The Covid 19 pandemic has had a colossal impact on business revenues across the world, but enterprises in Africa could be set to bounce back quickly, thanks in part to the ongoing digitalisation of the continent’s telcos.
In the run up to the GSMA’s Thrive Africa event, CommsMEA spoke with ZTE’s SVP and president of overseas sales, Xiao Ming to find out how robust digitalisation programmes are helping African telcos to bounce back from the impact of the Covid 19 pandemic.
“Compared with other industries, the telecom industry in Africa has shown very strong risk-resistant capabilities in the past six months. The revenues of operators such as MTN and Airtel have increased steadily, and user traffic, especially data traffic, has increased rapidly. This phenomenon shows that African people, enterprises and government are increasingly dependent on information communication, the communication infrastructure and services are becoming as important as other civil facilities. Of course, more industries have been hit hard by this epidemic, and people's lives and work have been greatly affected. The rapid recovery of Africa's economy is imperative for digital transformation of all walks of life,” he explained.
4G and the digitalisation of the telco
While markets in Europe, North America and Asia Pacific are pushing ahead with their 5G rollouts, operators in Africa also have one eye on next generation connectivity, with a number of telcos launching their fledgling 5G networks on the continent this year. However, the main challenge for operators in Africa remains the expansion of their 4G networks.
“The accelerated digital reform of the African economy stimulated by the epidemic is an opportunity and a challenge. At present, the overall ICT technology level in Africa is unbalanced, and there are large differences between regions and countries. This restricts the development of smart education, medical care, finance, and digital production industries such as agriculture and industry that require broadband Internet technology in Africa,” Xiao Ming explained.
With years of experience in helping operators in Europe and Asia rapidly build out their 4G networks over the past decade, ZTE is ideally positioned to help African telcos fast track their digitalisation efforts and build out the reach of their 4G networks. With Africa’s disparate telecoms climate, this could see operators in some developing markets skipping 3G technology altogether and transferring the bulk of their network traffic directly from 2G to 4G services.
“To fully utilise and release the potential of mobile broadband technology, it is necessary to increase and accelerate the investment in 4G infrastructure network construction. In appropriate countries, we can even cross the 3G stage and directly enter the large-scale deployment of 4G. ZTE has sufficient experience in this regard. If 4G is compared to an information highway, then 5G is an integrated transportation network of land, sea and air. In the new situation, both of them are equally important and need to be developed in coordination,” he explained.
Xiao Ming believes that operators in Africa will benefit from having kept their 5G rollout plans on ice. As operators in Asia and Europe battled to be among the first to roll out next generation connectivity, African operators will benefit from reduced capital expenditure costs, as large scale rollouts in China and Europe drive down the cost of 5G network components.
“With the large-scale commercial and industrial application deployment of 5G in China and other regions in 2020, the cost of 5G network construction will drop significantly, the industrial transformation and economic benefits driven by 5G will greatly increase. 5G is even considered as a booster to realise the industrial 4.0 leap forward in Africa.
“ZTE has cooperated with many leading operators on 5G such as MTN, AT, and ATM, and looks forward to working with more operators and industry partners to promote large-scale 5G deployment and 5G vertical applications to empower digital development of African industries,” he explained.
Looking to the future
As operators continue their digitalisation programmes amidst the uncertainty of the ongoing pandemic, Xiao Ming believes that the future is bright for telcos and enterprises alike. Connectivity will continue to fuel the continent’s resilient response to the pandemic, as telcos continue to evolve the portfolio of digital services they offer.
“As the Africa pandemic has not been fully controlled, it is still unclear how much the impact on the overall economy will be, in addition, the situation of countries and operators is quite different, and it is difficult to clearly predict the specific changes in the African telecommunications market. However, based on our exchanges with operators and the progress of cooperation projects, I believe that the risk-resistant capabilities of the African telecommunications market in the first half of the year will continue to be maintained in the second half of the year. Even if they are affected, the income decline rate will be in the single-digit range, and investment prudence will be reduced in 2021,” he explained.
As governments across the continent continue to implement lockdowns and other containment strategies in response to the pandemic, distance learning and remote working will remain key strategies to ensuring that life continues as normal.
“In the short-term, the growth and popularisation of teleconferencing, telecommuting, online education, mobile payment, video, social applications and e-commerce applications will have a positive impact on the current network development from coverage to capacity, from platform to architecture.
“In the medium and long term, African operators are also faced with the pressure of service growth and slower revenue growth. The introduction of digital transformation and innovative technologies such as 5G+ cloud +AI can improve the efficiency. We will promote business and business model innovation, empower operators to cope with risks across domains, further empower vertical industries, and bring new growth.
“Therefore, in the next one to two years, operators will continue to play their important role as information channels in the fight against the epidemic and the post-epidemic economic recovery, and actively respond to new market demands to enhance network service capabilities. On the other hand, operators will re-examine and formulate strategic plans for corporate transformation and network construction in the new situation. As always, ZTE will invest firmly in R&D, give full play to the efficient and cooperative advantages brought by its digital transformation, and provide customers with secure, reliable, and highly competitive end-to-end product solutions and services, to fully assist operators in network transformation and operation transformation,” he concluded.
ZTE will be taking a full and active part in the GSMA’s forthcoming Thrive Africa virtual event. for more information on how ZTE will be sharing its expertise at the event.