South Africa’s MTN Group says government approval granted MTN Nigeria on the 800 MHz spectrum acquired from Visafone Communications Limited will lift its LTE plans in Nigeria.
“In the half, we finally got approval to use the 800 spectrum that we acquired a few years ago. So we’re going to have a big push to expand the LTE coverage now in Nigeria in H2”, Robert Andrew Shuter, MTN Group Limited – Group President, CEO & Executive Director, owners of MTN Nigeria, hinted during the mobile phone group’s interim results presentation held recently in South Africa.
MTN Nigeria, the largest mobile network operator (MNO) in the country, had in late 2015 acquired Visafone as its subsidiary, alongside an 800MHz frequency spectrum, to advance its ambition to expand its 4G LTE services nationwide.
However, the acquisitions of Visafone faced a major regulatory hurdle when the Nigerian Communications Commission (NCC) disallowed the transfer of Visafone’s 800 MHz spectrum to MTN Nigeria, a development that has impacted 4G LTE plans announced following the landmark deal.
Prior to the MTN acquisition, the Visafone brand, which is the leader in the Code Division and Multiple Access (CDMA) network segment, was founded by Mr. Jim Ovia, the influential banker behind Zenith Bank and a key technology industry investor and player.
Visafone, which was then boasting over million subscribers, became target of MTN acquission because its 800MHz spectrum frequency, which if added to the kitty of the largest MNO by subscriber base, was to boost its current voice and broadband data services and position it for the go-live of 4G LTE services in Nigeria, according to industry analysts.
Meanwhile, Shuter, the MTN Group CEO says the approval will now see MTN Nigeria pushing harder to expand its LTE coverage across Nigeria in the second half of the year to complement its voice, data and other offerings.
Shuter also hints that MTN Nigeria will be rolling out an Android low-cost smartphone, and this is a $20 device made by Mobicel, following the success of a feature phone introduced by the MNO.
“We did well with our smart feature phone. You may remember that we announced that right at the back of last year. We’ve rolled it out across a number of the markets, sold almost 300,000 of them. So that’s a $22 form factor of a basic phone, but it has Internet services, really useful for entry-level customers coming in. And not to stand on our heels, we also will be launching in the next quarter Android low-cost smartphone, and this is a $20 device made by Mobicel”, the MTN Group CEO says.
According to him, “I think the other big news in the half was we really can now implement Phase 1 of the fintech strategy in Nigeria because we were awarded a super-agent license, which basically allows us to mobilize our prepaid airtime distribution network also for financial services. In time, when we’re awarded the payment service banking license, we can also launch the e-wallet and allow customers to use their handsets as well.”
MTN Group CEO on MTN Nigeria | The key quotes
Robert Andrew Shuter, MTN Group Limited – Group President, CEO & Executive Director, owners of MTN Nigeria, cited the underlisted quotes during the mobile phone group’s interim results presentation held recently in South Africa.
MTN Nigeria Digital
Digital. Digital really is, I guess, 2 stories. On the one hand, you’ve got our legacy VAS business. And that business is really fading out of our results. And it fades out for 2 reasons because subscribers who are buying these services on basic phones, when they move to smartphones, and you can just download an app and access a weather service, you’re not anymore going to pay a small amount of money every month for that service. So the transition from basic phones to smartphones is really over time going to erode that VAS business. And the second thing is that we’ve really done a lot of optimization of that. We put a lot of controls in, double opt-in, controlling fraud, giving our customers a lot more choice.
So the shrinkage in the revenue looks quite severe, minus 43%, but as you see on the slide, there’s only really ZAR 1.4 billion left. That’s ZAR 1.4 billion of a ZAR 70 billion business. So the old business is fading out. And what we are trying to do on the right-hand side of the slide is to build the new digital businesses with a focus on media, messaging and mobile advertising. I think good progress there as well. We have an enhanced go-to-market plan for MusicTime. We’re going to be launching in Nigeria in H2. That was really one of the biggest markets for music streaming.
Ayoba. I’m personally very, very excited about Ayoba. It’s our own advanced instant messaging platform. We’ve launched it in 3 markets. The adoption has been really beyond our expectations. More than 300,000 active customers just in the 3 smaller West African markets. That’s before we get to Ghana, before we get to Nigeria before we get to South Africa. Rob Shuter, MTN Group CEO
MTN Nigeria Instant Messaging Platform
Ayoba. I’m personally very, very excited about Ayoba. It’s our own advanced instant messaging platform. We’ve launched it in 3 markets. The adoption has been really beyond our expectations. More than 300,000 active customers just in the 3 smaller West African markets. That’s before we get to Ghana, before we get to Nigeria before we get to South Africa. We made a lot of enhancements to the product as well. It’s got obviously instant messaging, pictures. It’s got emoticons. We’ve launched channels on Ayoba now, so enterprise customers can advertise. We’re going to integrate payments. We’ve got local language support. So there really is a big play going on there that I think we’re going to have just some fantastic news on that for the full year results with some really significant customer gains.
MTN Nigeria FinTech Drive
Fintech, major driver of new value creation. You can see revenue growth there, over 30%, ZAR 4.7 billion in H1, similar pattern to data as well. We’re growing the users, up at 30 million. We put on 2.4 million of net adds in H1. We’re growing the usage. Some staggering figures there. $44 billion of transactions went through our platform in the first 6 months of 2019. 9,000 — almost 9,200 transactions per minute. The first time we started talking about MoMo in this auditorium, we were at 4,200. So the usage has basically doubled on the platform. And now our attention moves to expanding the countries with the launches in SA, Nigeria, Sudan, and Afghanistan and expanding also to the advanced services.
MTN Nigeria Enterprise Business
Turning to enterprise. So enterprise, this is really a segment view. It’s a slightly different disclosure to the other categories because the pieces of enterprise are in also voice and data and digital, just remember that. But if we take a segment view of enterprise, you see a growth rate of 6.8%. Remember that we are still in the process of delivering the turnaround of the South African enterprise business. And if I was to set that aside for the moment, enterprise across the rest of the portfolio grew by more than 20%, and a lot of that growth is driven in MTN Nigeria. South Africa, as I said, is improving. We’re working a lot on our SME channel strategy. Remember, an enterprise that’s about 2/3 of the revenue pool is actually from small and medium-sized enterprises. And then we have to implement not only a direct channel but also an indirect channel.
And finally, another big part of what we are doing is we are expanding with the fintech business also for enterprise solutions, so allowing enterprise customers, merchants, retailers to accept mobile money, allowing enterprise customers to push business to person payments. So we’ve launched that already in 3 of our markets.
If we turn to Nigeria. I think a really strong performance by Ferdie and the team there, particularly subscriber growth. So that’s 3.3 million net adds in H1. So the base up now at 61.5 million. Good growth in active data subscribers to 20,7, pushing out on the network as well. We have 4G coverage in 39 cities. In the half, we finally got approval to use the 800 spectrum that we acquired a few years ago.