Africa Beckons

Although the reseller channel and SI scene is still under-developed in the sub-Saharan Africa region, the market is seeing a lot of pro-activity.

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Africa Beckons
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By  Piers Ford Published  December 27, 2013

Although the reseller channel and SI scene is still under-developed in the sub-Saharan Africa region, the market is seeing a lot of pro-activity. Channel partners on the continent need to adapt to the new reality, up their performance and customer service, and bring in a more varied product portfolio.

Despite huge local discrepancies in the maturity and reliability of the communications infrastructure, the IT market is booming across sub-Saharan Africa.

Earlier this year, an Internet Society study carried out by market watcher Analysys Mason recognised the significant strides forward that have been made in investment in telecoms networks throughout this vast and complex region. However, much of this spending and development has focused on international connectivity and terrestrial fibre networks between countries.

The report suggested that in some areas, progress has yet to be reflected in lower prices or increased quality of service for Internet users, and that Internet access is often hindered by constraints on terrestrial connectivity between submarine cables, Internet exchange points, last-mile access infrastructure and ISPs in many countries.

The study looked to governments to remove regulatory roadblocks and promote Internet-specific investments. Despite this proviso, evolution has been rapid and some players even consider a relative lack of regulation to have been a blessing because it has allowed innovative projects and services to get off the ground without interference.

Certainly, if the retail telecoms sector in sub-Saharan Africa is anything to go by, the appetite for technology and access to Internet services is huge. Analysys Mason forecasts 6.4% revenue growth between 2012 and 2018 – that’s faster than any other region in the world – by which time the market will be worth $59bn, or 4% of global retail telecoms revenue. But it also said operators in the region must concentrate on developing new digital revenue streams to supplement core services.

If that happens – and the signs are more than positive – it adds up to a very healthy and exciting landscape for the channel, despite the many challenges of developing a sustainable business in such a complicated landscape.

“The sub-Saharan African IT landscape is vast and varied, ranging from the mature and developed South African market to the very small markets such as Burundi, and everything in between,” said Jagat Shah, chairman and CEO of Mitsumi Distribution.

“Having said that, the key economies in the region are Kenya, Uganda, Tanzania and Ethiopia in the East, and Nigeria and Ghana in the West.  These, among others, are showing remarkable growth – not just in the sheer number of units sold but in solutions and skills around them. At Mitsumi we are seeing this transformation with our own eyes as demands for our key solutions continue to rise.”

Shah said examples such as Kenya’s one-laptop-per-child initiative and the Safaricom triple-play services deal in the same country represent the type of local developments that are sowing the seeds for a buoyant IT market from the ground up.

However, as Anand Choudha, managing director at Spectrami pointed out, there are more than 50 countries in the continent, and they make up a diverse mix of oil-producing nations, middle and low income economies and some very fragile infrastructures, such as Liberia, Comoros and Guinea.

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