, we expect that they will look towards managed services for both core network and other services, such as VAS. Within the existing Zain/Bharti operator group we have a strong presence and have grown our portfolio with several of the operators by offering cost-effective quality solutions that build upon the existing infrastructure, thereby reducing both CAPX and OPEX costs. We believe we will still have this opportunity as the Bharti era unfolds.

Communications Africa: Does Jinny have any latest implementation developments which you can share with Comms Africa readers?

Aniket Deuskar: We have a number of implementations currently ongoing. These range between call completion solutions and SMSC upgrades, to implementations of a separate messaging platform for mobile money transactions, which is another trend we are seeing, both for a regulatory requirement but also to ensure efficient delivery of such transactions. We are also implementing our SMS Router and bundling solutions which will allow the operator to offer flexible messaging packages at various prices for a specific period of time.

Communications Africa: Will we see any regional contract wins in the coming months for Jinny?

Aniket Deuskar: this space!



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