A Snapshot of 3G, OSS Opportunity In Africa

The privatization and development in Kenya, Nigeria, Uganda, Tanzania, Sudan and South Africa has made Africa one of the most dynamic telecom environments in the world. With a population of nearly a billion people, and nearly 44 million Internet users, there is tremendous opportunity for growth. Like the famous river crossing at Masai Mara, the African telecom market is attracting members of the entire food chain — with multinationals, telecom operators, and OSS/BSS companies racing to this potential feeding frenzy.

African operators in recent months have made significant investments in 3G, as it is promising as a means to introduce more bandwidth-efficient technology.

For example, MTN Nigeria, Celtel Nigeria, Glo Mobile and Alheri Engineering have recently paid $150 million for 3G licenses issued by the Nigerian Communication Commission. Some have admitted to carrying out initial tests on 3G services in some states in the country, and there is talk they will start 3G services by year’s end or soon after. In preparation, they are seeking operational efficiency, enhanced revenue streams and faster time-to-market. To succeed, they must address capacity constraints, activation and provisioning automation, QoS and revenue leakage issues.

These and other issues are being addressed by vendors and carriers. Though 3G was supposed to be a unified, worldwide standard, it has broken off into four different standards: UMTS (W-CDMA), CDMA2000 1xEV, TD-SCDMA, and Wideband CDMA.

As far as Africa is concerned, 3G is divided into two predominant camps: UMTS (W-CDMA) and CDMA2000.

Recently, major operators, handset manufacturers, chipset manufacturers and mobile software developers in W-CDMA came together at the “Low Cost 3G Devices” conference in London. Sponsored by 3G Licensing — the licensing administrator of the W-CDMA Patent Licensing Program — stakeholders evaluated key 3G issues, such as intellectual property rights (IPR) and their impact on the low-end 3G device markets.

Such issues will be very important as African operators get into the provisioning of mobile multimedia services such as music, TV and video, rich entertainment content and Internet access. W-CDMA is expected to be a key enabler, as it is the standard over-the-air transmission technology on which 3GSM services are based. For that reason, African operators are working with the 3G Partnership Project (3GPP) to further bolster W-CDMA as an open standard.

As 3G evolves in Africa, OSS companies are being sought to prepare systems for faster time to market, fraud management and revenue assurance.

For example, this past summer Mocambique Celular (mCel), the largest GSM operator in Mozambique (2 million-plus subscribers), contracted with Subex Azure, which has been headquartered in India since its founding in 1992.

Offering voice and GPRS/ EDGE services, mCel was looking to the future of 3G services, as it became one of the first in Africa to procure a UMTS 3G license. In order to maximize its potential revenues and prevent revenue leaks, the organization implemented Subex’s Nikira Fraud Management System and Moneta Revenue Assurance System. It also contracted with Subex to deploy SS7 probes in order to improve network monitoring capabilities.

mCel is not alone, as African operators need better network management technologies, business intelligence and rules-based systems that can facilitate optimal network usage, and detect unusual behaviors and revenue leaks. The annual Operator Attitudes to Revenue Management survey, which is conducted by research firm Analysys and is underwritten by Subex, found that operators in Middle East and Africa lose approximately 20 percent of revenue to revenue leakage, such as billing errors, fraud and other problems (the global average is 13.6 percent). These problems will become more challenging as postpaid, prepaid, VAS, MMS, m-commerce and other services travel over different network types.

Despite higher revenue leakage, African operators lose less than the average to problems like rating and pre-paid charging errors. Subex attributes that to the fact pre-paid services are so important in regions like Africa, where operators focus substantial attention on making sure that those services are being properly accounted for.

One carrier that has concentrated on making improvements in those areas is Kenyan wireless operator Safaricom, which invested $25 million on a 3G license. The operator recently launched a mobile money service, Mteja Pesa (M-Pesa) — one of the world’s first services for facilitating money transfer over mobile devices, as well as managing bank accounts over mobile phones. Safaricom has a huge potential user base, as evidenced by the GSM Association’s predictions that Kenya’s mobile phone sector will grow by 87 percent in the next five years — exceeding the 72 percent forecasted for the African continent as a whole.

With 3G-enabled phones, Safaricom hopes consumers can go further, by using the mobile to access Internet services and transmit data. Because Safaricom is just one of many Kenyan mobile carriers looking to 3G as a means to bolster the sale of data-enabled handsets, OSS and billing solutions that will support mobile e-mail access and other sophisticated services are a necessity.

“3G enabled services will help facilitate various modern e-applications such as remote medical diagnosis, remote education, as well as a variety of business-to-business and business-to-government applications,” said John Waweru, the director-general of the Communications Commission of Kenya (CCK).

A company like Intec Telecom realizes these types of applications are on the horizon. Intec has partnered over the past few years with Safaricom and other African operators in preparation.

“These carriers have learned from the negative experiences of some of the Western European carriers, who in hindsight clearly paid far too much for 3G licenses, and are now struggling to monetize that investment with the relatively slow take-up of premium services,” says Andrew Rodaway, director of marketing and communications, Intec Telecom.

“In Africa licenses are being awarded based both on financial considerations as well as the quality and viability of the business model proposed, plus geo-political factors such as assurance of service to remote regions,” says Rodaway. He concedes it is still expensive for operators to enter the market, but believes it is better for consumers and ultimately the licensees, and their backers. they can see a reasonable ROI on their investment in the future.” Rodaway believes successful licensees will be those who understand the different economic and social dynamics of Africa, and offer next-gen services relevant to the population being serviced.

As these services roll out, there will be a growing need for fully-convergent mediation capabilities to support mobile technologies.  Usage data has to be processed and disseminated in real time, especially as services take advantage of automatic activation. In the case of Safaricom, Intec’s Inter-mediatE system is used for mediation, and Intec’s Inter-activatE solution is used for flow-through activation of mobile services.
 
These types of solutions will be increasingly important to African operators, which need to launch new products and services quickly not only for marketing purposes, but also to accommodate rapidly changing regulatory environments.

In the article “Opportunity Awaits OSS and Billing Vendors in India," Subex Azure was incorrectly referred to as a “foreign” company doing business in India. In fact, Subex Azure has been headquartered in India since its founding in 1992.