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June 30, 2021

How challenger operators can thrive in Africa and the Middle East

By GlobalData Technology

Challenger telcos in a market where the incumbent has a dominant position can struggle to gain subscribers and market share across B2B & B2C segments. This is especially pronounced if challengers approach the segments where the incumbent is entrenched or strong with no differentiation.

Challenger growth blueprint:

Source: GlobalData, Insider Report Series, Challenger Operators in Africa and the Middle East Status, Market Impact, and Strategies for Success.

Several successful challengers chose to target relatively underserved segments by the incumbent, such as the entry-level, value-centric, digital savvy, and SME segments. Challengers have built tailored propositions for these segments, with differentiation in  bundled services, speeds, offered content, channels (digital vs physical) and customer care. Challengers can also target the different customer segments through dedicated sub-brands.

Telcos can offer each segment tailored bundling, VAS, and pricing to avoid value destruction and brand dilution while maximizing market reach and ARPUs for each segment. For instance, challenger Inwi Morocco has launched digital brand WIN, to target the tech-savvy youth segment with a digital customer journey, customisable mobile plans, and the flexibility to pause the plan when needed.

5G FWA can be a challenger strongpoint

Moreover, 5G FWA can help challengers compete on the fixed side. 5G FWA can provide a fiber substitute, helping challenger telcos compete in regions where incumbents have strong fixed broadband presence. Zain Saudi Arabia, for instance, is aggressively leveraging 5G FWA to compete with the incumbent and other rivals’ wired broadband solutions, while it builds its fiber footprint.

5G FWA can also be useful for fixed-mobile integrated challenger telcos to extend coverage in urban and suburban areas to drive a faster Fixed Mobile Convergence (FMC) provision for customers. Convergence can enable challenger telcos to build a substantial fixed market share, initially leveraging bundled mobile-fixed service discounts. Orange Jordan, for instance, leveraged fixed mobile convergent offers as a key growth engine, being the first telco in Jordan to introduce FMC, creating a clear differentiation from the incumbent.

Another area challengers can compete in is private 5G and campus networks which telcos can leverage to expand in the B2B segment. Telcos can also upsell IoT and managed solutions on top of this enhanced connectivity.