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Top five things to consider when launching a telecoms business in Africa

Entrepreneur and multi-millionaire, Peter Gbedemah discusses the top five things to consider when launching a telecoms business in Africa.

Africa is one of the most attractive places in the world to do business. Sub Saharan Africa, in particular, is fast becoming a start-up hot-spot: the region’s big players – South Africa, Kenya, and Nigeria – are among the fastest-growing economies in the world.  This growth represents a unique opportunity for telecoms providers looking for markets where there is an increasing appetite for affordable connectivity and over-the-top services. These include the likes of WhatsApp and Netflix, where content is streamed directly through the Internet, bypassing traditional distributors like cable, broadcast and satellite TV. With 456 million users of mobile services by the end of 2018, burgeoning telecoms start-ups should strongly consider Africa.

However, in a continent where the existing digital divide is so vast, several key factors must be taken into consideration before launching a telecoms business.

 

Be thorough and innovative when seeking investment

Securing venture capital funding for an African enterprise can be difficult. Encouraging investors to take the plunge into an emerging market, rather than sticking to the likes of Western Europe and the United States, requires a robust business plan that’s extremely well thought-through.

A clear company mission, the well-researched potential for demand, a thorough supply-chain framework and a risk audit covering political, economic and environmental factors will be key in wooing wary investors.

It seems many budding entrepreneurs have taken this advice on board, given a four-fold increase in total funding received for African start-ups in 2018. As the continent’s main players, Nigeria, South Africa, and Kenya’s sophisticated tech ecosystems are a natural draw for any new business. However, other African destinations, such as Accra in Ghana, are emerging as viable destinations for funding. These may have lower overheads and so the amount of funding needed from an angel investor will be lower; alternatively, there may be less competition for investment, making the pitch easier.

 

Embrace technological change

Africa’s number of smartphone connections is forecast to double from 315 million in 2015 to 636 million in 2022. Taking advantage of the continent’s rapid digital transformation has never been more important for the next generation of entrepreneurs.

Technology is driving change in Africa and the telecom sector is predicted to thrive. More than half a billion people across the continent are now subscribed to a mobile network. This means communities are connected to one another, as well as having access to a range of services – from wider healthcare and financial services for big corporations to micro-insurance where rural farmers are able to protect their crops against poor weather conditions.

Harnessing innovative uses of technology is imperative in order to stay ahead of competitors and provide customers with the most efficient service possible.

When Gateway Communications was first launched in Africa, nobody had deployed voice-over IP as a means of communications delivery. It was seen as untested and unreliable, but embracing this technological evolution allowed us to roll out services which had a tremendous impact on the lives of people living on the continent and allowed them to communicate remotely for the first time.

 

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