- Apart from adapting to new technology, it is imperative that companies invest in research and development in order to stay ahead of the curve and ensure that their proposition to customers is responsive to current and emerging needs.
- Services such as payments and data have become critical in supporting expansion of e-commerce with firms, which were quick to respond and take advantage of digital platforms cementing their position as market leaders.
Spread of Covid-19 virus has led to a paradigm shift as most businesses try to survive by recalibrating their operation models with technology as a key driver and platform.
Although almost every firm has been hit at different levels by the pandemic, companies in mobile and digital space are perhaps the most affected as they have to ensure that customers are able to access services key to supporting other economic sectors.
Apart from adapting to new technology, it is imperative that companies invest in research and development in order to stay ahead of the curve and ensure that their proposition to customers is responsive to current and emerging needs.
Services such as payments and data have become critical in supporting expansion of e-commerce with firms, which were quick to respond and take advantage of digital platforms cementing their position as market leaders.
But while adopting new technologies, companies need to avoid what is known as the Nokia Effect. Nokia tumbled from the most dominant mobile phone manufacturer in the world to a shell of its former self, because of its failure to adapt to new technology.
Success of Safaricom, Kenya’s leading mobile telephony company has been driven by innovation in its product and service offering. This includes M-Pesa, mobile data services, Safaricom Home Fibre, voice and SMS.
A recent move by the telco to unveil the 5G network in Kenya cements its leadership in innovation and product offering. The roll out of the network is expected to benefit Kenya immensely as the technology allows people to transfer data at much higher speeds compared to the 4G network. The grid is also expected to improve connectivity, data transfer and processing, online gaming, and video streaming services because it will perform at scale, adapt at pace and unlock new revenue streams.
Rollout of the network is expected to benefit licenced companies that deal with online forex trading such as Scope Markets and others. Customers will now be able to undertake online forex trading at their convenience with enhanced internet speeds and data transfer with 5G-compatible devices.
We expect to see other Telcos in Kenya roll out the same in the near future in order to augment their product offering and remain competitive.
However, local companies should not rest on their laurels as new technologies are coming up and they need to adapt quickly. Emerging technologies have enabled new market entrants to leapfrog and threaten established players.
For example, Starlink is an American company associated with Elon Musk, founder of Tesla, has launched over 1,320 satellites in low-earth orbit and is looking to cover the whole world with a network of 42,000 satellites to provide internet connectivity globally at competitive prices with good speeds.
This may pose a threat to telcos and other local internet service providers in Kenya with the urgent need for them to find ways of making their services cheaper and more efficient.
Smartphone producers such as Apple, Samsung, OnePlus, Motorola, Oppo, and Lenovo are already manufacturing devices that support 5G networks. For these gadgets to use 5G networks, internet service providers need to upgrade their network devices for compatibility. 5G networks are already in place in Eurozone countries, US, UK, China, South Korea, and Japan.
Local companies could also borrow from global companies that are entering into mergers and acquisitions with those that come up with new technologies. For instance, Facebook is developing a cryptocurrency named Libra, Nvidia is acquiring Arm, Volkswagen is looking to make electric vehicles manufacturing its core business in direct competition with Tesla, and Fiat Chrysler merged with Group PSA (Peugeot) to form Stellantis.
In Kenya, where over 75 percent of the population is under 35 years, expanding the 5G network to cover the whole country would be a great step. Research has shown that a majority of youthful clients prefer to trade on the go and mobile money platforms offers them convenience and ease.
It is only companies that adopt new technologies quickly that will be able to sustain growth and relevance in an ever-changing world.
The writer is a Research & Markets Analyst at Scope Markets Kenya Email [email protected]