OBG talks to Manoj Kohli, Managing Director and CEO International, Bharti Airtel

Interview: Manoj Kohli

What role can infrastructure sharing play in terms of bringing down end-user costs in African markets?

MANOJ KOHLI: Prices in Africa are relatively high, except in a few countries like Kenya and Tanzania. The only solution to lower end-user costs in Africa is to bring down operators’ cost structure. Currently, the major costs for operators are networks, towers and fibre-optic. If operators commit to sharing infrastructure, those costs should significantly decrease. In India, fibre-optic is shared by all operators, and therefore customers enjoy low-cost services. Africa needs to go through the same process. Discussions are being held among operators to increase tower and fibre-optic sharing, and most of them have already responded in a positive fashion.

When is 4G long-term evolution (LTE) likely to arrive in Africa? Will it increase data consumption?

KOHLI: Africa’s greatest asset is its young people, who have a major hunger for data. Those markets have no digital subscriber lines, fixed-lines or fixed broadband, and so broadband has to be wireless. Most African markets are data networks supported by enhanced data rates for GSM evolution services and 3G high-speed packet access, which is the latest European technology. In India 4G LTE is picking up because data speed is very high and users love that. The faster the network, the more data will be consumed. Currently in Africa, only South Africa has launched 4G LTE. Other market players are considering launching 4G services in Ghana, Kenya and Rwanda. However, operators are in discussion with regulators to secure an 800-MHz spectrum to enable faster 4G roll-out. Most likely, 4G LTE should be available in Africa within the next two to three years.

What can be done to reach rural populations?

KOHLI: Telecom operators are committed to expanding their networks in rural areas. In the next few years operators will need to go deeper into the countryside to be able to reach the most isolated locations. Tower sharing should help this process along, as it will lower the costs of establishing and maintaining rural infrastructure. Sharing the infrastructure and costs are two of the prerequisites for increasing rural coverage.

Every government has universal service obligation funds, although allocation of these funds is rather slow. They need to expedite their distribution to expand in rural areas. However, power availability in Africa remains a concern for developing ICT infrastructure. Electricity shortages are a challenge and they impact the delivery of quality services, both in rural and urban areas.

How does the multi-SIM behaviour impact long-term growth prospects for operators?

KOHLI: This does not stop growth. The only concern is that the mobile penetration rate is lower than claimed. A holder of three SIM cards should be counted as a single individual and not three as is currently the case. In many African markets mobile penetration might be lower than people think – which is good for expansion potential. Multi-SIM behaviour is explained by high off-net rates – communication from one operator to another. In the future, as off-net rates decrease, this practice should become insignificant and we should see more single-SIM card costumers. Regulators are studying operators’ cost structure and as it is going down, they are reducing interconnecting rates.

What are the challenges over-the-top (OTT) services face in improving integration?

KOHLI: OTT services are fantastic. The telecom industry is delighted to see services like Facebook, Twitter or WhatsApp becoming popular. Hence, operators are liberalising those services because customers love them. Consequently, data usage is going up because of high consumption of those services.

There are discussions going on between the Groupe Speciale Mobile Association and OTT players on how to increase cooperation with each other. Frankly, OTT end-user consumption is very important to mobile operators. So, if we all collaborate, it will be win-win.