MNOs are well positioned to capture the opportunity in deploying IoT in Africa but need to look at the challenges first, writes Feraz Ahmed, CEO, Hayo
Mobile network operators (MNOs) operating in Africa have an opportunity to accelerate growth and monetise their network assets with IoT. In markets where MNOs have deep roots, they can play a mission-critical role in local digital transformation while capturing new revenue. They just need a path forward.
For too long, MNOs globally have prioritised consumer services that target a limited number of subscribers when enterprise and government customers can provide a limitless opportunity for growth. IoT has emerged as a driver for digital transformation and an extremely sticky service offering that MNOs in Africa can use to build monthly recurring revenue. It enables them to target vertical segments in local markets and use existing network infrastructure to deliver innovative services.
The GSMA predicts licensed cellular IoT connections in sub-Saharan Africa will nearly double between 2023 and 2030, from 27 million to 51 million. Over the same timeframe, the economic impact of mobile will grow from $140 billion to $170 billion in sub-Saharan Africa. It is a high-growth segment in a high-impact market.
MNOs are well positioned to capture the opportunity in IoT, but they have to look at how to enter the market, and do it before competitors make the first move. There are challenges, but the potential is too great to overlook.
MNOs need to find the simplest way forward and use IoT to diversify their offerings while boosting network ROI. It just takes the right partner and strategy to expand beyond traditional connectivity.
Targeting key IoT segments in Africa
IoT deployments are having a massive impact across local vertical sectors. MNOs who already serve these segments or operate in large local industries can prioritise outreach and bundle offerings to help enterprises and government initiatives to grow.
- Agriculture – by utilising IoT, farmers can track weather patterns and livestock, as well as monitor soil conditions and manage irrigation. Farmers can then direct their resources more efficiently
- Healthcare – in the healthcare sector IoT can facilitate remote patient monitoring, enabling easier access to healthcare for rural areas
- Mining – Africa is a major mining player and IoT can strengthen the continent’s status in this sector. IoT sensors are used to monitor equipment and predict any maintenance needs, reducing downtime while enhancing productivity
- Smart cities – IoT can also be used to develop smart cities, improving traffic monitoring, waste management, and providing smart lighting, with projects already underway in South Africa, Namibia, Kenya, Egypt, Algeria, Morocco, Nigeria and Ghana
- Transportation andlogistics – IoT devices improve fleet management, telematics and asset tracking to streamline transportation
Removing barriers to IoT adoption in Africa
In a rapidly growing African IoT market, MNOs need to remove barriers for going to market. They need a partner that understands common challenges in IoT, but has the local knowledge to accelerate and ensure service delivery. While digitalisation has come a long way across the continent, providers still have a number of challenges to overcome:
- SIM card management – traditional consumer SIM cards are often not optimised for business IoT use. Business IoT applications have different connectivity and data usage patterns than average consumer devices, which can lead to inefficiencies and impacted network performance. While the African connectivity market is shifting towards fulfilling modern communication demands, many areas still operate with 2G and 3G and are far from emerging technologies like 4G long term evolution (LTE) and 5G. 2G and 3G were developed with text and voice communications alone in mind, not IoT, creating further challenges
- Limited coverage – full coverage can only be achieved across Africa by leveraging multiple operators, since no single operator has complete coverage. This makes a multi-IMSI SIM solution crucial for IoT deployment across African markets
- IoT device identification – it can be difficult to identify which devices on a network are IoT devices vs. traditional consumer devices, and this is even more challenging in Africa where operational environments can hugely differ between markets. To circumvent this, advanced network analytics and device profiling techniques are required. Without these, providers can struggle to optimise the network and produce an accurate pricing model, negatively impacting monetisation
- IoT roaming regulations and pricing – Africa presents unique regulatory and pricing challenges as different regions may operate with individual roaming agreements. Standard roaming agreements may not be suitable for IoT due to the high volume of low-bandwidth data generated and the need for continuous connectivity. Providers can face complications from managing multiple contracts and billing systems across country borders, hindering IoT adoption
- Complex ecosystem – the IoT market is diverse, with various devices, manufacturers and connectivity standards, making integration complex. Device management can be complicated without the right tools, platform and expertise. Another issue is limited network coverage across Africa’s varied markets, where rural communities may lack reliable connectivity for IoT deployment
Partner strategies for IoT monetisation
Collaboration is vital for a successful IoT strategy, and MNOs must focus on establishing a unified ecosystem for their different stakeholders to work together. By working closely with an Africa-centric partner, service development, regulatory compliance, and go-to-market strategies can be delivered faster with minimal risk.
Deploying the right IoT platform can play a huge role in simplifying IoT adoption and streamlining the onboarding of new devices and applications. It can also simplify SIM card management and provisioning, reducing time-to-market and enabling new growth opportunities. The right platform will also provide standardised security protocols and compliance to reduce threats.
With an expert partner, service providers can also utilise add-on services such as Roaming Data Steering (RDS) to improve operational efficiency and customer experiences. RDS channels additional data roaming traffic from target MNOs, such as those with discounted rates. This results in reduced data usage with a higher data roaming revenue and margin return.
On-the-ground expertise is crucial for service providers to make the most of the IoT opportunity across Africa, and the right partner will provide the end-to-end support and market-specific insights needed to maximise monetisation.
Accelerating access
The IoT market in Africa is booming and enabling smarter, more efficient communications and connectivity. By developing the right strategy and working with an expert partner, MNOs can establish themselves in this rapidly growing sector.
This model is key for service providers to gain the necessary building blocks to take the lead in IoT and be the driving force for transformation in Africa. Key developments in AI and 5G are propelling IoT adoption across more African markets than ever before, and it’s time for MNOs to capitalise on this opportunity to meet growing demands, drive long-term growth, and make a lasting impact.
Feraz Ahmed is Hayo’s CEO and a global telecom innovator. His career of over two decades in telecommunications spans launching global aggregators for government voice operations to leading a 350+ team of experts. Specialising in the African and Middle Eastern markets, he has played a pivotal role in connecting these regions to the world.
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