Four Growth Challenges for Emerging African Telcos: Expert Insights

Itemate Solutions
Robert van Breukelen, COO at Itemate Solutions

DODOMA, TANZANIA: The African telecoms industry is thriving, with dominant telcos such as MTN and Safaricom leading the way. However, emerging telcos face unique challenges that can hamper their growth and undermine customer experience. In this expert analysis, Robert van Breukelen, COO at Itemate Solutions, highlights four common growth challenges and offers insights on how emerging telcos can leverage technology to overcome them.

According to van Breukelen, emerging telcos have enormous opportunities to refine their service offerings and meet customer needs. However, they face challenges such as inventory management, point-of-sale limitations, SIM recycling, and dealer management. These challenges can lead to stock loss, poor customer experience, and missed growth opportunities.

To overcome these challenges, van Breukelen recommends leveraging technology such as serialized product identifiers, telco-specific point-of-sale solutions, accurate record-keeping for dormant numbers, and dealer management tools. By doing so, emerging telcos can improve customer experience, drive revenue growth, and compete with dominant telcos.

As the African telecoms industry continues to grow, emerging telcos must overcome these challenges to succeed. By leveraging technology and focusing on customer needs, they can carve out a niche in this competitive market and contribute to the continent’s economic and social development.

Challenge #1 – Inventory Management

The nature of telcos’ business models means that physical goods – mobile phones, accessories, and airtime scratch cards – often have to be moved around. If any of the goods become lost along the way, the telco suffers a direct monetary loss.

Critically, this type of stock loss can also affect the customer experience. If a box of scratch cards is lost before they can be activated, a customer may inadvertently purchase a scratch card that doesn’t work. When they contact a service center for support, the telco has to choose between disappointing the customer or taking a revenue hit by providing the airtime at a loss.

Implementing serialized product identifiers, with a track-and-trace solution, provides telcos with full visibility over the movement of goods, and ensures accountability in the event of any stock loss. This saves money and protects the customer from inadvertently purchasing illegitimate goods.

Challenge #2 – Point-of-Sale

For many emerging telcos, in-store payments are still fairly basic, providing little traceability, customer insights or stock tracking. This can hamper their ability to handle customer requests or deliver a positive customer experience.

The adoption of telco-specific point-of-sale technology can make it easier for emerging telcos to cater to customer needs. Itemate’s point-of-sale solutions are tailored to telcos, providing a one-stop shop for customer requests, KYC, and payments while enabling full audit traceability, reports, and insights. This gives telcos full control over their business.

Challenge #3 – SIM Recycling

Mobile number recycling – or SIM recycling – remains a major challenge for telcos, with even larger telcos recently making news headlines for indiscriminately reusing customer numbers the telcos thought were inactive.

SIM recycling happens when a telco detects a specific mobile number is dormant, and reuses that number for new subscribers. However, the nature of mobile connectivity in Africa is that customers often have multiple SIMs they use for different purposes, like phone calls and mobile money transfers for example. When a telco then recycles that number, the customer suffers not only inconvenience but sometimes monetary losses as a number linked to their mobile money store of value is recycled.

However, with the right technology in the background, telcos can keep a more accurate record of which numbers are dormant and which ones can be recycled. This prevents customer dissatisfaction while ensuring the telco can utilize numbers optimally.

Challenge #4 – Dealer Management

A strong dealer network is essential to the growth and success of any telco. However, a lack of technology can mean some telcos are left blind to the needs and activities of their dealers, which can undermine their growth.

Having the correct technology in place can give telcos visibility over key processes, customer needs, and dealer activities that can inform business decisions. By leveraging technology, telcos can drive improvements in the customer experience while ensuring they keep pace with the demands of the market, contributing to their longer-term growth and success.

Technology presents exciting opportunities for African telcos to scale into new capabilities, deliver superior customer experiences, drive greater revenue, and grow their market share. As mobile adoption grows and mobile connectivity plays an increasingly important role in the African economy, telcos that can leverage technology to the greatest effect stand to benefit most.


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