The tariff wars between the mobile operators was bound to have a resounding effect at some point in time, with the day of reckoning coming by way of Safaricom announcement of their half year results that saw a 47.4 percent dip in half year net profit to Ksh 4 billion. Traditional voice and messaging has in the past been majorly peer to peer and served as the cash cow for mobile network operators. With consumers calling for lower tariffs on both these fronts, mobile network operators are having their work cut out for them, if the plum profits they have enjoyed in the past are to remain constant.
TNS Research International East Africa released a report last year dubbed – Digital Life 2010 that looked into what Kenyans are doing online. That alongside other research can help in determining where to place effort and financing toward the creation of compelling new services for mobile network operators. What is important though is that this innovation need not come from within the operators but they should look to the growing local developer community.
My growth area forecasts are as follows.
Mobile advertising is yet to be properly rolled out and positioned well. With MNO’s such as Safaricom poised to open up location based services, this can be very valuable for smaller businesses can never quite use traditional media due to obvious cost constraints. The challenge will be for operators to let go of the absolute control that they currently have on on-net inventory.
I also see mobile entertainment growing with smarter devices and better connectivity on mobile. Going beyond traditional music, ringtones and related products; mobile entertainment will deliver huge returns especially as niche content can be made available at higher price points. The bottleneck will be for mobile operators to develop better pricing models for such content. Currently, the consumer is literally double billed as they purchase content and pay for the bandwidth to deliver the content.
Mobile commerce has a long way to go. Straight to the point, I would like to see Mpesa, Zap or any other player in the mobile money space provide a true platform that allows for layered service creation seamlessly.
Mobile applications have received their fair share of hype, and growth locally is good. But when it comes to making money, the potential for localized apps will not be realized in the near future. A mix and match of SMS, mobile apps and mobile web will increase service uptake and resultant revenues for mobile network operators.
Of note is that the Safaricom Innovation Board is about to unveil its developer engagement platform that will see developers benefit from Safaricom’s recent deployment of a new Service Deliver Platform.
It will be interesting to see what new services result from this and how they will affect the bottom line for Safaricom.