MTN unveils its first OTT service and roadmap for digital fortunes

MTN has announced the acquisition of music streaming platform Simfy at AfricaCom and outlined the future of the telco, which doesn’t look very much like a telco anymore.

This is of course a slightly unfair statement, as the mission of connecting the unconnected millions across Africa will continue to be a top priority for the business, though CEO Rob Shuter highlighted the team have much bigger ambitions when it comes to maintaining relevance in the digital economy. The Simfy acquisition is just one step in the quest to morph MTN into a digital services business.

Speaking during the keynote sessions at AfricaCom, Shuter highlighted there are still major challenges when it comes to connectivity in Africa, though telcos need to look deeper into how these challenges can be solved. The most simple roadblock is a lack of connectivity across the continent, but when networks are being deployed, telcos need to understand how consumers are engaging with the connected world. A good place to look first and foremost is China.

“Our mission is not just about connecting people, but understanding what the users want to use the internet for, so we can build networks properly,” said Shuter. “When we look at China today, that will be Africa in the next two to three years.”

Looking at how consumers use connectivity in China starts to paint a picture. Media takes up 17% of time of devices, while communications and social media takes up 33%. Shopping and payments account for 16%, and gaming takes up 11%. For MTN to be relevant in the future, Shuter has ambitions to create a presence in each of these segments.

To capitalise on payments and shopping, the mobile money offering will be revamped and launched in South Africa during Q1 2019. Nigeria has also just changed its regulatory regime when it comes to mobile money, and Shuter said the team would be applying for a payments service license over the next month, with plans to launch a mobile money offering in Q2 2019. This is a big moment for MTN, as while the mobile money offering has been present for some time, this is the first venture into its two largest markets.

For Shuter, creating a digital services company has two components. Using connectivity as a platform, a comprehensive partnerships programme has been launched in four main verticals (communications, rich media services, mobile financial services and eCommerce) with the team working with various established players in the ecosystem, but MTN also have to push itself further up the value chain and offer its own competitive products. This is where Simfy fits in.

As a music subscription product, customers will be able to merge both connectivity and music payments onto the same bill, but Simfy will not be incorporated into the greater MTN business from an operational perspective. Simfy will continue to operate a separate entity, allowing it to maintain the OTT environment. Shuter highlighted he would not want the corporate and operational structure of a telco, completely unsuited to the OTT landscape, to impact Simfy’s operations.

On the financial services side, the team will make use of MTN’s scale to establish a more prominent footprint. With a user base of 24 million already, this number seems to be doubling every 18 months. The significantly larger mobile subscription base can be used to springboard the mobile money business north, as Shuter highlighted the distribution network is key. When customers come to top-up their airtime or data allowance, they can also deposit cash into digital wallets. It is convergence at its finest, though leaning on Orange’s ambitions to diversify out of the traditional telco playground.

There are still huge challenges from a connectivity perspective across the African continent, but MTN seems to recognise there is more to be excited about than simply collecting subscriptions. If the Simfy acquisition is to be taken as evidence of MTN’s future roadmap, this looks like it could be a case of convergence done right, not allowing the cumbersome, archaic telco machine to muddy the OTT waters.

Ericsson and MTN claim African 5G first

Ericsson has teamed up with operator MTN to undertake what they claim is the first 5G technology and applications trial in Africa.

The main aim seems to be to find useful things to do with 5G in a continent where many countries would be grateful for a decent level of 4G penetration. This project has been in the pipeline for some time, with the two companies even going so far as to demonstrate their mutual commitment via the signing of an MoU at AfricaCom 2017.

Of course it wouldn’t be a 5G trial without some nice, juicy metrics, so strap yourself in and get ready for a data deluge. The 5G prototype radio trial achieved a throughput of no less than 20 Gbps and a latency of 5 ms. How do you like them apples? MTN has been looking into a bunch of 5G use cases and applications for the digital transformation of industries such as mining, transportation, agriculture, manufacturing, and utilities.

“Ericsson is the first to launch a 5G trial with MTN in Africa, supporting our strategy of delivering next-generation mobile broadband, cloud as well as providing support for massive Internet of Things deployment,” said Mahomed Essof, Country Manager, South Africa for Ericsson.

“With 5G, remote healthcare through connected robots could offer world-class surgery in the most remote parts of the continent and the world,” said Giovanni Chiarelli CTIO for MTN South Africa. “Self-driving cars could change the face of road safety, along with smart agriculture, smart mining and smart cities.

