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Behind the rise of innovation accelerators in Africa

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While businesses in Sub-Saharan Africa have steadily been adopting 3rd platform technologies, many are adopting disruptive technologies that enable them to enhance the way they engage with customers, writes MERVIN MIEMOUKANDA, at IDC.

While businesses in Sub-Saharan Africa have steadily been adopting 3rd Platform technologies such as cloud, mobility, big data analytics and social business, there has now been a shift in focus towards the uptake of innovation accelerators. These innovation accelerators are disruptive technologies that enable companies to enhance the way they engage with customers and deliver services and experience, as they move to transform their business operations.

At IDC, we define the core innovation accelerators as the Internet of Things (IoT), cognitive systems, 3D printing, robotics, next-generation security and augmented or virtual reality. The adoption of these solutions varies significantly across the region, but already South Africa, Kenya and Nigeria are emerging as early adopters. Discussions with CIOs in the region show that market awareness is increasing, which has translated into a wide range of exploratory activities to evaluate their viability. 

Interest in innovation accelerators is growing

Public sector entities in the region have been leveraging ICT to address service delivery challenges. The Presidential Digital Transformation of Government programme in Kenya, for example, has prioritised the launch of a national digital registry, a citizen service portal and a government shared services up, with the objective to expand eGovernment services to half the Kenyan population in 2017. These efforts are resulting in government investment in 3rd Platform and advanced IoT technologies.

Smart cities are also a potential driver for adoption. Many governments in the region have undertaken highly ambitious smart city projects, such as Konza Technology City in Kenya and several smart city projects in South Africa. Innovation Accelerators figure prominently in such projects, particularly IoT technologies, with some municipalities already using IoT to improve traffic flow, reduce accidents and crime, and thus helping to boost tourism and better market their cities as smart choices for foreign investment.

In the private sector, businesses looking to transform their operations, improve customer experience and devise new business models are deploying innovation accelerators to achieve that. Already technologies such as IoT, wearables and drones are being adopted across different verticals. One example is the short-term insurance industry where insurers reward customers with lower premiums if they allow them to track their driving behaviour through telematics.

What is holding wide-spread adoption back?

High connectivity costs, coupled with low-quality telecom networks and limited network coverage continues to prohibit the widespread adoption of IoT in some Sub-Saharan African countries. Ineffective data protection regulations are also a major challenge in certain countries in the region and security remains a concern, particularly where innovation accelerators that share content and data across multiple platforms are concerned.

The high cost of hardware is another limiting factor, as the slowdown of many economies in the region has resulted in organisations reprioritising their IT spend and only making minimal investments in IT infrastructure. Other major hindrances include a lack of regulations or stringent laws, especially regarding drones, limited awareness, unreliable power supply and data privacy regulations.

Where to from here?

IDC believes there is a need to educate both customers and partners about innovation accelerators as many people in the region are still trying to understand the concepts behind them, particularly when it comes to cognitive systems and virtual reality. Vendors must also invest in application development skills and in skills development programmes for partners that will market innovation accelerators.

With the cost of augmented reality and robotics so high, vendors will need to showcase the total cost of ownership and return on investment of these technologies. Furthermore, they need to lobby governments to create regulations that support the uptake of innovation accelerators.

Finally, in terms of next-generation security, partnership and ecosystems will be key to providing a compelling value proposition and customer security teams must be confident that they can guarantee acceptable levels of risk to business operations when deploying disruptive technologies.

* Mervin Miemoukanda, Senior Research Analyst: Software and Market Intelligence in Africa at International Data Corporation

Africa News

Africa phones go flat

Africa’s mobile phone market declined 2.1% quarter on quarter in Q3 2018 according to the latest figures from IDC.

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The global technology research and consulting firm newly released Quarterly Mobile Phone Tracker shows overall shipments for the quarter totalled 52.6 million units, with feature phone shipments falling 2.7% QoQ and smartphone shipments declining 1.3% over the same period.

Transsion brands (Tecno, Infinix, and Itel) led the feature phone space in Q3 2018, with a combined unit share of 58.2%. Nokia was next in line with 11.7% share. Transsion, Samsung, and Huawei dominated the smartphone space with respective unit shares of 34.9%, 21.7%, and 10.2%. However, in value terms, Samsung led the smartphone market with 37.2% share, followed by Transsion (21.0%) and Huawei (13.0%).

There were differing fortunes in the region’s three major markets, with Nigeria suffering a heavy 11.6% QoQ decline in mobile phone shipments, while South Africa and Kenya saw respective QoQ growth of 8.5% and 7.9% in Q3 2018.

