Turning Challenges Into Opportunities - Part Two

Transformation

Crisis management requires well thought through transformation and a fundamental re-thinking on how operators, local governments and vendors work together. Turning the effects of the global financial crisis into a positive might seem farfetched however if businesses take the actions required fast with a very structured approach and not treating the current crisis as yet another firefighting project or business as usual, ending up with fixes normally just scratching the surface. Organizations and Governments must now use the current crisis as an ideal opportunity to drastically transform their way of doing business, enabling survival and ultimately be stronger for what happened.

Leadership teams traditional role is not conducive to meeting the current challenges, time is now up, the continued talk of transforming the way operators and vendors alike do business in Africa, is now simply is not enough, drastic actions for survival and continued positive progression is now required.

Business process outsourcing

The continued discussion on infrastructure sharing will certainly now be at the forefront of most discussions in the board room of operators and vendors, strategies for sharing among telecommunications and information and communication technology (ICT) providers are needed to offset an investment drought stemming from the deepening global financial crisis. Sharing strategies are increasingly necessary to ensure that operators can deploy their networks at low cost while guaranteeing that consumers have access to affordable services.

Now, more than ever, sharing strategies make sense as operators are forced to reduce the costs of network deployment as they compete for scarce investment funds. This is a forward-looking perspective in light of the current financial and economic uncertainty.

Such strategies include sharing civil engineering costs in deploying networks, promoting open access to network support infrastructure (poles, ducts, conduits), essential facilities (submarine cable landing stations and international gateways), and access to radio-frequency spectrum and end-user devices.

Other steps are: adopting rules to provide for infrastructure sharing, particularly "passive" sharing of towers, ducts, rights-of-way and other support facilities; overhauling and streamlining cross-agency processes to create a ‘one-stop shop' for various network-related activities , such as land management, site maintenance, pooling fuel delivery, environmental and safety permits; and adding innovative spectrum management mechanisms that promote increased sharing and efficient use of spectrum.

In developing countries sharing provides a significant opportunity to make the expansion of their networks more affordable to rural and under-served areas. Many developed countries are looking at sharing to reduce the cost of rolling out ultra high-speed broadband networks that reach customers' homes and apartment buildings. Penetration into rural areas certainly represents a great opportunity for operators; in 2006 the GSM Association issued a research study that estimated the potential annual revenues from the rural population of all developing countries at around US$ 95 billion by year 2012. A key critical success factor for success is to select a route to market that enables affordability, availability, acceptability and awareness. FutureAfrica promotes and supports a best practice distribution model known as RAI (Rural Acquisition Initiative); this model developed by Lars Stork and Global Praxis was granted the 2008 Global innovation award in emerging markets expansion innovation, bringing telecom services to the rural poor population.

Other opportunities for transforming the way of doing business relates to outsourcing or the move to vendor managed services in areas such as networks, call centers, supply chain, distribution, financial accounting and procurement, not to mention the opportunity to simplify in-country operations for African or regional shared competence and or service centers. These options need to be scrutinized and the business model re-evaluated accordingly.

Vendors such as Ericsson, Huawei, Nokia Siemens, ZTE, Motorola and others now need to work much closer with operators through back- and front end integration, the boundaries is changing, and each component in the value chain needs re-evaluation.

FutureAfrica's view is that in long term passive infrastructure becomes part of a completely different utility business, and not part of the telecoms industry at all. Rather than build duplicative competing access networks, capital has to be freed up to invest in network edge assets. Operators should aggressively pursue network sharing and outsourcing initiatives.

Future Africa provides business consulting services that include business modeling, organizational transformation, business process modeling, people development, individual coaching and mentoring.