MTN Group says Nigerian mobile foray was ‘risky’  

MTN Group’s decision to launch its Nigerian mobile unit was considered a very risky business foray at the time, according to a key insider at the South African telecoms group that owns MTN Nigeria.

MTN Group’s bet has paid off as MTN Nigeria has not only become the largest mobile network operator (MNO) in the country, but also “an important MTN subsidiary, accounting for some 27% of all MTN subscribers and some 23% of Group service revenue,” according to its parent company.

“I think MTN as a business was very visionary,” Enzo Scarcella, Chief Consumer Officer at MTN Group says, while reflecting on the 30th anniversary of the mobile telephony group.

Group Chief Consumer Officer: MTN as a business was very visionary

MTN Nigeria’s decision to launch service in Nigeria in 2001 was considered risky at the time, with critics doubting its viability due to the high $285 million cost of licences at the time and a limited customer base.

“I remember people were saying MTN is mad for trying to go into Nigeria, you know you’re gonna pay so much for a licence at the time, you’re never going to make the money back,” Scarcella recalls.

Yet, the move has proven successful, with MTN Nigeria now serving over 80 million subscribers with a 51.09% market share as at October 2024, according to data from the Nigerian Communications Commission (NCC).

Scarcella joined MTN Group in 1994, a time when mobile telephony was still in its infancy. “At the time, the world was trying to figure out this thing called GSM,” he says.

Hitherto, MTN focused on postpaid voice services, catering to a niche market of rich users who could afford the luxury of mobile phones. However, the introduction of prepaid services in 1996 changed the game, making mobile connectivity accessible to people who were previously excluded.

History of MTN in Nigeria

On May 16, 2001, MTN Nigeria made history by becoming the first GSM network to make a call, following the Nigerian telecoms regulator’s GSM auction earlier that year. The company then launched full commercial operations in key cities, starting with Lagos, Abuja, and Port Harcourt.

When MTN Nigeria launched in 2001, with its first call placed at Maritime House, Apapa, within a year, the company had about 250,000 subscribers, the market was still very new. Mobile phones were a luxury, and the country had only 700,000 fixed lines and 22,500 mobile lines for a population of over 120 million.

By 2003, MTN introduced per-second billing, which made mobile calls cheaper and accessible to more Nigerians. By 2003, the company reached over one million subscribers. This number grew steadily, with the MNO hitting over 10 million subscribers in 2006 and over 50 million by 2013. By December 2018, MTN Nigeria had approximately 67 million subscribers, according to NCC data.

In 2006, MTN Nigeria was granted a Unified Access Service Licence, allowing the company to provide a range of services, including fixed, mobile, and international gateway services. In 2007, MTN acquired a 2GHz spectrum licence, enabling it to offer 3G services. 

MTN Nigeria also developed an extensive digital microwave transmission network, commissioned by then President Olusegun Obasanjo, stretching over 3,400 kilometers. This network was launched in 2003 and was the largest of its kind in Africa at the time. Additionally, the company expanded its network capacity by adopting new numbering ranges after exhausting its initial subscriber pool. MTN Nigeria was the first GSM network in the country to do so.

In December 2015, after receiving approval from the NCC and the Securities and Exchange Commission, MTN acquired Visafone Communications Limited, which held spectrum in the 800MHz band, enabling MTN to offer 4G LTE services in Nigeria. In 2016, MTN submitted a successful bid for the 2.6GHz band, securing the 2x30MHz spectrum, which further boosted its ability to offer high-speed mobile services.

Today, MTN Nigeria operates one of the largest fibre optic networks in Nigeria, with over 35,000km. In September, 2022, MTN Nigeria became the first telecoms operator to launch 5G services in Nigeria. 

MTN’s efforts have contributed to the widespread adoption of 4G services, with coverage now extending to nearly 90% of the population.

However, Scarcella says that only 45% of users have 4G-compatible devices, leaving a significant gap in access to high-speed internet. To address this, MTN says it has introduced device financing and collaborated with smartphone manufacturers to produce affordable smartphones tailored for the African market.

“So we’re working with smartphone manufacturers at the moment to take a lot of the functionality we think is superfluous out of smartphones to make it cheaper so that the bottom of the pyramid can start accessing 4G devices,” the MTN Group’s Chief Consumer Officer says.

One of the most impactful initiatives in Nigeria has been the introduction of mobile money services, which has driven financial inclusion.

Despite these, challenges remain. High costs of infrastructure deployment, limited access to affordable devices, and the need to scale 5G adoption are pressing concerns.

MTN says it is actively addressing this through the ongoing deployment of fiber-optic networks in Nigeria, Ghana, Uganda, among others, this infrastructure aims to reduce internet costs and bring high-speed connectivity to working-class households.

“But I think when you’re in a reflective mood and you look back,” the MTN Group’s Chief Consumer Officer says, all of us can be proud because I think what we’ve done on the continent, from almost zero people on the internet to today, we have a 150 million people on the internet on our networks. That’s a massive massive part of the world’s population that we have the privilege of serving. The one thing we give people is dignity. And the second thing we give people is opportunity. And for that I’m massively proud.”