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Digital transformation and disruption

Network evolution is something clearly of prime concern to operators and the telecoms industry in Africa, as it is across the rest of the world. But because of the key role 4G and then 5G will play in enabling digital transformation and the leg-ups to economic growth that promises, it is also a topic of significant interest across the breadth of business and industry.


What sectors will benefit most from next-generation networks?

We asked participants at AfricaTech which sectors of the economy they expected to benefit most from the development of next-generation networks across Africa. Almost a quarter (23%) picked out finance, followed by media and entertainment (16%), manufacturing (11%), education and agriculture (both 9%).

Opening up the discussion a little further, we also asked industry insiders which sectors they thought would undergo the most disruption from digital technology over the next two to three years, partly driven and enabled by network evolution. Again, finance was singled out as the clear favourite with 24% of the vote, followed by manufacturing (13%) and agriculture (10%).

The mobile and finance industries enjoy a special relationship in Africa and, given the size of the mobile money market on the continent, it stands to reason that financial services should be expected to gain most from network evolution.


Switching to data and app-based platforms

Short term, the switch to data and app-based platforms will allow providers to offer a wider range of services with more convenient and efficient customer experiences. Long term, the increased capacity and speed of 4G and 5G networks will also lay the foundations for the mobile finance industry to adopt disruptive technologies like Blockchain and AI, delivering the benefits of highly secure peer-to-peer transaction services and sophisticated automation and data analytics.

The expectation is that media and entertainment industries will benefit from increased 4G / LTE penetration in the same way they have done in regions such as Asia, Europe and North America, with digital content becoming widely available via mobile devices.

With the increased speed and capacity of 5G, coupled with ultra low latency, it is expected that markets for HD video streaming via mobile will also boom, followed by emerging areas like VR and AR-powered gaming. The elephant in the room for African economies is that smartphone ownership is considerably lower than in other parts of the world, currently standing at 39% penetration. Media industries will need this to rise to the anticipated 66% by 2015 to enjoy significant benefits from next-gen networks.


Applications for next-gen networks and disruptive technologies

A report into the progress of digitalisation in Africa’s agricultural sector found that there were already more than 400active ‘D4Ag’ - digital for agriculture - solutions in use across the continent. However, it argued that this was just the tip of the iceberg, with a total addressable market of $2.6bn and the potential for it to grow at a CAGR of 40%. Applications for next-gen networks and disruptive technologies include things like smart drones for surveying land and monitoring livestock herds, IoT-based in-field sensor systems to support crop and environmental management, and AI-powered robotics systems for improving the efficiency of activities like spraying and weeding.

After identifying the sectors of the economy most likely to benefit from network evolution and digital disruption, we also asked our survey participants to name the technologies they believed enterprises should be focusing their investment strategies on for biggest impact. There was a strong consensus around the impact AI could have in the coming years - it was picked out as the most important investment opportunity by more than a third of our respondents (35%). This was followed by cybersecurity with 26%. We will take a closer look at the AI opportunity in Africa in its own section of this report, and discuss cybersecurity in the context of some of the challenges facing tech and telecoms across the continent.


Where will African enterprises focus investment strategies for impact?

After identifying the sectors of the economy most likely to benefit from network evolution and digital disruption, we also asked our survey participants to name the technologies they believed enterprises should be focusing their investment strategies on for biggest impact. There was a strong consensus around the impact AI could have in the coming years - it was picked out as the most important investment opportunity by more than a third of our respondents (35%). This was followed by cybersecurity with 26%. We will take a closer look at the AI opportunity in Africa in its own section of this report, and discuss cybersecurity in the context of some of the challenges facing tech and telecoms across the continent.

Other technologies picked out as key investment opportunities were the cloud (14%), IoT platforms (13%) and Blockchain (10%). The rate of adoption of cloud-based services across Africa is reported to be three times higher than the global average, with the market now worth $1.7bn. Much like mobile, cloud technology is seen as offering African enterprises a way to ‘leapfrog’ previous developmental stages in technology that have been hampered by poor physical IT infrastructure. The potential economic benefits are considerable - the IDC estimates that increased adoption of public cloud solutions like Microsoft Azure and AWS could help businesses generate $5.8bn in extra revenue and create more than 100,000 additional jobs in South Africa alone.

Other technologies picked out as key investment opportunities were the cloud (14%), IoT platforms (13%) and Blockchain (10%). The rate of adoption of cloud-based services across Africa is reported to be three times higher than the global average, with the market now worth $1.7bn. Much like mobile, cloud technology is seen as offering African enterprises a way to ‘leapfrog’ previous developmental stages in technology that have been hampered by poor physical IT infrastructure. The potential economic benefits are considerable - the IDC estimates that increased adoption of public cloud solutions like Microsoft Azure and AWS could help businesses generate $5.8bn in extra revenue and create more than 100,000 additional jobs in South Africa alone.

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