These are exciting times to be an entrepreneur in Africa. Increasing connectivity and the growing popularity of digital payments are unlocking opportunities to access a young, tech-savvy population that will double in size in the next 30 years or so.
In fact, African markets are expected to record double-digit annual growth in digital industries over the next five years, driven by mobile infrastructure, affordable internet access and the growing number of smartphone users.
The arrival of 5G and its ability to provide last mile connections without the need to visit a property will be transformative, enabling small-scale internet service providers to launch and expand businesses and driving the adoption of digital commerce and the plethora of commercial opportunities connectivity makes it possible.
So, telcos and the technologies they provide will fuel an unprecedented start-up boom across the continent, allowing entrepreneurs to create wealth, provide employment and drive economic growth.
But will it be enough to sit back and watch this happen, or should telcos be doing more? After all, start-ups are often crucibles of innovation, developing new technologies, services and business models. By supporting them, telcos can tap into this new thinking and reap the benefits by adapting to new trends and meeting evolving customer demands. At the same time, they can seed robust entrepreneurial ecosystems and foster collaboration, knowledge sharing and partnerships. When all this happens, talent and investment flood in, creating a thriving business environment.
Telkom’s aspiration is to ensure our unrivalled infrastructure enables our digital future and we believe nurturing talent and entrepreneurship is as important as laying more kilometres of fibre. We have seen the proof of the pudding with our FutureMakers programme, which seeks to support tech entrepreneurs as they turn their ideas into commercially viable, scalable and investable businesses that can help address social issues.
Since it launched in 2015, FutureMakers has worked with more than 2,500 previously disadvantaged small, medium and micro enterprises (SMMEs), and in the past six years these companies have directly and indirectly created more than 66,000 jobs.
In 2020, FutureMakers launched a township incubator which provides structured 18-month training in innovation and digital skills, as well as software development and funding, and 11 businesses – three of which are already earning revenue from their products and services – graduated from the first cohort. Ten new enterprises joined the incubator this year and received a “business in a box”, which includes a laptop and other devices to support their business operations and productivity.
Another way telcos can provide a fillip for start-ups is through hackathons. FutureMakers has hosted three such events, presenting tech entrepreneurs with key Telkom innovation challenges. As a result, 13 businesses were incubated through the 22 on Sloane start-up campus and Tshimologong Digital Innovation Precinct in Johannesburg.
Another three businesses are part of the 18-month Telkom Tech Accelerator, which supports them as they test market assumptions and the amount of funding required, and they have been provided with financial support to develop technology platforms.
This year, Telkom made a commitment of R150 million over five years to build technology companies and facilitate investment into them. This programme will be run by Aions Creative Technology. Another new commitment, this time R100 million in supplier development funding over five years, will be managed by Absa and benefit SMMEs that are part of FutureMakers. Thirty-one companies were considered for investment and seven were approved.
Telkom is not alone in its efforts to be a start-up multiplier in Africa. Perhaps the most notable example is Orange Fab, an accelerator that supports start-ups in a dozen countries on the continent (and many more elsewhere) with mentoring, technical support and funding. It collaborates with selected enterprises in sectors such as telecommunications, Internet of Things (IoT), fintech and digital content, giving them the chance to work closely with the company as it helps them to scale their businesses and innovate in their respective fields.
Kenya’s largest mobile network operator, Safaricom, runs an innovation incubator that gives start-ups access to a network of potential investors, and its annual Appwiz Challenge encourages app developers and startups to create innovative mobile applications. Telecom Egypt has an incubator programme that emulates the approach adopted by its peers elsewhere on the continent.
There are other ways African telcos can act as start-up multipliers, such as providing application programming interfaces (APIs) and software development kits that allow entrepreneurs to build applications and services on top of their infrastructure. If they share anonymised and aggregated data relating to customer behaviour, usage patterns and network performance they can provide valuable insights to start-ups that help them to refine their products and services.
They can also facilitate digital payments and integrate fintech services so start-ups can conduct transactions, offer digital services and reach a broader customer base. And with 5G beginning its march across the continent, they can support start-ups working on IoT solutions and smart technologies. Providing connectivity, network support and platforms for IoT applications can help start-ups develop innovative solutions for sectors such as agriculture, healthcare and smart cities.
Beyond the bottom line, supporting start-ups is simply the right thing for telcos to do, especially when the entrepreneurs involved are from under-represented or disadvantaged communities. And because start-ups often focus on solving local challenges, by supporting them telcos can contribute to addressing critical societal issues and improving the quality of life for their customers.
Supporting startups aligns with the business interests, social responsibilities and long-term sustainability goals of African telcos. By nurturing fledgling businesses, they can drive innovation, economic development and societal impact, positioning themselves as key players in the continent’s dynamic entrepreneurial landscape.