Aidi — Layoffs in the Africa
In this issue, we will discuss MTN Communications' 5G network and what this means for your business, the layoffs in the African tech space and alternatives you can explore instead of outright layoffs. Insider news from Aidi and opportunities for African startups will also be explored.
1. MTN 5G network in Nigeria:
The Nigerian Communications Commission in December 2021 awarded MTN Nigeria and Mafab Communications 100MHz spectrum licenses in the 3.5GHz spectrum band for 5G and were given licenses in March 2022 after bids were won and payments were made. Some of the obligations required of them by NCC include; service rollout in at least, one state in each geopolitical zone within a year or two and a minimum download speed of 100 Mbps. Via a draft consultation document by NCC for the deployment of 5G mobile technology in Nigeria, one of the targets for the engagements (which include research and input and funding 5G research-related projects) put into the development of the 5G network is to create new opportunities for Nigerian businesses at home and abroad and encourage in-country investment.
MTN Nigeria has kicked off an open 5G pilot that will lead up to a commercial launch in 7 states Abuja, Calabar, Lagos, Kano, Abeokuta and Ibadan). With this trial, customers with certain enabled devices will be able to connect with and try out the new service where coverage is available.
What does this entail? Recall that the first networks only allowed for analogue voices to be heard, 2G allowed these voices to go digital or be replaced by text messaging, 3G came with mobile data, 4G network fully facilitated widespread mobile internet use seeing that it gave room for higher speed and reduced latency. 5G will improve speed and lower latency (powering technologies such as augmented and virtual reality) and can support up to a million devices per square kilometre, connecting them all to the internet simultaneously.
Additionally, this will accelerate the internet of things such as smart cities and things, home care, smart manufacturing plans, etc. 5G will also bring 10x user experience throughput, 10x increase in connection density, 10x decrease in latency and 100x traffic capacity. It will accelerate the actualization of the national targets in the Nigerian National Broadband Plan enhancing Nigeria's digital transformation.
How does this affect businesses? With progression in mobile technology comes a disruption in business processes and the emergence of new competitors. Businesses that use new technologies in creating innovative ideas are usually at the forefront of disruption either through starting up new business ventures or transforming existing ones. Companies in the healthcare, logistics, media, retail, entertainment and distribution industries will change in line with the propagation of connected devices.
For startups in the healthcare industry, healthcare applications, including personal fitness and health monitors, drug dispensing devices and the expansion of telemedicine appointments will be easier and better. Additionally, 5G will support large chunks of data analytics, speeding up the time-to-market for new treatments and reducing costs associated with pharmaceutical research and development. It will also improve communication, creating and spreading telemedicine initiatives where patients can get appointments via video calls at a range that will give room for more accurate diagnosis.
For those in agriculture, this could mean more targeted applications of fertiliser, pesticides, nutrition and other inputs will be made more possible, better and faster, leading to cost savings and better environmental outcomes.
For logistics, 5G has the capacity to improve the efficiency and economy of road transportation by platooning road vehicles. It can be used for traffic control, fleet management and the remote control of vehicles. The 5G network can improve data collection to enhance and improve transport system efficiency and capacity (traffic analytics and improved transport system modelling, inclusive). In supply chain, the 5G network has the potential to improve road haulage and drone delivery services.
Generally, the 5G network will improve revenue for every business in all sectors and productivity for workers. Your employees will be able to collaborate more effectively (for example, your engineers can build and deploy faster) and service to customers will be improved. This also implies that people who work from home will have better and more reliable connectivity, making remote work more effective.
For entrepreneurs and business owners, the increased speed and reliable mobility 5G provides will enable you to meet the demands of your customers better, directly increasing business revenue. This will also increase productivity and the emergence of new industries, boosting the Nigerian economy.
Hello, ‘can you see my screen’ will hopefully be bygones soon.
Please see Deloitte’s report on enterprises building their business with 5G and how this can transform your business.
2. Layoffs in the African tech ecosystem
Between May and July, layoffs and salary cuts became everyday news in the American tech ecosystem. Some cited the effects of the COVID-19 pandemic, the global funding slowdown and overhiring during periods of rapid growth as a cause.
This layoff has slowly crept into the African tech ecosystem with companies like Swvl laying off 32% of its workforce, Wave laying off 15% and 54gene, 30%. Why then, are these layoffs happening?
Since the beginning of the year, the Asian, European and US markets have declined. This decline affected tech stocks the most. In addition, global startup funding slowed down as investors became less generous and invested less in startups. Although most predicted that early-stage startups will still get the bulk of investments compared to startups in the latter stages, this prediction has not been true. This article by tech cabal echoes this. Due to this slowdown, companies are trying to extend their runway and focus more on profitability instead of vanity metrics. In light of this, contract workers and employees in departments that do not directly affect revenue generation are laid off.
Some startups are filled with employees that the firm has no immediate need for due to the stiff and rising competition for quality talents. And so, companies that recruited talents in hope of utilising them in future soon realize that they can no longer be able to keep paying these employees. Additionally, the uncertainty of the market is a contributing factor to this recent event. Because of the difficulty in raising funding and the uncertainty surrounding when this will be over, founders are prone to be more focused on sales and revenue, pushing every other thing aside. For companies who are pivoting from their current business model to an entirely new one, existing employees might not fit into the new model; and so layoffs have to be done. For example, businesses built during the pandemic focused on providing Covid-19 test kits and other medical needs suited to the period might be considering a pivot and layoff workers who might not fit into the new model.
Layoffs affect both the business and employees. This HBR article explains other alternatives founders can take when situations like this arise as opposed to outrightly letting your employees go.
3. Inside Aidi
- Grey.co focused on providing cross-border payment infrastructure for transactions such as; getting paid, making and receiving payments and currency exchange, announced a seed funding of $2million for cross-border payment play and regional expansion. Read Idorenyin’s statement on the raise.
- Catch up on previous newsletters and all the insightful articles you’ve missed by visiting the blog
- The Ecobank Fintech Challenge identifies and partners with fintechs that are ready to scale and provides them with support and access to opportunities in Ecobank’s 33 African markets. Visit the website to learn more about the application process and prize.
- Early-stage startups providing identity verification services are encouraged to apply for the Smile For Success Startup Program. Successful applicants will be eligible for a $10,000 smile usage credit, access to all smile identity verification solutions and other perks. See the website for more details.
- Apply for the 2022 AgroHack Challenge for Nigerian agriculture entrepreneurs. Participants can win up to #1million, business support services and other perks. Applications are open till October 3, 2022.