South African telecommunications providers are pursuing mobile-data-driven diversifica­tion strategies that are creating growth opportunities for the industry and are bolstering their information and communication technology (ICT) services port­folios, Frost and Sullivan’s ‘South African ICT Outlook 2017’ study published in April reveals. Growing adoption of the latest technology business models by companies is attracting significant investment into the South African ICT industry.

Aggressive service diversification, along with strategic partnerships and acquisitions, are altering the industry landscape and compelling market participants to gauge market trends and growth opportunities before designing their services.
“ICT companies are creat­ing new revenue streams through software-defined data centres, flash storage, cloud-based mobile applications (apps), noncore outsourcing and business intelligence,” says Frost & Sullivan digital transformation senior research analyst Deepti Dhinakaran.

Nonvoice services, especially mobile data (3G and 4G), will drive market growth in 2017, he adds.

“The enthusiastic adoption of end-to-end Internet of Things (IoT) solutions has encouraged telecommunications providers to introduce mobile app-based services. Successful mobile apps, such as ride-hailing and mCommerce apps, are accelerating the overall revenue growth of the industry.” Further, backup and disaster recovery services will be the fastest-growing segment in 2017, driven by the need to ensure business continuity.

The study also predicts a signifi­cant increase in demand for managed network and appli­cation security services in 2017.

Meanwhile, government and the public sector, the trans­portation and logistics sector, and utilities will use Big Data analytics to a large extent in 2017, says Dhinakaran.

Further, despite the shutdown of mobile money services, technological advances in digital banking and payments are likely to transform the market this year.

This will drive the value of South Africa’s total digital payment transactions to $10.1-million during this year.

Most enterprises will increasingly look to outsourcing services to managed service providers to benefit from improved efficiency of IT opera­tions and cost savings, and adopt a proactive approach to maintenance.

The need for vertical-specific knowledge will compel business process management (BPM) providers to reinvent or realign their service delivery models, instead providing more face-to-face consultative engagement instead of offering one-time service over a voice channel.

The telecommunications, insurance and financial services industries will be the largest consumers of analytics services to improve their operational efficiency through a proactive, problem-solving approach.

“The convergence across telecommunications and entertainment markets, com­bined with the growing uptake of managed services, software-defined wide-area network technology, and consultation-driven BPM service delivery models will propel market growth,” notes Dhinakaran.

“In the managed services segment, there will be greater demand for network and appli­cation security services due to the need to improve compliance and security efficiencies.”

Additionally, challenging economic conditions charac­terised by continued weaken­ing of the rand and a grim recovery outlook are expected to continue this year.

This will make ICT exports cheaper, while enabling the domestic outsourcing industry to establish itself as a cost- effective outsourcing desti­na­tion, concludes Dhinakaran.