The next big thing is content

News from the conference room: this is a series of blog posts in which blogging experts briefly review key Tech4Africa 2010 talks and panels from Day 1 and 2.

Day 1

The race to lay fibre optics cables into Africa is on, with around 10 cables either landed or planned by 2012*. What does this mean for business, consumers, rural areas, and communications service providers themselves?

An interesting debate emerged under a session about “The promise of fibre, the last mile, wireless and ubiquitous bandwith”. MTN, Vodacom, Infraco and Seacom spoke about their competing interests and how collaboration is crucial for the future. So far, mobile operators are collaborating on laying cables.

But that’s pretty much where it stops.

Everyone on the panel –Duncan McLeod (Techcentral), Stafford Masie (Seacom), Angela Gahagan (MTN Business), Pieter Uys (Vodacom),Dave Smith (Broadband Infraco)- recognized that the proliferation of cables coming into Africa means that costs will inevitably come down – it’s just a matter of time. And that introduces issues of sustainability for businesses currently working in this space. What are they going to do when competition drives down the price of infrastructure costs and their revenue models are threatened?

Seacom’s Stafford Massie stuck his neck out and said it’s time to move the game on from discussions about infrastructure. He suggested that providers are currently engaging international content owners in a very predatory fashion – wanting exclusivity in their deals – because they’re still obsessed with ownership of infrastructure (see individual cables and towers, placed right next to each other). However, content owners (such as Google, Youtube, Facebook and others) want more openness and are not prepared to be locked into MTN exclusive or Vodacom exclusive deals. Stafford suggests that for the future, the discussion should be about how operators can diversify and monetise new business models.
Massie believes that the way to make money in this space is in content and application services with a pan-African open access platform.
Content however, is a different game to infrastructure. Content models work much better with co-operation, alliances and openness, rather than secretive competition. You have to be more innovative about how you make your money. The telecoms giants in south Africa are possibly too comfortable in their dominant ownership of the space and may well see themselves losing large chunks of revenue to more open and creative players over time.

Angela Gahagan of MTN says they do have value added services, and products that focus on cloud computing, but insists that without the infrastructure, you can’t look at the add-ons. Pieter Uys of Vodacom was equally defensive about the need for infrastructure. There was recognition that providers still need to deliver on terrestrial infrastructure and establish additional footprint to get to underserviced areas. However, apart from SEACOM (represented by Massie) none of the big guns seemed to be able to lift their eyes beyond the current model of getting more subscribers and traffic through “owning” the infrastructure. Perhaps this is a reflection of the bedeviled ICT regulatory environment in South Africa.

Both the panel and participants spoke about how looser regulation allows for a whole different approach to ICT innovation. Kenya has managed to achieve far more Internet penetration and telecoms services, largely because Kenya’s ICT space isn’t highly regulated, allowing plenty of opportunity for innovation and entrepreneurship. In discussing leadership, participants said they have tried to work with politicians but so far it just hasn’t worked, so what next? Stafford Massie encouraged people (especially individuals who have the government’s ear) to try again – he said that politicians are not technological people. Things have changed so much in the last 2 years that it’s worth going back to politicians to show them examples of how technology can transform peoples’ lives.

More details on this topic on this podcast with Stafford Massie.

* The current and planned cables include South Asia Telecom Cable (SEACOM), SAT-3, Main-one, Glo-one, East African Submarine Cable System (EASSY), The Eastern African Marine Systems (TEAMS), and West Africa Cable System (WACS).

Samantha Fleming