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Tech disruptions’ll continue to frustrate mobile revenue growth for long—GSMA

…Only smart thinking operators can survive

Latest research report of the Global System for Mobile Communication Association (GSMA) has disclosed that technology disruptions in the mobile telecoms services are beginning to take tolls on the earnings of telecoms groups in developing economies especially in Africa.

The report predicted that mobile network operators will continue to experience weak revenue growth in the next seven years as subscribers continue their massive migration to using data instead of loaded credit to make calls and other forms of digital communications.

However, the report was quick to encourage mobile operators to explore new services that could generate more revenue such as the enterprise sector, saying “One area of potential growth is the enterprise sector. MTN and Orange have launched a wide range of connectivity, payments and cloud storage solutions for business customers in key markets, including Côte d’Ivoire, Ghana and Nigeria.

“Sluggish revenue growth is having an impact on mobile operators’ cash flow and margins. Operators have taken steps to ease this pressure through cost reduction measures such as network sharing and the sale of tower assets.

Already, MTN Nigeria in 2015 secured Pay TV licence within the same period it acquired the 700Mhz broadcast frequency from the National Broadcasting Commission (NBC).

GSMA averred that in West African, mobile network operators would record less than two per cent revenue growth regardless of the improved macroeconomic conditions and subscribers’ growth.

The report backed up the revelation with facts which showed that declining voice and messaging revenues coupled with a strong preference for IP-based services by subscribers on smartphone and allied devices now communicate more on data  than voice and messaging.

The new report tagged Mobile Economy West Africa 2018 said “Revenue growth will remain positive, but weak at less than two per cent annually over the period to 2025 as the effects of an improved macroeconomic outlook and continued subscriber growth are counterbalanced by mounting pressure on voice and messaging revenues.

“The sub-region is seeing a growing shift to IP-based services, especially among younger consumers, as smartphone adoption rises.

“Furthermore, the majority of new subscribers will come from lower income groups who will likely spend less on mobile services than wealthier early adopters.”

The GSMA Intelligence noted that even though total mobile revenues in West Africa reached $15.6bn in 2017, an increase of 16.4 per cent on the previous year, it estimated a growth of 4.5 per cent in 2018 and 2.5 per cent in 2019.