Emerging markets: a business opportunity but a communications challenge
Written by: Written by Deon Liebenberg, Executive Vice President: Africa, Vodafone Global Enterprise
The combination of rapid development in emerging economies and sluggish growth in the West is leading many multinationals to focus on establishing operations in new markets.
But quickly setting up the vital requisite communications infrastructure in these new areas is often no simple feat.
More than 70 per cent of global economic growth over the next few years is expected to come from emerging markets. Economic growth in Sub-Saharan Africa alone is expected to outpace the global average by 2015.
This sustained economic development combined with a growing middle class means multi-national corporations are looking at these markets as a major revenue making opportunity – not merely as somewhere to outsource staff to lower costs.
However, the reality is that in developing markets such as Africa, new operations being set up by global enterprises need vital communications capabilities and structures in place before they can realise any of this potential.
Limited, and expensive, fixed infrastructure means setting up basic broadband connectivity can prove challenging.
More advanced features such as unified communications, secure mobile device management and reliable access to cloud-based services can be especially difficult.
Multi-national organisations need to consider these communications issues when entering the African business market and plan an effective strategy to overcome them.
From national banks in Africa, to digital start-ups in London’s Tech City, all businesses need reliable communications they can maintain cost visibility and control over.
Only once this is established can a business take a more strategic view of the transformational and competitive advantages enterprise mobility can bring.
Set against the backdrop of Africa’s vast size and complexity, this isn’t easy. The continent is made up of more than 50 countries, each with its own regulatory environments, historical backgrounds and legacy languages, not to mention unique political and cultural differences.
The technological infrastructure is equally diverse. Many African markets do not have traditional terrestrial communications, with governments bypassing fixed-line infrastructures in favour of mobile and fibre-optic broadband.
East Africa, for instance, one of the least connected places in the world just a few short years ago, now has three sub-sea fibre optic cables supplying super-fast broadband to regions such as Kenya and this is fuelling the rise of the region’s mobile middle class. The East African mobile market is now the fastest growing of anywhere in the world..
In Sub-Saharan Africa mobile is the main means of Internet access and half of the region’s mobile connections are expected to run on mobile broadband networks by 2020.
That said, African smartphone penetration as a whole still stands at just 12 per cent and some of the less technologically developed African markets still present the risk of unstable power supplies and limited radio coverage.
But businesses need consistency not complexity. And for African expansion to become a business success, multinational organisations need reliable fixed, mobile and mobility capabilities to connect workforces, improve operations and deliver the best possible customer experience.
Entering new markets can easily lead to a complicated web of suppliers, contracts, billing and support, as fixed line, fixed data mobile voice, mobile data and broadband connectivity are established.
This is even harder to manage on a continent where regulations, languages and cultures are so diverse.
Consolidating communications into one supplier under one contract and with one master service agreement can help to alleviate the pain of country-by-country negotiation. This provides businesses with a consistent experience and better control of communications costs and security.
In remote locations, where infrastructure is lacking, satellite can be used as a back-up, temporary fix, or even as the principal communications technology to support critical infrastructure and services.
In technologically advanced regions where broadband connectivity is more widely available, fixed-mobile convergence (FMC) is gaining traction.
Convergence technology provides businesses with an opportunity to simplify communications by connecting fixed and wireless networks with a single number and voicemail and simple transfers between desk, fixed or mobile devices.
This removes the physical constraints of a landline and means savings, convenience and mobility, not to mention improved productivity for the business.
Any multinational business expanding into Africa needs to feel confident it can establish reliable communications.
The simplest way to achieve this is to identify a total communications service provider that can negotiate and navigate the regulatory and technological complexities for them.
This empowers the business to focus on core competencies, explore revenue opportunities and achieve its ambitions.