For years, we’ve been talking about the transformation happening across the telecoms space.
As part of this evolution, the industry’s big players are moving beyond being providers of voice and data services to become full-fledged technology companies.
What Safaricom did with M-Pesa is one of the clearest examples of a telco transforming into a true ‘techco’. For this telco, the move was driven almost entirely by the success of its mobile money platform, M-Pesa.
M-Pesa started out as a simple tool for sending and receiving cash but has since grown into a fully fledged fintech ecosystem that is central to Kenya’s economy.
In fact, a 2024 GSMA report, suggests that the broader mobile-money ecosystem increased Kenya’s GDP by up to 8.6 % in 2023 compared to what it would have been without it.
For Safaricom, this evolution shows how a telco can become a technology company by solving real-world problems at scale but still with connectivity as the foundation of its offering.
Unfortunately, legacy systems can prevent telcos from evolving into tech-driven companies because they are rigid, expensive to maintain and can’t support the speed and flexibility needed to provide modern digital services.
For example, many operators still rely on outdated OSS/BSS stacks that make it difficult to get a single view of the customer or automate even basic processes.
Legacy OSS/BSS solutions were built for simple use cases – SMS, voice, data – and can’t really handle the variety of services that define the modern ‘techco’.
These monolithic systems are so complex that trying to introduce even a single change requires months of work, redesigns and change requests. Not only does this slow down operations, but it can also hinder flexibility and dramatically drive up costs. Also, remember that legacy systems aren’t API-enabled.
This means that they are very siloed, which limits communication between platforms and makes expanding into new product areas incredibly complex.
To unlock the ‘techco’ vision and expand the breadth of products and services under a single telco brand, operators need to find the right technology partners to help them innovate at the speed the market now demands.
This transition is more than just an architectural shift, it’s about providing the operational foundations needed for telcos to become ‘techcos’.
In the case of the OSS/BSS solutions mentioned above, this entails leveraging API-first architecture so that telcos can seamlessly partner with fintech providers, content platforms, IoT ecosystems, and enterprise technology vendors.
The right technology partner can help operators deliver convergent billing, which allows telcos to invoice diverse service types in a single customer bill, and modular, cloud-native design so that operators can scale specific components independently.
And where telcos want to venture into the mobile money space, the right technology partner will help them to access real-time transaction processing, which is essential in a market where sub-second response times can have a negative impact on usability.
Across the telecommunications industry, competition has intensified dramatically as more and more players enter the market and as regulators push prices down.
This trend reduces margins for operators and has also ended the era when telcos could rely on guaranteed, high-profit returns.
As a result, the industry has had to find creative ways to tap into new revenue streams.
At VAS-X, we have spent over two decades helping operators across Africa adapt and evolve in response to changes in the market.
For telcos looking to expand their offerings and become ‘techcos’, VAS-X can help to replace legacy systems that are stalling innovation and make it possible to launch and monetise a wide range of new digital services.
