In 1880, the United States Census Bureau faced a big problem: data collected from a census the same year would take 8 years to process.
It took a young staff of the bureau, Herman Hollerith, to come up with an ingenious solution that cut down 8 years of work to 3 months.
By the 20th century, data storing had gone digital. During the Second World War, the British Army needed to crack Nazi codes and therefore built a 5,000-characters-a-second processing machine to decipher patterns contained in messages intercepted from the Germans. Its name? Colossus.
Today, that ‘colossal’ amount of data is an infinitesimal fraction of what the least-sophisticated smartphone could handle, let alone your business computer, all thanks to the internet (r)evolution.
By current standards, businesses require data connection speeds of up to 1 Gbps to meet professional demands. However, the rate of technological advancement is brisk.
Just when Big data solutions are being engineered to accommodate the ever-increasing surge, the advent of the Internet of Things (IoT) means data is about to get even bigger and at an exponential rate.
And that could be in as little as 2 years from now.
The IoT presently grows at about 127 devices per second (over 4 billion devices annually) with projections of up to 34 billion total connected devices in 2020, up from 8.4 billion in 2017.
Much of these devices optimise business operations and as IoT expands, average annual corporate connectivity expenditures will rise on an average of 15% in the next four years. To cater to such expansion, connectivity providers, especially mobile virtual network operators (MVNOs), need to extend their coverage and also probe newer cost-effective technologies to stay afloat.
Frankly, the African continent often lags behind in embracing innovations. But ironically, we have done incredibly well with Big data.
In Nigeria and Kenya, about 40% of businesses are in the planning stages of a big data project compared with the global average of 51%. The Square Kilometre Array (SKA) in South Africa will start observatory exploits by 2022, and will have the processing power of about 100 million PCs, generating data more than 10 times the current global internet traffic.
Nonetheless, MVNOs in Africa have not done particularly well, with just 13 of them feeding the Sub-Saharan African market. They made their mark in the telecom sector leveraging the telephony and internet data shortfall. But as data gets bigger, they face the greatest risk going forward.
- Big data framework requires huge funding which many MVNOs lack, although experts have proposed a global contract with a single MNO\MVNE (that in turn links agreements and partnerships with multiple MVNOs) as a solution.
- There is a razor-thin profit margin for MVNOs as MNOs do not currently support them with good pricing models, leading to low average revenue per mobile communication user (ARPU) for the MVNOs. The most striking example is Nigeria’s 9mobile (formerly Etisalat) which posted heavy losses, forcing out the UAE-based investor from the country.
- Regulatory regimes are grossly unfavourable to the growth of MVNOs. Matter of fact, incumbent MNOs\MVNEs sabotage MVNOs by competing unchecked in the same target segments. In Europe and other climes, MVNOs are encouraged by regulators as a way to increase competition and reduce prices, a phenomenon absent in Africa.
But the murky picture is not all there is.
Innovations addressing specific market segments and value propositions paint a bright future.
The everything-connected-world is giving and will continue to give rise to new market segments such as machine-to-machine (M2M), Artificial Intelligence (AI) and Virtual Reality (VR), meaning MVNOs will have to come up with industry-specific solutions especially targeting small businesses and entrepreneurs.
And with Big data comes big network infrastructure – 5G and LPWA – where MVNOs should keep tabs on, but ensure making the most of present 3G infrastructure. Indeed, the vast majority of connections in the IoT space are still LTE, 3G and 2G based. 5G deployments will, however, give birth to a new breed of MVNOs targeting specific verticals (e.g. cloud services and Big data solutions).
Projections show that revenue from big data in the Middle-East and the Africa (MEA) region will rise from 2.2 billion dollars in 2017 to 3.2 billion dollars in 2020. A wide array of industry subsets like agriculture, health, transportation, military, tourism etc. leave a huge void to fill, effectively accommodating up to 500 new MVNOs on the continent before the decade ends.
It is clear that MVNOs here are walking a thin line. But it doesn’t necessarily have to be a waiting game. The ecosystem is replete with diverse opportunities from the growing market demand which is still compatible with existing network infrastructure while building alongside futuristic solutions for the years to come.
What MVNOs need is a three-pronged strategy:
- From MNOs\MVNEs: network agreements with favourable terms, profitable pricing and wider coverage options.
- From the regulators: clear regulations that guarantee fair competition.
- From the MVNOs: cutting-edge, industry-specific solutions that make use of the existing infrastructure while gearing up for the brewing data storm.
Going forward, an indubitable, urgent requirement of MVNOs is Big data analytics; combining data from multiple sources in the value chain and consolidating them to analyse trends and performance. This gives a holistic appraisal of the network ecosystem, informing decisions on how to thread the uncertain path the Big data future holds.
- Big data is the future of the telecom market and MVNOs should position themselves for it.
- IoT is the next big thing and the market should be tapped into.
- While Africa has done fairly well in big data, MVNOs should step up their game and strategies towards delivering Big data solutions to stay competitive.