{"id":563,"date":"2019-02-12T09:43:36","date_gmt":"2019-02-12T07:43:36","guid":{"rendered":"http:\/\/www.jongore.com\/blog\/?p=563"},"modified":"2019-02-12T09:43:36","modified_gmt":"2019-02-12T07:43:36","slug":"unbundling-in-the-telco-sector","status":"publish","type":"post","link":"https:\/\/www.jongore.com\/blog\/uncategorized\/unbundling-in-the-telco-sector\/","title":{"rendered":"Unbundling In The Telco Sector"},"content":{"rendered":"\n

Telco operators (MNOs) across Africa are experiencing declining revenues in their core businesses. Generally, in the past seven years, OTT players have taken up to 40% of the market in messaging, 25% in fixed voice, and 7% in mobile voice. In Africa, I’m willing to bet that’s 50%-75% higher for smartphone users. <\/p>\n\n\n\n

When I moved to the continent ten years ago BBM was the data messenger of choice. At that point, the MNOs had a firm grasp on Blackberry distribution as well, often requiring hefty postpaid contracts to qualify for a blackberry. Then, as data penetration grew and data prices started dropping, new better messaging solutions appeared. Messenger, WhatsApp, and weChat<\/g> all appeared and made it dead simple to communicate with anyone around the world. These apps spread like wildfire. There was no hardware restriction either, so the MNOs couldn’t extract rents on the phone. The growth of Android and cheap handsets just poured fuel on the fire. <\/p>\n\n\n\n

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Over my first 5 years in Africa<\/g> there was a rapid and fundamental shift in the way people in Africa communicate. That is a tiny amount of time for an industry to change. I now almost exclusively use WhatsApp and Facetime now. I don’t buy SMS bundles and I have a minimal amount of minutes on my phone at any time. I’m not the average demographic in Africa, but I am close to the average mobile phone user. I use a prepaid sim topped up monthly with a bundle I purchase from my MNO. After that, I represent no additional revenue to the MNO. (Unless they’ve figured out how to monetize my data.) <\/p>\n\n\n\n

There’s another revenue vertical in Africa that I think will be unbundled soon. That is payments. When I think about M-Pesa it’s clear to me how successful they’ve been but also how arrogant they’ve become. They’ve disintermediated the banks and now account for over 20% of Safaricom’s revenue. But what’s their moat? There’s the distribution network, with physical points managed by franchises, but that is eroding. That erosion won’t be quick, but it will happen. Banks will swing back hard with credit cards and digital payments. New payment systems might move in, and even cryptocurrencies will have an impact. Then there’s the technology itself, which isn’t much of a moat. Frustratnigly<\/g>, they’ve been slow to open it up to developers and the innovation on the M-Pesa platform has been bad at best. There’s is also their connection to the government and the people, but one of those is fragile and the other fickle. So really, it’s about their control of the access points to cash. Large payment companies and startups are going to start chipping away at that. Change comes quickly, and right now I can see the first sparks flashing. The MNOs should start preparing.<\/p>\n","protected":false},"excerpt":{"rendered":"

Telco operators (MNOs) across Africa are experiencing declining revenues in their core businesses. Generally, in the past seven years, OTT players have taken up to 40% of the market in messaging, 25% in fixed voice, and 7% in mobile voice. In Africa, I’m willing to bet that’s 50%-75% higher for smartphone users. When I moved […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-563","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/posts\/563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/comments?post=563"}],"version-history":[{"count":1,"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/posts\/563\/revisions"}],"predecessor-version":[{"id":573,"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/posts\/563\/revisions\/573"}],"wp:attachment":[{"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/media?parent=563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/categories?post=563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jongore.com\/blog\/wp-json\/wp\/v2\/tags?post=563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}