The telecommunications industry is continuing to change at breakneck speed. Faced with ongoing disruption from every side, operators have recognised — and are taking advantage of — their pivotal enabling role in a digital society.

Mounting pressure on the bottom line means the emphasis is still on driving efficiencies into the business, yet many African operators are also exploring new opportunities in a rapidly widening digital ecosystem by leveraging their extensive distribution capabilities and established consumer-facing brands.

Operators are well placed to act as catalysts of transformation in a fast-changing digital society. But before they can take advantage of changing customer and industry stakeholder expectations, they must decide where they want to play — and then focus rigorously on developing the strategies, technologies and talent that will be prerequisites for success in that area.

The alternative is to be side-lined as a "jack of all trades, but master of none" at a time when strategic vision and the ability to execute have never been more important.

Africa: the leading region for telecoms growth

Operator performance varies significantly by region. North American and Asian telcos have outperformed other regions, benefiting from increased scale and strong secular growth opportunities, respectively. Meanwhile, European operator share performance has improved in anticipation of consolidation, while Latin American telcos have felt the brunt of a worsening macroeconomic outlook.

For its part, Africa will remain the strongest region worldwide in terms of telecommunications revenue growth, supported by high demand for mobile data and continued opportunities in adjacent markets such as mobile payments.

The region's high potential is underlined in EY's 2015 Africa Attractiveness survey, which shows that the telecommunications, media and technology sector has become a major foreign direct investment (FDI) target, ranking first in the top 10 sectors by FDI projects.

Yet, ensuring that telecommunications services deliver healthy margins remains challenging.

Competition is rising as over-the-top (OTT) players expand the scope of their offerings, disrupting different industry verticals in the process. All entities in the digital ecosystem are now seeking new points of differentiation in order to maximise their share of customer spend. As a result, issues of competition and collaboration have never been more pronounced.

While operators still enjoy a majority of global ecosystem revenues, OTTs have grown their share to 10% in the space of a few years, and competition in retail and distribution is becoming more intense.

Navigating the road to 2020

The telecommunications industry and related verticals will continue to evolve dynamically over the next five years. Boundaries will blur among product categories as a range of industry actors shape customer demand scenarios.

Partnerships will play an ever more important role in driving innovation. In this light, operators must reconsider areas where they can take more discrete value chain positions as business-to business (B2B) approaches become a key facet of value creation.

On the supply side, operators must also heed a more diverse set of policies touching the industry. At a national level, there will be a greater focus on holistic digital agendas that incentivise the entire value chain; yet, the risk of fragmentation at a global level remains very real.

Meanwhile, spectrum release frameworks should be a focal point for African regulators in order to ensure that mobile data services can deliver on their growth potential.

Network capability will remain a key differentiator in a crowded marketplace. EY's survey of industry leaders reveals that 66% of emerging market operators foresee a rise in capital expenditure in 2015, underlining how network upgrade roadmaps will require careful deliberation.

Network sharing and tower outsourcing will continue to provide a platform for efficient growth in Africa, while M&A opportunities will arise as operators continue to seek economies of scale and scope.

As a more complex sector landscape emerges, operators must engage in a delicate balancing act. On the one hand, more selective business models will allow more targeted strategies backed by focused investments. On the other hand, preparing for a range of demand scenarios will be vital as customer needs evolve in different directions.

Greater agility will be vital for all as operators grapple with the demands of data-hungry end users.

Organisations that can clearly connect their network and service capabilities with changing customer needs stand to gain the most, and deeper levels of customer trust are vital if operators are to succeed with wider service portfolios.

Looking ahead, we expect to see operator strategies to develop in different ways due to more nuanced digital ambitions and contrasting prioritisations of growth and efficiency within their strategic agenda. Nevertheless, improvements across a number of domains — from customer experience to in-house collaboration — will be vital for all.

* By Myhan Naidoo, Telecommunications, Media and Technology leader at EY Africa.