Competition will put pressure on both the small and big operators, although the small operators will be challenged to find new and innovative ways to generate revenue and growth while maintaining a high quality of service on extremely tight margins.
Africa's mobile penetration is still below 30 percent, with plenty of room for growth, but Syniverse says it has favored big operators with large revenue bases. In some cases, smaller operators have been pushed out of business, but there is opportunity for those who have survived, according to Eugene Bergen Henegouwen, executive vice president, Syniverse EMEA.
"Smaller, independent African operators certainly are not in danger of dying; increasing competition in Africa puts pressure on operators of all sizes. Smaller market entrants have excellent opportunities to grow -- in many cases, they are more nimble and better able to react quickly to changing market conditions," said Henegouwen.
The licensing regime in several countries, however, has favored bigger operators by default, by offering unified licenses with few -- if any -- restrictions on services that can be offered.
In Kenya, the unified licensing regime has allowed big companies like Safaricom to enter into mobile content and application provision, which has exerted pressure on smaller mobile content and application service providers that cannot compete with Safaricom's revenue and market base.
South Africa is the first country to have a policy that protects smaller players by defining the dominant players and how the big companies interact with smaller content and application providers, which has kept some of the companies in business. The Independent Communications Authority of South Africa has a policy, for example, that stipulates that dominant players can't engage in certain services like mobile content. They have to buy content from third-party providers, usually smaller companies.
Syniverse predicts that competition and increased demand will lead to companies investing in newer technologies such as LTE (Long-Term Evolution) and WiMax as well as fixed technology in order to stay ahead of the curve.
Although many countries have second fixed-line operators, GSM (Global System for Mobile Communications) has been growing faster, and even the former monopolies that have most of the fixed-line network have preferred to invest in GSM infrastructure, because that is where the major profits are.
"The trend of mobile technology growing faster than fixed line represents the most exciting opportunity with the greatest potential; mobile operators invest heavily in infrastructure and operational support systems, so it would make sense for them to leverage those investments instead of diving afresh into other market categories," added Henegouwen.
Syniverse, which provides messaging and roaming applications for mobile operators across the continent, predicts an increase in the use of rich multimedia data, including Multimedia Messaging Services and location-based services such as social networking, and increased data growth across multiple operators that use different carrier technologies.
"Operators will have to work quickly to establish business agreements that allow them to capture the best possible revenue opportunities from this matrix of services and infrastructures," said Henegouwen.
Energy will continue to be a challenge for many providers moving into untapped markets that may not be connected to the power grid.
"Current energy infrastructure is unable to cope with the ever-increasing demand for power supply needed by new telecoms infrastructure, resulting in power shortages and mobile service interruptions, as well as problems with connectivity," Henegouwen said.
Governments like South Africa, Kenya, Tanzania, Uganda and Nigeria have had power problems, but the move for green solutions and carbon credits is catching up with operators in the region.