Airtel Ghana’s CEO and current Telecoms CEO of the Year, Lucy Quist has called for more strategic partnerships and investment in Africa’s telecommunications sector.
Speaking at the Africa Development and Investment Convention (ADIC) 2016, an annual gathering of seasoned global business leaders and investors, she cited the growth in the industry, Africa’s youthful population and the majority of the continent’s population who are yet to be connected as opportunities for investment in the sector.
Africa’s place in the global telecom economy
Sharing her views on Africa’s place in the global economy, Lucy Quist said “Africa is one of the fastest growing regions in the world with a burgeoning middle class. According to the African Development Bank, between 2000 and 2010, the number of middle class Africans grew by 130m and projected to increase to 230m by 2020”.
She continued “Africa’s telecom industry remains the fastest growing in the world with a ripple effect on most economies on the continent. In 2015 telecommunication contributed $153 billion to Africa’s GDP, the equivalent of 6.7% of total GDP. In some countries such as Nigeria, it was 8.7% overtaking its mainstay – oil for the first time in the country’s history.
What you find is that telecom penetration in Africa is driving productivity and growth in line with a recent report by Deloitte and GSMA which shows that for developing economies, every 10% increase in mobile penetration is likely to increase productivity by 4.2%”.
54% of Africans are still not connected
Citing research findings from the GSMA, Mrs. Quist explained that although more than 557 million unique subscribers have been connected as at the end of 2015 – the equivalent of 46% of Africa’s total population – the continent still remains the least penetrated mobile market in the world.
“More than half a billion Africans are still not connected providing opportunities for investment in infrastructure, rural connectivity and data services to serve the remaining 54% of the current population without access”. She indicated.
Challenges in power supply and technology
Lucy Quist highlighted some of the supply side challenges confronting the telecomm industry in Africa such as power supply, population density and technology and proposed ways these can be converted into investment opportunities.
Unreliable power supply means most operators on the continent rely on alternative sources – primarily expensive diesel which adds to their operational costs.
According to the ‘Green Power for Mobile’ report authored by the GSMA in collaboration with the International Finance Corporation (IFC), energy cost constitute a major chunk of network operations cost (OPEX) for mobile operators in Africa. The energy cost for a typical tower site, according to the report, constitutes as much as 40% of the overall network OPEX.
“This presents investment opportunities in green energy sources and models suited for Africa. Not only will green energy reduce operational costs, it will also lead to a reduction in carbon emissions by more than 60%” Lucy Quist said.
Telecommunication becoming the epicenter for healthcare and financial services in Africa.
Speaking to how telecommunications is changing access and delivery of healthcare in Africa. Lucy Quist referred to the recently launched drones delivery programme in Kigali, Rwanda where Zipline – a California based Technology firm – is running the world’s first drone service for medical deliveries to remote townships and Airtel’s partnership with Apollo Hospitals in India to launch ‘Ask-Apollo’ a telemedicine initiative designed to provide quality health care for millions across the continent without the associated cost expended to travel outside of their home countries to access medical care as examples of how telecommunications is shaping healthcare delivery in Africa.
She said “The challenges of inaccessible road networks to remote townships will no longer be a barrier to accessing quality health care. Through the drones’ delivery service launched in Rwanda, which is likely to be replicated across the continent, essential medical deliveries can be transported to remote areas in minutes instead of days. Meaning patients can receive their much needed blood transfusions for example, when they need them”.
She continued “Ask Apollo, the telemedicine initiative by Airtel and Apollo Hospitals enables many Africans to access healthcare from the comfort of their home countries. With this web & mobile enabled patient-centric service, the expertise of world-renowned doctors are now available in many local health centers, through face-face video conferencing, saving money, time and energy.
Telecommunications is at the center of it all – from the data services that power coordination of ‘Zip’ flights to the voice and messaging services that connect medical teams to patients across continents. Without a vibrant telecom industry, this would not have been possible”
Tracing the history of mobile financial services in Africa, from the mid-2000s, she shared the success story of Mobile Money initiated in Kenya to extend financial services to majority of Kenyans who were outside the formal financial system to the current state where the platform has transformed the financial system and has become the dominant medium for financial transactions in the country and across the continent, offering direct and indirect employment to thousands of Africans.
Concluding, Lucy Quist encouraged investors to be open to the opportunities Africa presents in telecommunications infrastructure, Fibre, LTE, rural connectivity and Wi-Fi access in open places. She said “Africa will remain the desired investment destination for many industries, including telecommunications for the foreseeable future. The time to take that bold step and invest on the continent is now”.
The Africa Development and Investment Convention is an annual event organised by the African Infrastructure Development Partnership, a Swiss-based organization offering alternative approaches to Africa’s development.