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Africa’s mobile operators start to offer Blackberry-style e-mail and IM services

Faced with falling voice ARPU and uncertain levels of data revenue from 3G services (launched or scheduled to be launched soon), a lot of African mobile operators are thinking of generating additional revenue through other services that don’t necessarily require massive CAPEX investments. Synchronica is successfully punting Blackberry-like e-mail and IM services plus social networking to African mobile operators with a recently closed group deal with Airtel. Isabelle Gross spoke to David Clark, Marketing Manager at Synchronica, about their mobile services portfolio, their purchase of Nokia’s branded messaging services and the business opportunities in Africa.

In June 2011, Synchronica announced a deal at group level with Bharti-Airtel for the rollout of its mobile gateway 5 portfolio of services across all Bharti-Airtel’s operations including their operations in Africa. According to David Clark, Ghana will be the first African country where Synchronica’s mobile gateway will be launched under the label “Airtel Connect”. Soft launches are currently rolled out in other African countries where Airtel operates to test the portfolio of services before their commercial launch in the near future.

In Ghana, Airtel Connect will offer the full range of services available on Synchronica’s mobile gateway 5 for a monthly flat fee or subscription of US$1.50. Mobile subscribers will have access to push email (similar to Blackberry’s email service), instant messaging and a range of social networks. One of the strongest selling points for Synchronica’s portfolio of services is that it works on over 6,000 different handsets ranging from basic mobile phones to smartphones.

This is an appealing incentive because a large number of African mobile operators have little influence on the mobile handsets sold in the country (it’s nearly a 100% prepaid market) in which they operate. Basic phones, feature phones and even smartphones enter African countries through distribution channels that are largely outside of the mobile operators’ control. A while ago, a smartphone manufacturer complained to me about Nigeria where it is difficult to build a marketing strategy for its devices with the local mobile operators because most of the handsets make their way in the country through other routes.

David Clark explains further that Synchronica’s mobile gateway platform is quick to deploy and relatively cheap. In the case of the Bharti-Airtel deal, Synchronica’s mobile gateway platform will be available under a perpetual licensing scheme for a one-off fee but Synchronica also proposes a monthly fee per user that might be better suited for smaller mobile operations that don’t want or can’t afford an upfront big cash layout and feel more comfortable with recurrent monthly payments based on the take-up of the services among their mobile subscribers.

Synchronica’s mobile gateway platform is offered as a “white label” which allows mobile operators to package the services under their own brand and consequently they retain ownership of their subscribers and further retain and possibly acquire new customers attracted by the interactive services on offer.

The services available on the mobile gateway platform can also be tailored to fit a mobile operator’s segmentation of its subscriber base e.g. push email, instant messaging and social networks features can be made available to all its corporate customers whereas instant messaging and social networks feature will be available to students only for a lower monthly subscription fee for example. In the case of a mobile operator in Gambia which was under competitive pressure to offer to corporate customers a service that would help it to differentiate itself from the competitor mobile operators’ offers, Synchronica has set up its mobile gateway with a push email service on a 2G network.

On the purchase of Nokia’s branded messaging services, David Clark explains that the plan is to integrate the messaging service into the Synchronica’s mobile gateway portfolio. For the company it will be a kind of introduction to Nokia mobile technology and the aim is to enrich the next version of the mobile gateway platform with more features and improve its usability in particular for feature rich phones and smartphones.

Alongside this acquisition, Synchronica is taking on the maintenance and support of Nokia’s messaging services. While the company is busy at expanding its portfolio of services for mobile operators and corporate customers, Synchronica is also looking at strengthening its relationship with handset manufacturers. It already has got eight deals in place, two with tier-one handsets manufacturers and six with tier-two manufacturers. It has for example a deal with mi-fone, a cheap handset manufacturer offering low end, feature rich and smartphones. For Synchronica, the goal is again to sign more partnerships preferably with top brand manufacturers to expand its footprint in this segment.

While expanding its portfolio of services and its customer base, Synchronica remains focussed on emerging markets and thus despite the fact that the Nokia deal brought in new customers from North America and Europe. According to David Clark, emerging markets and Africa are the markets with the best growth potentials, a kind of “last frontier for growth”.

Today in Africa, there are around 500 million mobile users while the overall population of the continent is over 1 billion. There is yet an untapped demand to meet while in developed markets, mobile penetration has reached saturation with above 100% penetration rates in most countries. However  reaching the remaining 500 million mobile users in Africa (less 200/300 million children under the age of 5) presents some difficult challenges for mobile operators and service providers alike Synchronica. Faced with potential customers with very low ARPU, there is very little room left for any mistakes on capital and operational expenditures for mobile operators and any add-on services will have to come at a cut-throat price.

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