As the telecommunications industry evolves globally, we recently had an enlightening conversation with a client operating the international voice gateway in a West African nation. Their situation provides valuable insights for anyone navigating regulated telecom markets or dealing with declining traditional voice traffic.
The Changing Landscape of Voice Traffic
“Voice call or voice business is slowly degrading,” our client explained during our call. “Both incoming and outgoing. Because of technology, people have free options – social media, WhatsApp with video free.”
This is a reality facing telecom operators worldwide. However, in developing markets, there’s still significant value in traditional voice services. As our client noted, “We are fortunate that we are in a less developed country where they still have traditional mobile units. Not most of them have smartphones to communicate.”
This creates an interesting window of opportunity – traditional telecom services remain essential while digital transformation gradually progresses.
Operating in Highly Regulated Markets
One fascinating aspect of this business is navigating government regulations. In many developing countries, telecom is heavily regulated, sometimes with a single authorized international gateway.
“We cannot decide unless they approve it,” the client mentioned. “We are fully dependent on their approval all the time.”
This regulatory framework creates both challenges and opportunities:
Challenges:
- Limited pricing flexibility
- Restrictions on service diversification
- Approval processes for technical changes
Opportunities:
- Protected market position
- Stable business environment
- Governmental support for essential infrastructure
The Infrastructure Challenge
Perhaps the most interesting insight came when discussing local infrastructure reliability:
“There’s only one internet provider here in the country. So, in case this guy has a problem, everybody has a problem. You don’t have option B.”
This reality forces businesses to maintain hybrid solutions – keeping critical infrastructure both locally and internationally as backup. While this increases costs, it ensures business continuity in markets with developing infrastructure.
Diversification Strategies
When traditional voice traffic declines, where do you go? Our client is exploring several paths:
- Regional interconnection: “We’re trying to interconnect with neighboring African regional countries directly to local MNOs.”
- SMS integration: While currently, SMS traffic bypasses their gateway, this represents a potential growth area.
- New technologies: Solutions like flash calls (using call initiation for authentication instead of SMS) could offer new revenue streams.
The key learning here is to stay adaptable while working within regulatory constraints.
Lessons for Telecom Businesses
Whether you’re operating in a developing market or an established telecom environment, several principles emerge:
- Embrace hybrid infrastructure: Maintaining redundancy across different geographic locations ensures business continuity.
- Work within regulatory frameworks: Understanding governmental priorities helps navigate restrictions successfully.
- Pursue strategic diversification: Identify complementary services that leverage your existing infrastructure and relationships.
- Value long-term partnerships: Our client has maintained the same technology partnership for nearly 8 years, creating stability in a changing market.
The telecommunications landscape will continue evolving, but the fundamentals of reliable service, strategic partnerships, and adaptable business models remain constant – whether you’re operating in New York or a small regulated market in West Africa.