Creating Successful Business Models:
Changing Investment Climate Brings Opportunities and Challenges

Key Forum session at ITU TELECOM AFRICA 2004 to examine the "dos" and "don'ts" of doing business in Africa

Cairo, 4 May 2004 — Africa’s business and operating climate has undergone a dramatic shift in recent years. Numerous markets have liberalized, creating a wealth of new competitive opportunities. Regulatory bodies have been formed to help support market competition.

Successful approaches, such as cyber cafes, community telephone kiosks and the reselling of mobile services by street vendors, have been harnessed, and these initiatives have helped to boost the uptake of Information and Communications Technologies (ICTs) in Africa in recent years.

To establish a successful business model, however, numerous factors must be taken into consideration. Doing business in the African region offers many opportunities, but also poses challenges for players in the ICT sector.

These range from linguistic challenges — the fact that the English language predominates as the language of the Internet despite the fact that the majority of Internet users are non English-speakers — to operational ones, such as overcoming outdated or inefficient business practices or finding and recruiting experienced managerial staff locally, and holding on to them, once trained.

Meanwhile, in technology terms, with wireless technologies likely to be those that shape Africa’s ICT future, any new business model must make sure it can be adapted to what has become the region’s technology of choice. Network capacity is also a key challenge. As subscribers increase so, too does the demand for network capacity. With so much of the region "unbanked" and the use of credit cards limited, mobile devices for goods and services is another critical area to be addressed.

These are just some of the areas that need to be considered in creating a business model to succeed in the African region, and which will be explored in this Forum session.

This Forum session will explore the experiences of firms successfully doing business in Africa. With keynote speakers, including Mr Marc Mesle of Africa Orange and Mr Gordon Graylish of Intel, and a lineup of distinguished panelists who span a range of business areas, the session will look at challenges and the solutions for building business.

This includes issues such as targeting services to a broader market. Targeting the mass market as opposed to just premium customers will ensure that subscriber numbers are boosted rapidly. However solutions will then be needed to ensure that services fit the needs of a much broader range of consumers. And if the majority of customers are not high ARPU (Average Revenue per user) generating customers, then solutions may have to be found to compensate for lower levels of ARPU. Fortunately, Africa is one of the few regions of the world where mobile ARPU is increasing.

More subscribers will heighten the need for greater network capacity. Already overstretched, a lack of network capacity could curtail future growth prospects, and so new infrastructure solutions need to be examined in order to ensure that demand can be met.

The demand for services is clearly there, and to tap into it requires the creation of business models that fit the needs of the market in terms of services, cost, technology, infrastructure and marketing.

This session will examine how to create these, as well as examining the roles that each of the different stakeholders in the ICT industry can play in helping business to work. The session aims to promote an understanding of what works and what does not when doing business in this region.

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