Vodacom Proffers Solution to Telcos Dwindling Revenue Stream

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Following the significant decline in Average Revenue Per User (ARPU), in the telecoms business and across other enterprise businesses, leading to a drastic business change that is threatening the survival of telecoms operators, the Managing Director of Vodacom Business Nigeria, Mr. Lanre Kolade has advised telecoms operators to key into the technology of Internet of Things (IoT) in order to change the business narrative and remain competitive.

Kolade who made the suggestions during his keynote speech at the just concluded NigeriaCom 2017 conference, organised by Informa Telecoms Group, said: “There have been substantial declines in user spending on voice and text services, causing a decline in telco revenue. IoT has delivered a big growth opportunity for the industry due to the volume of connections expected and experts have projected the market will reach $14.6 trillion global market size by 2020.”

Kolade called on telecom operators to adapt to the changing times and source other revenue streams to replace what is being lost in the continuing revolution of communications.

“The Internet of Things offers significant growth potential and the opportunity to take a role in new vertical markets, such as automotive, healthcare and smart cities. As these sectors seek to adopt more IoT services, the opportunities that exist are vast.

He added: “Whether you are a hardware manufacturer or connectivity reseller, adding IoT solutions to your portfolio will open up new revenue streams from selling hardware, software and connectivity services, to a broad range of value-added services, such as consulting, integration and support. Telcos will have to look at the Internet of Things as a potential revenue generator to offset the declining revenues from core services.”

According to him, a lot of enterprise businesses are moving towards value added services as alternative means of generating money for their businesses, and the telecoms operators, must take decisive steps to move in that same direction, using the IoT technology, since the free services currently being offered by Over the Top Technology (OTT) operators are already eating deep into their revenue streams.

Across all industries, IoT solutions have been adopted to provide a host of different benefits, from increased Return on Investment (ROI) to developing stronger relationships with customers, with far reaching benefits projected for the future, Kolade said.

Telecoms operators had in the past, raised the concern that the free telecoms services offered by OTT operators, like WhatsApp, Skype, Yahoo Messenger among others, while riding on the infrastructure of legacy telecoms operators, was fast robbing them of their revenue streams. The telcos had even suggested that OTT technology should be regulated in order to tame their incursions into telecoms business, but the Nigerian Communication Commission (NCC), the telecoms industry regulator, made it clear that it was not ready to regulate the OTT technology in order to avoid a process that would lead to the stifling of technology advancement in Nigeria.

Kolade however advised telecoms operators not to panic about the incursion of OTT players into telecoms business, but warned that telcos must source for alternative revenue streams, using IoT technology.

According to him, by 2020, more than seven billion people and businesses, and over 30 billion devices, will be connected to the internet. The question is no longer about the adoption of IoT but rather its application to drive business success. “Vodacom’s IoT solutions support wireless payment devices and e-readers, energy usage and smart metering, chilling cabinets, remote asset monitoring systems and community health management solutions,” Kolade said.

He explained that Vodacom recently partnered Kaduna State Government to launch a mobile technology-based healthcare programme, SMS for Life 2.0, in the state, which aims to increase the availability of essential medication by monitoring drug stock levels and improving the delivery of healthcare for citizens who access public health services.