Africa is an exciting place for ambitious businesses with designs on expansion.
It’s a vast continent brimming with opportunities resulting from an increasingly urbanised population with growing spending power, but this is not to say that telcos can rush in without a plan of action. It’s also an increasingly competitive space full of nuance and asymmetry, so ISPs should carefully consider their every move when expanding in Africa.
Too many businesses make the fundamental mistake of copying and pasting a formula which worked elsewhere when they approach expansion in Africa, then apply it far and wide. The reality is that Africa consists of 54 independent nations and each one is unique. Each country is made up of people who differ widely in culture, language and levels of affluence. Each market has its own challenges and advantages, and businesses need to navigate an array of different preferences, behaviours and accepted business practices.
Instead of being daunted by this, businesses should forge ahead and pursue their growth ambitions, but they should do this with a carefully considered strategy. The first step is thorough research that focuses on specific variables.
Where to invest
When considering which regions to target first, look carefully at what services are available in the area and weigh that up against what your business can offer and at what price. The ability to offer a competitive rate might hinge on what infrastructure is accessible in the region, and how much will need to be invested in building new infrastructure. If the market is nearing maturation and is already saturated with competing providers, differentiating your brand will be especially challenging and the average return per user will be low.
Make investments where they matter. Developing new infrastructure such as base stations in underserved locations unlocks new markets where potential customers are hungry for connectivity. But where infrastructure already exists, consider leveraging it. Tower-sharing is a popular practice to increase return on investment for established providers, and a great way for newcomers to expand their networks with reduced operational costs and capital expenditure. A number of African governments have even begun to enforce sharing relationships through legislation.
What to offer
Any product or service offered in Africa must be appropriate for the African context. Aim to solve challenges and add value wherever possible. For example, consider the fact that many consumers are unbanked and look at alternative payment methods to accommodate them.
Innovation is the key to overcoming these hurdles – from UX to sales and marketing strategies. Channels of communication also require a bit more thought in new African markets. Few customers are likely to check into the company website, so consider non-traditional means of broadcasting news and information that affects them. The secret is to reach them where they are, on the OTT platforms they’re actively using or even in physical public spaces.
Educating customers can form part of your marketing strategy. This approach adds value while fostering credibility for your brand, and a successful campaign can make your brand a household name for years to come.
Choose a good partner
The lack of continuity in Africa extends to the regulatory environment, an area ISPs cannot afford to overlook. Ultimately, it’s the sovereign laws of 54 African states that determine how ISPs can operate on the continent, and not only in terms of licensing. Labour laws and regulations on communications and data privacy play a defining role for ISPs in any given region. Navigating such a complex regulatory environment is a daunting prospect for a new entrant, yet failing to do so correctly can prove to be a costly mistake as there is a possibility of legal consequences.
Partnering with a company that is entrenched in a specific market and is accustomed to working with the regulations in that region is the best way to circumvent these challenges. In fact, such a partnership – with an established provider that can demonstrate a solid track record, extensive investments in infrastructure and a wealth of experience – offers a host of far-reaching benefits that can make all the difference between success and failure.
IS provides all that and more, with 25 years of proven commitment to building networks and relationships across Africa. Bear that in mind when it’s time to expand your business by partnering with a telecommunication provider.