“The decline in Nigeria stemmed from a slowdown in government spending, ongoing warfare in the country’s northern states, and market uncertainty in the lead up to elections,” says George Mbuthia, a research analyst at IDC. “In South Africa, the market’s growth was spurred by the penetration of low-end devices from brands such as Mobicel, Mint, and Nokia, while the launch of entry-level smartphones helped drive growth in Kenya despite increases in taxes and fuel prices placing a significant burden on disposable income in the country.”

While feature phones remain steadfastly popular across Africa, particularly in more rural areas, consumers are increasingly being attracted by smartphone offerings from Chinese brands such as Xiaomi, Oppo, and Huawei, which are actively targeting feature-oriented customers at more economical price points.

“There is a new wave of Chinese brands aggressively pursuing growth opportunities in the region, while the more-established Huawei is also accelerating its marketing efforts and expanding its distribution budget,” says Ramazan Yavuz, a research manager at IDC. “These brands have quickly progressed along the learning curve and evolved their offerings to perfectly reflect the realities of the region by addressing the diverse pricing and feature needs of the consumer base.”

Looking ahead, IDC expects Africa’s overall mobile phone market to reach 58 million units in Q4 2018, spurred by the festive season and online consumer events such as Black Friday. The introduction of more affordable smartphones in the African market will help drive progress in this space over the coming quarters, while the share of feature phones will decline steadily as the transition to smartphones gathers momentum.

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Africa News

Mobile money to cross borders

Orange and MTN launch pan-African mobile money interoperability to scale up mobile financial services across Africa.

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Two of Africa’s largest mobile operators and mobile money providers, Orange Group and MTN Group, today announced a joint venture, Mowali (mobile wallet interoperability), to enable interoperable payments across the continent. Mowali makes it possible to send money between mobile money accounts issued by any mobile money provider, in real time and at low cost.

Mowali will immediately benefit from the reach of MTN Mobile Money and Orange Money, bringing together over 100 million mobile money accounts and mobile money operations in 22 of sub-Saharan Africa’s 46 markets. Mowali is ready to enable interoperability between digital financial service providers beyond MTN and Orange operations and markets, to support the existing 338 million mobile money accounts in Africa.

Mowali is a digital payment infrastructure that connects financial service providers and customers in one inclusive network. It functions as an industry utility, open to any mobile money provider in Africa, including banks, money transfer operators and other financial service providers.

The objective of Mowali is to increase the usage of mobile money by consumers and merchants.  Mowali enables money to circulate freely between mobile money accounts from any operators in all countries.  From the customer’s point of view, this means “I can pay or receive money anywhere from my mobile account regardless of my operator”. The system will unlock further innovation in the digital financial space within the continent. 

For Stéphane Richard, Chairman & CEO of Orange, “by providing full interoperability between platforms, Mowali will provide an important step forward that will allow mobile money to become a universal means of payment in Africa. Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa, particularly for more isolated communities. This solution embodies Orange’s ambition to be a leading player in the digital transformation of the continent. By joining forces with another of Africa’s market leaders, MTN, we aim to accelerate the pace of this transformation in a way that will change the lives of our customers by providing them with simpler, safer and more advantageous services. “

“One of MTN’s goals is to accelerate the penetration of mobile financial services in Africa, Mowali is one such vehicle that will help us achieve that objective. Furthermore, co-operation and partnerships that help us accelerate the pace of development and overcome some of the scale, scope and complexity of challenges that society faces are key. This partnership with Orange is therefore an important step in helping us play a meaningful role in supporting the United Nations’ Sustainable Development Goals related to eliminating extreme poverty and enhancing socio-economic development in the markets we operate in and beyond. Thus giving our customers access to a bright, digital future.” said Rob Shuter, Group President and CEO of MTN.

The GSMA supports the Mowali initiative as interoperability at this scale is a key accelerator for both financial inclusion and Mobile Money usability across Africa.  “Today, there are over 690 million mobile money accounts around the world. Mobile money services have become an essential, life-changing tool across Africa, providing access to safe and secure financial services but also to energy, health, education and employment opportunities. The creation of Mowali will help to further transform mobile financial services throughout the African region. It demonstrates the mobile industry’s continued leadership and commitment to driving financial inclusion and economic empowerment through industry collaboration. The GSMA is proud to support its development,” said Mats Granryd, Director General, GSMA.

“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome, in support of financial inclusion. With Mowali, Orange and MTN deliver a solution that will enable them, and other companies, to scale digital financial services across Africa, faster, to everyone—including the poor,” said Kosta Peric, deputy director of Financial Services for the Poor, at the Bill & Melinda Gates Foundation “This is a signal that a new wave of innovation, which can help alleviate poverty and drive economic opportunity, is coming. We’re pleased to see an implementation of Mojaloop—an open source payment platform available to operators across the sector—help achieve that.”

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