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Winning the Data War: The Strange Marriage between the Business Solutions and

the Network team

In Africa, the biggest ISPs are the mobile Network operators, their entrance into the
ISP space was unexpected but inevitable as traditional means of revenue generation
for the MNOs began to dry up after about a decade into the new millennium,
Average revenue per user (ARPU), which is indicative of the amount spent by the
average subscriber has either stagnated or declined, this is against the back drop of
an increasing growth of subscriber number on the continent, mobile short
messaging service (SMS) could not hold its strength against newer messaging
solutions like WhatsApp. Even the data big bang could not mitigate the decline as
there was a gradual decline in revenue generated per megabyte of data used by the
mobile subscriber.
The amount of capital investment needed in supporting the network infrastructure
of todays data hungry society has however not quietened, and as if to make a bad
case worse, the political class in most African countries have targeted this MNOs for
high taxation by introducing new taxes solely targeted at the MNO community.
In an effort to reverse this upsetting trend, most telcos have resorted to
infrastructure sharing and managed service agreements in a desperate attempt to
survive and retain shareholder interest in the mobile network market. These
attempts did make some impacts in stabilizing the market but was not enough to
reverse the trend. Venturing into the ISP space did put some smiles back onto the
face of their investors. With nationwide network infrastructure at their behest, A
new competitive turf was created among the MNOs albeit to the decline of the small
traditional ISP who do not have the advantage of such massive infrastructure at the
The major telcos on the continent; MTN, Vodafone and Airtel set the pace. Airtel
came with Airtel Business Solutions, MTN had its MTN Business Solutions whilst
Vodafone christened their enterprise unit Vodafone Business solutions. These
enterprise business unit were created with the sole objective of selling Internet and
WAN solutions, and to some degree over cloud services to organizations, both big
and small.
Having being a player in this industry from the very beginning, It is obvious what a
major intervention these units have become in generating the needed revenue for
these MNOs. But even as I admit to their profitability, I dare conclude that their
impact could have been bigger but for some ubiquitous constraints that have
plagued the industry. I will like to bring these contraints that have been a little damp
on the success story of the Enterprise dealings of these MNOs.
1. Most MNOs saw the Enterprise business units more as a sales unit and little
Becoming an ISP or lease line provider seems like the master stroke to arrest the
decline in revenue generation for these MNOs.
They had one advantage over the traditional ISPs; Network Infrastructure.

It was a case of supply meeting demand, the network age was just dawning in subSaharan Africa, with banks and other big organizations interconnecting their many
offices and branches to their head offices. There was little time to properly audit
and put in the necessary structures for the new department, potential customers
must not be lost to other competitors by following bureaucratic strategies in
building a new department, and so Business solutions offices were launched and
opened to business.
Having been involved from the very beginning, the alignment between the BS office
and the Network team missed some steps from the beginning, this resulted in

Enterprise business architecture not properly defined

Enterprise unit and Network team not properly aligned
Legacy network not supportive of certain customer demands
Enterprise unit purely a sales and marketing department
Signing of overly tight SLAs.

The perfect storm which faces mobile operators round the world is well documented. Its elements can be
summarised as:

exploding data and signalling volumes overloading networks

declining revenue from traditional sources, notably voice and messaging, because of changing
consumer behaviour and competition from over-the-top providers like WhatsApp/Facebook

stagnant or declining ARPU (average revenue per user) for all consumer services, and

declining revenue per megabyte of data.

Just to stand still, operators need to invest in networks which can support the data volumes and user
experience demanded by users, including new voice and messaging technologies to try to keep some of
that business alive (for instance, Voice over LTE or HD Voice).
They face significant capex investments to support the new data volumes and applications, but cannot be
certain these will guarantee higher ARPUs and profits, when much of the usage is over-the-top
The clear conclusion is that a business case which rests entirely on mobile consumers will fail, perhaps
quickly, perhaps after a decade of painful decline. The only way to be profitable when focused on
consumer services alone will be to operate over-the-top or as an MVNO (a mobile virtual network
operator, which rides on a third party network and so does not incur the costs of building and maintaining
its own infrastructure).
For the companies which still own their own mobile networks, the priorities will be to slash the cost of
expanding capacity (with new, more efficient technologies and with options like network sharing), and to
generate additional revenue streams from the same capacity.
In a survey conducted by Rethink Technology Research in late 2013, 65 mobile operators were asked
what percentage of new revenues, driven by their upgrade to LTE or fourth generation technology, would
fall into various categories.

Between 2014 and 2018, it was clear that their plans and expectations were shifting away from consumer
services and towards two new areas of growth charging the content or application provider, rather than
the consumer, for popular services (for instance, revenue sharing); and focusing on enterprise services.
In the second group, the most important areas of new revenue are the internet of things (IoT), in which
all kinds of everyday devices are connected to the internet, often wirelessly, and cloud-based services for
enterprises. By 2018, these are expected to be the biggest generators of new revenues for LTE networks,
with the IoT contributing about one-fifth.