• Friday, September 29, 2023
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Telcos bank on digital content growth to offset falling voice revenue


Telecommunications companies in Nigeria, Africa’s largest economy, are hopeful that the recent foray into digital content development as a viable means of driving broadband usage amongst subscribers will offset the steady decline in voice revenue, industry insiders have said.

Voice service pricing has taken a huge blow in recent times as a result of intense competitive and regulatory pressures, according to them. With mobile Average Revenue Per User (ARPU) declining by 4 percent in FY 2013, driven largely by cuts to mobile termination rates fain April last year, industry insiders have predicted that the telecoms market will witness a wave of growth in digital content over the coming 12 months. This is even as smartphone ownership explodes and subscribers become more sophisticated in the usage of mobile applications.

The number of smartphone users is expected to increase to more than 35 million in 2017 from 5.6 million at the end of 2012, according to a research study by Informa Telecoms & Media.

“African telecom service providers are intensifying their efforts to develop their own application stores and generate local content, with smartphone shipments up more than 40 percent year Helon-year in 2013”, said Spiwe Chireka, programme manager for telecommunications and media at IDC Africa.

These developments as well as the growth in mobile data consumption through smart devices are setting the scene for spread and use of smartphones and mobile applications in 2014, according to Chireka. 57.8 million subscribers on the network of major GSM firms in Nigeria use mobile data, according to the Nigerian Communications Commission (NCC).

BusinessDay checks reveal that mobile operators and phone manufacturers are seeking direct ties with indigenous software applications developers with a view to pushing out more devices packed with locally relevant digital content into the market.

Osondu Nwokoro, director, regulatory affairs, Airtel Nigeria

“We are aggressively working with the original equipment manufacturers (OEMs) to push devices into the hands of Nigerians”, said Osondu Nwokoro, director, regulatory affairs, Airtel Nigeria.

“Content and applications drive broadband usage. So, we are supporting local content development by providing sponsorships to app developers”, he added. With app developers earning 50 percent to 70 percent of retail price via the app-store platforms of Apple, Google, Blackberry and Windows incubating young developers’ innovation could have significant multiplier effect on the economy.

In view of this, a rash of software incubation centres and accelerators has also erupted in Lagos – another development that supports the emergence of a digital economy.

MTN, emerging market focused firm, recently opened up its network to indigenous mobile applications developers seeking a platform to showcase the unique innovation.

“We are engaging young people to develop relevant applications. When these apps become commercially viable, we share the revenue with developers”, said Wale Goodluck, corporate services executive, MTN, at the Telecoms Consumer Parliament held in Lagos.

Kenneth Omeruo, chief executive officer of TechTrends, is of the view that there is need for more content platforms so as to lower barriers to entry, increase access and provide tools for people who have great ideas to make money from.

Meanwhile, telecoms operators have continued to invest in broadband infrastructure deployment to cater to the growing demand for mobile data.

“Over the next one year, we will make 3G service available across major cities in the country. In the next two years, fibre will be available in all major cities. We also intend to create Internet hotspots in areas with high concentration of people and businesses”, said Aremu Olajide, director at Globacom, while intimating an industry forum on the company’s plan for the new year.