But first they’ll need to navigate the nuances of local markets respectively, and optimise their processes.

According to Louis Avenant, Senior Project Manager at Itemate Solutions, the exponential growth in smart and connected devices make a strong case for greater investment in the nascent technology.

Airtel Introduces eSIM

“eSIMs eliminate the need for physical SIM cards, in their place providing a software-based solution that can be used in smart devices including smartphones, wearables, and Internet-of-Things (IoT) devices. eSIMs also provide additional convenience to travellers as they can easily switch between networks.”

The market for IoT devices hold particular promise to telcos as each device requires its own SIM. Analysts predict the number of global IoT devices will grow 16% this year to reach 16.7 billion endpoints, and nearly 30 billion endpoints by 2027.

The growth in IoT adoption comes amid rapid growth in the broader mobile industry, with analysts expecting one billion mobile subscriptions in sub-Saharan Africa by 2028.

However, reports show that the gradual adoption of eSIMs can be attributed to low product maturity and complex technical onboarding and registration environments.

eSIMs are typically loaded to devices using a QR code, and offer the ability to easily switch between mobile network operators along with greater safety from theft. Considering the substantial amount of plastic involved with traditional SIM cards, there is also a strong environmental case to be made for eSIMs.

Avenant says many of the issues with the rollout of eSIMs can be traced back to registration and sales processes, which place onerous requirements on telco operators and their customers.

“There is a case to be made for telco operators lobbying government to relax some of the systems around SIM registration to encourage adoption of eSIMs, which offer distinct advantages to consumers in terms of safety and convenience.”

The process of registering a SIM card – whether prepaid or subscription -based – differs between countries. In South Africa it’s easier to obtain customer data, making compliance to legislation such as RICA easier. In Cameroon, the government is still rolling out its new national identity card, leaving telcos to collect what KYC data they can.

“It is imperative that telco operators understand the nuances of each market as the operating environment can differ wildly between different countries,” says Avenant. “From the highly competitive Tanzanian market to the mature South African market, telco operators need close working knowledge of local consumer trends and operating challenges to truly break through to customers with new services.”

He adds that telco operators should leverage the technology and insight of local partners that can help them navigate key constraints to broader adoption of eSIMs among consumers.

“By integrating eSIM registration to the point-of-sale, telco operators can remove friction for customers and ease the process of selling, registering and loading eSIMs,” says Avenant. “Keeping systems optimised for the handling of eSIMs will also allow telco operators to maintain control over KYC and other processes, and ensure they are not left behind when competitors make headway in this space.”

Africa is home to a thriving telecoms industry typified by a small group of very large, dominant telcos – such as MTN and Safaricom – and a highly competitive group of emerging telcos.

These telcos play a vital role in the continent’s economic and social development, providing essential connectivity to hundreds of millions of people that lack access to fixed broadband and fibre connectivity.

The GSMA predicts that unique mobile subscriber numbers in sub-Saharan Africa will reach 613 million by 2025, generating $154-billion in economic value.

The more dominant telcos will continue to take advantage of this growth by leveraging technology to develop innovative new revenue streams and business models. From mobile money and fintech services to small business support, entertainment and mobility, African telcos are gearing up for a new phase of diversification and growth following an era marked by market consolidation.

The emerging telco opportunity

For emerging telcos, there is enormous opportunity in refining their service offering to more closely meet customer needs. Consider, for example, that smartphone adoption is not yet at the levels seen in more developed regions.

Data indicates that more than half of the 40 to 50 million mobile phones that are shipped to Africa each quarter are feature phones.

In the fourth quarter this amounted to 22.7 million feature phones, compared to only 17.6 million smartphones.

In many consumer markets, telco customers also prefer physical over digital services. For example, purchasing scratch cards in the physical form despite the convenience of digital airtime vouchers.

To reach the scale and capacity of their more dominant peers, savvy emerging telcos should leverage their relatively small size to rapidly innovate – intrinsically understanding and meeting their customer’s products and services’ needs.

However, emerging telcos typically face a number of key challenges hampering their growth and undermining the customer experience they deliver. Based on our work with telcos across the continent over the past 15 years, these are four common growth challenges for emerging African telcos:

Challenge #1 – Inventory Management

The nature of telcos’ business models means that physical goods – mobile phones, accessories, and airtime scratch cards – often have to be moved around. If any of the goods become lost along the way, the telco suffers a direct monetary loss.

Critically, this type of stock loss can also affect the customer experience. If a box of scratch cards are lost before they could be activated, a customer may inadvertently purchase a scratch card that doesn’t work. And when they contact a service centre for support, the telco has to choose between disappointing the customer or taking a revenue hit by providing the airtime at a loss.

Implementing serialised product identifiers, with a track and trace solution, provides telcos with full visibility over the movement of goods, and ensures accountability in the event of any stock loss. This saves money and protects the customer from inadvertently purchasing illegitimate goods.

Challenge #2 – Point-of-Sale

For many emerging telcos, in-store payments are still fairly basic, providing little traceability, customer insights or stock tracking. This can hamper their ability to handle customer requests or deliver a positive customer experience.

The adoption of telco-specific point-of-sale technology can make it easier for emerging telcos to cater to customer needs. Itemate’s point-of-sale solutions are tailored to telcos, providing a one-stop shop for customer requests, KYC and payments while enabling full audit traceability, reports and insights. This gives telcos full control over their business.

Challenge #3 – SIM Recycling

Mobile number recycling – or SIM recycling – remains a major challenge for telcos, with even larger telcos recently making news headlines for indiscriminately reusing customer numbers the telcos thought were inactive.

SIM recycling happens when a telco detects a specific mobile number is dormant, and reuse that number for new subscribers. However, the nature of mobile connectivity in Africa is that customers often have multiple SIMs they use for different purposes, like phone calls and mobile money transfers for example. When a telco then recycles that number, the customer suffers not only inconvenience, but sometimes monetary losses as a number linked to their mobile money store of value is recycled.

However, with the right technology in the background, telcos can keep a more accurate record of which numbers are dormant and which ones can be recycled. This prevents customer dissatisfaction while ensuring the telco can utilise numbers optimally.

Challenge #4 – Dealer Management

A strong dealer network is essential to the growth and success of any telco. But a lack of technology can mean some telcos are left blind to the needs and activities of their dealers, which can undermine their growth.

Having the correct technology in place can give telcos visibility over key processes, customer needs and dealer activities that can inform business decisions.

By leveraging technology, telcos can drive improvements in the customer experience while ensuring they keep pace with the demands of the market, contributing to their longer-term growth and success.

Technology presents exciting opportunities for African telcos to scale into new capabilities, deliver superior customer experiences, drive greater revenue and grow their market share.

As mobile adoption grows and the mobile connectivity plays an increasingly important role in the African economy, telcos that can leverage technology to the greatest effect stand to benefit most.

[Featured Image Credit]