We all know the challenges in the telecom sector in Africa. There is the problem of extra tax burdens on one side and the erosion of revenue, accelerated by OTT (over the top) services like WhatsApp which consume infrastructure capacities without the telecom companies earning decent revenue therein, on the other side.
Yet, these companies have opportunities to unlock more value if they can expand their sectoral focus. African agriculture is one area that promises growth for the industry. Our agriculture desperately needs telecom infrastructure in order to redesign it into the 21st century. Precision technology startups like Zenvus (which I own) will be catalytic for the continent, if connectivity is deepened.
Zenvus is an intelligent solution for farms that uses proprietary electronics sensors to collect soil data like moisture, nutrients, pH etc. It then sends the collected data to a cloud server via GSM, satellite or Wifi. Algorithms in the server analyze the data and advice farmers on the best farming techniques. As the crops grow, the system deploys special cameras to build vegetative health to help detection of drought stress, pests and diseases. Zenvus provides clear visibility for precision agriculture by looking at data in the soil and the crop vegetation. The data generated is aggregated, anonymized and made available via subscription for agro-lending, agro-insurance, commodity trading to banks, insurers and investors.
With AgTech IoT (Internet of Things) innovation, companies like MTN, Airtel, 9Mobile and Glo can pipe a lot of agriculture data to farmers, banks, insurers and others, across the food chain. The telcos will aim to improve the connectivity of sensors and other data-capturing devices on farms to help farmers turn data into actionable insights through software platform. The opportunity is huge as this is an untapped market. I am hoping that telcos can come together to seed a new layer of African farming through connectivity. An initiative to connect African farms would be a necessary investment for them to expand beyond where they are today.
Telecom AgTech Initiative Committee
I recommend for the telcos in their respective nations, to come together and setup a special committee, AgTech Initiative Committee, with focus to accelerate agricultural innovation through provision of connectivity infrastructure. (This will be similar to the Bankers’ Committee, in Nigeria.) The goal of this infrastructure will be massive connectivity of rural and farming areas. With this infrastructure, the telcos will develop AgTech businesses. For example, we will have MTN AgTech to provide connectivity support to Agtech entrepreneurs working in the areas of IoT across Nigeria.
People are talking of smartcity in Nigeria. We think that is largely elitist because we have more urgent things to deal with before we care whether the city is smart or not. The real deal right now is agriculture and the demand projection is huge because farming productivity is very low and any improvement in yield will improve the living conditions of more than 60% of the Nigerian working citizens. (It is estimated that more than 60% of Nigerians work in the agriculture sector. across the different layers of the value chains.) Did we note that the telcos will make more money in the process? As Nigerians do well, the bulk being farmers, telcos will have better returns since they have practically lifted the earning powers of the customers.
The telecom companies will help agtech entrepreneurs handle connectivity issues with a national standard, if necessary, set in the nation for the agriculture space. This is good business because the new business will help boost demand for data. We suggest for the telcos to work together and build a new business segment. Bringing a network and platforms, from agtech startups, together will quickly help drive the ag-innovation process.
In addition to providing farmers with the ability to track everything that’s happening in their fields, such as water pipe leak, irrigation, efficient fertilizer application, the telecom firms working with agtech entrepreneurs will aim to provide farmers with prescriptive recommendations, based on the combination of historical, geospatial and on-farm data. The key is partnership with the startups working in the agriculture technology space, who will need ways to move their data to farmers. Farmers pay data subscriptions and telcos enjoy.
Partnership for Agro-Productivity
The telcos need partnership with analytics and precision agtech entrepreneurs, across Africa. I have noted some of these companies in a recent piece in the Harvard Business Review. The telcos in this partnership will focus on their strengths in wireless connectivity and tackle some of the technical challenges of connecting devices and getting data out of the field and into the cloud. We envisage that they could decide to build a completely open IoT platform that any existing and future ecosystem of companies could build farmer-focused solutions upon, without being tethered to any network because the telcos have interoperability agreement. I do believe that participation and interests from the telcos will help accelerate innovation in this area.
The biggest opportunity for telcos will be soil mapping: document the soil fertility data of any farmland in Africa by taking samples across the areas. The technology exists, but the data requirement is relatively unprecedented and enormous. The soil data will be used to support building growth model for crops for each area as well as managing fertilizer mix, for each region. This means we want farmers to focus on crops where they will earn more, over just following cultural traditions handed by ancestors. To make the call, data will be required.
It is important to note that future opportunities, in telecoms, will come when telcos begin to move into legacy sectors like health, agriculture and begin to connect them. They have to do this connection with a business model that makes sense, for them, though. Specifically, for agriculture, the areas that require connectivity technology from telcos include:
The promise of agtech is huge for telcos, to radically transform the agriculture sector in Africa. If the telcos adopt a strategy to build the agriculture sector connectivity, they will unlock a new growth area in their businesses. They need to come together in order to make this work.
---Will you join me at Tekedia Business Innovation Webinar? $15 (or N5,000) by March 1. Click and register here today.
---Visit our Store for my books, cases, notes, etc. Now, enjoy our consolidated subscription for all contents (past, present and future).
-- We offer Advisory Services (tech, strategy & Africa).