African telecom operators are facing new challenges previously associated with developed regions as the market in the world’s poorest continent approach saturation and consumer tastes deepen.

A report by TA Telecom shows that service providers are now facing challenges in the African telecoms market include: new devices like low-cost smartphones, over-the-top technologies and the negative perception of messaging services by a new generation of users, CIO East Africa reported.

The report outlines current market growth and highlights how cell phone penetration is currently over 80 percent of the target population. But despite these growth certain challenges have  severely affected the profitability of the telecoms market in Africa.

This means the global ARPU (Average Revenue Per User) for operators on the continent has fallen over 80 percent from 2001.

The report further demonstrates how to increase ARPU through infotainment subscription services and increase customer retention.

“It isn’t just technological advancement and shifts in business practices that make doing business in Africa such a challenge. Our report highlights how the consumer’s gender, religion, political views and news consumption have a powerful effect on the shape of the African market,” said Amr Shady, CEO and founder of TA Telecom.

“We wanted to emphasize the need for service operators to innovate and use technology to increase their earnings and market position.”

The report attempts to help African operators and investors from around the world understand how the market works and where they can fit in.

It is important that operators don’t forget that despite the rise of the smartphone in Africa, SMS should still be core to any infotainment subscription service. ”

The report concludes by explaining how, as budget smartphones become increasingly available in the African market, mobile service providers need to be able to act as catalysts for the communities that they serve, offering better and richer customer experiences.

Whilst mobile service providers may already have deep insights into their customer usage patterns, they may lack the tools to track, report and analyze these in a quantitatively disciplined way.