Africa’s Communications Market Isn’t Too Expensive — It’s Just Broken

Africa’s communications market is broken, but not for the reason you think. It’s not a pricing problem — it’s a market-design problem. And the fix is redefining what we pay for.

In the old model, the equation was simple. An MNO provided a network, a subscriber made a call or sent an SMS, and a tariff was charged per minute or per message. It was a straightforward utility model, where value was tied directly to consumption .

That world is over.

Today, the communications economy is far more complex. The emerging model is a vast ecosystem: MNO networks, wholesale infrastructure, CPaaS platforms, OTT apps (like WhatsApp), APIs, AI, digital identity, enterprise messaging, and fraud controls all competing and collaborating . The question is no longer, “How much does a minute or SMS cost?” but, “What value does a trusted communication transaction create?”

This is the fundamental shift we need to understand. It moves the debate from cost to value, from volume to trust.

The Old Market: A Simple, Volume-Based Model

Africa’s telecoms market was built on a simple premise: connectivity was the product. MNOs built the pipes, and they charged for every drop of water (voice minutes and SMS) that flowed through them. The regulatory frameworks, like Mobile Termination Rates (MTRs), which determine the wholesale fees operators charge each other to connect calls, were established to manage this simple exchange and ensure competition .

Retail pricing was a direct reflection of these wholesale costs. If it cost an operator to terminate a call on a competitor’s network, that cost was passed on to the consumer . This model was designed for a world where the primary users were individuals talking to each other.

The New Reality: A Complex, Value-Driven Ecosystem

Today, voice and P2P SMS are in decline, but the market is far from shrinking . It’s been replaced by a boom in A2P (Application-to-Person) messaging, mobile financial services, and conversational commerce .

Consider these new market design questions:

• Who can participate? The emergence of CPaaS providers like Infobip is democratizing access. For example, Infobip’s partnership with MTN-owned Bayobab allows brands to connect once and send messages to customers across the continent, simplifying a once fragmented process . This changes the competitive landscape, enabling new players to participate without needing direct contracts with every single MNO.
• What is the “product”? It’s no longer just a message, but a secure authentication, a verified transaction, or an AI-driven customer interaction. For example, the platform VERA, in partnership with cheqd, is launching a blockchain-based messaging system in South Africa that allows businesses to verify the identity of counterparts in real time to prevent invoice fraud . Here, the value isn’t in the message itself but in the verifiable trust it carries.
• How is it priced? As the Telemedia Johannesburg conference highlighted, the messaging market is shifting from a focus on volume to a focus on value . “The focus is now shifting to security and trust and compliance,” noted Vodacom’s Leah Pule .

Pricing is Becoming a Proxy for Trust and Security

This shift is visible in several key regulatory and business challenges across Africa:

• Re-regulating for a Complex Market: In Nigeria, a comprehensive review of wholesale pricing is underway. The regulator isn’t just looking at voice termination rates but also A2P messaging, USSD, and the role of MVNOs. This is because these services have become critical infrastructure for banking, fintech, and government services . The recognition is that outdated wholesale pricing distorts competition and discourages investment in essential services like digital financial inclusion .
• Managing the “Traffic Separation” Challenge: In South Africa, there is a fierce debate over “separation of traffic.” Operators are charging different rates for domestic vs. international A2P messages. On the surface, this is a technical pricing issue, but at its core, it’s about ensuring fairness, security, and compliance in a market where traffic is global and complex . Incorrectly classified traffic can lead to massive fines, making regulatory compliance a critical part of the commercial equation .
• The Value of a Verified Transaction: The Kenya MTR review, for instance, isn’t just about how much a call costs. It’s about how businesses will organize their customer support, balance traditional calls with digital channels like WhatsApp, and budget for communication in an economy where voice and data are becoming intertwined .

Conclusion: From “Cost per Minute” to “Value per Transaction”

Africa’s communications market has outgrown its original design. The old utility model, focused purely on cost-per-minute or cost-per-SMS, can’t accommodate the complexity of a world where a single communication might involve multiple networks, CPaaS platforms, and AI-powered verification systems.

The market is now defined by a new question: What value does a trusted communication transaction create? This is the lens through which we must view regulation, wholesale pricing, fraud prevention, and the role of new technologies.

The stakeholders who thrive will be those who understand this. It’s not about competing on the lowest price, but building the most trusted and valuable communications experience.