Vodacom strikes key deals as it repositions pan-Africa operations

Vodacom's new
take on Africa

Operations in key
markets repositioned.

Wednesday, Jun 26th

ICT spend in SSA to surpass US$95 billion by 2021

ICT spend in SSA to surpass US billion by 2021

ICT spend in Sub-Saharan Africa is expected to surpass US$95 billion by 2021 and spend on IT specifically will exceed US$19 billion, according to recent statistics released by the IDC.

Growth will be primarily within infrastructure and connectivity, but is increasingly moving into software and services, says Mark Walker, Associate Vice President for Sub-Saharan Africa at IDC.

Walker said between 2015 and 2017 the market witnessed a number of disruptions, which culminated in ICT spending contracting in 2016 for the first time in decades.

"Oil and commodity prices fell drastically from the end of 2014. (There was) political transition and developments, particularly in South Africa. Government spending was significantly curtailed. Private sector confidence was low...," said Walker.

A turnaround is expected this year, defined by a period of moderate recovery but one of transformative growth says the IDC.

The market analysis and research firm says oil prices have risen, more recently to the highest level since 2014, and government spending is expected to pick up – albeit more focused and cautious overall.

"More than the actual growth in spending it will be the type and texture of spending that will see big shifts. 2018-2021 will witness big changes to the spending mix. It will be a period of a relentless shift towards digital transformation and 3rd platform technologies... IT buyers will focus on doing more with less/same. They will squeeze out more savings from 'keeping the lights on' type of tasks and use the savings to fund DX," Walker adds.

Digital transformation

Digital transformation remains a key consideration behind ICT spend going forward, according to the IDC.

The company says most organisations are just beginning on their digital journeys and the expectation is that many will roll out initiatives this year. Customer experience and transformation has been identified as a key driver.

"Digital transformation is a multi-year journey. Breaking silos and aligning with line of business is not easy and takes time," Walker continues.

According to the IDC, smartphones experienced a dip in shipments and value in 2016 after experiencing double digit growth annually until 2015. The company says this was mainly due to macro issues (tough economic climates, currency devaluations) across MEA, longer refresh cycle due to reduced disposable income, and the push of feature phones to smart phone users that were converting for the first time.

Again, the company says 2018 will see a slight recovery, but not at the double-digit growth rates as experienced before.

Tthe GSMA's Mobile Economy 2018 report stated that mobile subscriber penetration in Sub-Saharan Africa will reach 52% in 2025 compared to 44% in 2017 and 48% in 2020. "In terms of mobile penetration of population, Sub-Saharan Africa will have the largest increase between 2017 and 2025 (8 percentage points)."

"The one problem we continue to face across the continent is that it is not fully connected. The networks across Africa are underdeveloped and there is a lot of opportunity in that space. It remains a mobile first continent, yet we are still behind in internet penetration and usage. So, there are still some big questions to answer around connectivity and the ability to communicate and transfer data across the continent," said Walker.

"We are, however, facing a technology revolution. Finally, the technology has caught up and we are in a position where the African technology revolution can happen. The concept of leapfrogging technologies and having huge social, political and economic impact is a reality now, but corruption remains a big issue across Africa. That said, technology can help with corruption by making things more transparent. We do still have a problem with talent, though. World-wide there is a need for skills and Africa is no different. We need to think about where we are going with technology and we need to have people ready and skilled to operate in these areas. Africa has a young population that is hungry for technology, but we are lacking in skills and this needs to be addressed," he concluded.

ALSO ON ITWEB AFRICA

Kenyan consortium launches mobile banking app Published on 22 May 2019

Mobile loan product Stawi introduced, backed by Central Bank of Kenya.

afriQloud cloud service launches in Uganda Published on 25 June 2019

To provide the African technology industry with cloud sovereignty.