The Telecommunication in Sub-Saharan Africa is on the verge of maturity. A majority of the population already have access to a SIM card if not two. Evolving customer preferences will dip Telcos’ revenues unless companies alter their strategies.
A report by Bain and Company predicts that recurring mobile revenues will drop by 5% owing to changing consumer behavior. In South Africa, voice revenues declined by 10% between 2013-2018 as customers shifted to data applications. Both Nigeria and South Africa experience regular SIM swaps as customers pursue better network and value.
Telcos cannot stick to the current price wars as saturation has reduced the effectiveness of low-cost offerings. Telecommunication companies should, therefore, switch from archaic product-based strategies to customer-centric solutions which leverage on customer experiences. Companies that invest in the right choices on the following might secure long-term victory.
Growing your market through network and devices
Network quality is the most important criterion for customers choosing mobile operator in Sub-Saharan Africa. A survey in Nigeria revealed that 25% of the customers have secondary SIM cards because of better network coverage. Operators should consider targeted, demand-based investments to improve network coverage and capacity. A Bain research confirms that enhanced network coverage in areas with high disposable income can reduce the payback period to roughly three years.
Additionally, increased smartphone penetration allows firms to rope in customers to access their networks. Perhaps Telcos should offer market branded, low-cost devices or phones with a subsidy plan for a certain lock-in period.
However, operators should balance networks and devices. A strong network without enough devices will erode return on investment on networks. Inversely, more channels without adequate network coverage will impair the customer experience.
Understanding customer needs when choosing between price and experience
Mature mobile markets like Sub-Saharan Africa require operators to maximize customer spending to claim additional value. Such a goal requires telcos to simplify their postpaid offerings, customize their prepaid, and offer unbeatable customer experience. More straightforward postpaid with a clear value proposition and streamlined packages would increase postpaid revenues. Therefore, customers would find it easy to join a network and harder to swap to another.
At the same time, companies can use machine learning and analytics to offer highly customized offerings which resonate with customers’ willingness to pay. Such personalized offerings will allow operators to provide the right amount of data at the right time and price, therefore urging users to adopt postpaid subscriptions.
Without seamless customer service, customization and simplification have little to achieve. Digitized services that give users the freedom to find and act on information when they need it would help overcome challenges like technical support and billing issues; top customer complaints according to the Bain report.
Choosing whether to be an operator or an innovator
Companies can decide to channel their resources to provide connectivity services and infrastructure. Firms who choose to will allow them to increase average revenue per user and drive a higher volume of mobile services. While an operator can decide to build their own FMC infrastructure, Bain recommends that they expand their capabilities by acquiring existing fiber players.
Otherwise, an operator can decide to channel innovative efforts to capture customers users through a customer-centric lifestyle platform. For instance, Safaricom created Mpesa, which generates 28% of the company’s revenues.
Telcos can reap higher revenues through creating an ecosystem. End-to-end apps drive transaction and subscription fees as well as data consumption.
Mobile operators in Sub-Saharan Africa will have to act in time to save their companies from the impending doom. Interventions like massive investment in devices is needed as data-driven personalization requires time and strategic investment, which is slowly ebbing away.