“There is no doubt that 5G will offer the consumer higher speeds and lower latencies but to achieve this, we need the capacity that comes with additional spectrum thus once again we call on the government to urgently release the much-needed spectrum that is required in South Africa, to lower the cost of data and drive growth and development for all South Africans.”

MTN releases mixed bag for quarterlies

South Africa-based telco MTN has released its quarterly figures, and while it is not a complete disaster, things could certainly have gone better.

Total subscribers were down across the group by 0.7%, group total revenues and group service revenue reduced by 13.4% and 14% respectively, which has been blamed on fluctuations in currency exchange rates. On a constant currency basis, revenues were up quite considerably, but such an argument always reminds us of the humorous phrase ‘if my grandma had wheels, she would be a motorcycle’. So what? It did change, and you made less money. Of course, it is only an indication of immediate problems which are uncontrollable, but it is a useful bit of PR spin nonetheless.

But it doesn’t all have to be about the bad news.

“The group continued to make steady progress in implementing our Bright strategy with a strong focus on operational execution across the group,” said MTN Group president and CEO, Rob Shuter.

“Our key growth drivers of data and digital services performed well with revenue growth of 31.4% and 19.6% respectively. In the quarter, we have accelerated our network investment programme, rolling out 1 641 3G and 2 102 4G sites (including co-located sites), supporting the demand for data services. In South Africa and Nigeria the network investments are showing encouraging improvements in network quality and NPS.”

The Bright strategy is MTN’s supposed road to redemption. With a focus on digital and data services, MTN is trying to find itself and reposition the troubled brand across the African continent. One area which is a primary focus is the mobile money side of the business, a shining light of success attempting to break through the gloom. Active MTN Mobile Money customers increased sequentially by 10.6% to 19.8 million.

It’s also a plan to boost employees morale in an effort to provide a better experience for customers. And they certainly do need a boost. In March, the team reported the first annual loss for 20 years, and that isn’t even taking into account the substantial fine imposed by the Nigerian government for failing to disconnect over 5 million unregistered SIM cards in the country.

MTN hasn’t completely left its troubles in the past, but there does seem to be some positives to take out of the quarter. Just look a bit closer.

Ericsson, Qualcomm and MTN say Cat-M1 is the dog’s

Ericsson and Qualcomm have successfully paired up with MTN South Africa, to complete a lab trial for a Cat-M1 solution focused on MTN’s IoT ambitions.

The trio, claim the trial was a success and the first Cat-M1 test implementation to take place on the continent. The trials will continue in the operators Test Bed lab, as the team look for opportunities to reduce complexity, lower power consumption, expand coverage, and increase device density.

But why you ask? Good question, and luckily enough, the trio have decided to give us some fantastic use cases for the IoT world:

  • Smart watches or fitness bands with integrated voice communications services
  • Vehicle tracking with emergency calling support
  • Point of sale terminals
  • Pet tracking devices

Because, keeping tabs on Fido is a massive fueller for IoT growth didn’t you know.

“Cat-M1 provides key advantages of low-cost devices, long battery life, extended coverage and supports a wide range of use cases,” said Giovanni Chiarelli, CTIO of MTN South Africa.

“The successful trial, in conjunction with Ericsson and Qualcomm Technologies, proves that both companies have the ability to support new IoT services and technologies for MTN. The initial use of this technology has been for tracking and reporting use cases that have benefited both consumer and business customers. At MTN we are providing the platform for these and future applications to enhance people’s lives.”

Perhaps another question which should be asked it why bother? Smart watches, fitness bands, vehicle tracking and point of sale terminals all work with today’s technology. It is a stepping stone towards the IoT world, and perhaps it does offer some benefit for the South African environment, though it is not immediately obvious what additional support this technology is offering which is a clear improvement on today’s infrastructure.

“Today, the majority of telco IoT revenue comes from machine-to-machine connectivity, but in the next five years, this will change to revenue from platforms, applications and services,” said Rafiah Ibrahim, President, Ericsson Middle East and Africa. “This trial ensures MTN South Africa will capture new revenue streams and deliver the best experience to its customers.”

The test itself made use of IoT devices with a Qualcomm MDM9206 global multimode LTE IoT modem and the Ericsson Massive IoT Radio Access Network products.