Telecoms | TechCabal https://techcabal.com/category/telecoms/ Leading Africa’s Tech Conversation Wed, 04 Sep 2024 16:41:28 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 https://techcabal.com/wp-content/uploads/tc/2018/10/cropped-tcbig-32x32.png Telecoms | TechCabal https://techcabal.com/category/telecoms/ 32 32 Airtel Nigeria’s subsidiary secures three licences to open new revenue streams https://techcabal.com/2024/09/04/airtel-nigeria-secures-licences/ https://techcabal.com/2024/09/04/airtel-nigeria-secures-licences/#respond Wed, 04 Sep 2024 15:42:43 +0000 https://techcabal.com/?p=142278 Airtel Nigeria, the country’s second-largest mobile network operator, has secured three telecom licences from the Nigerian Communications Commission (NCC) as it looks to unlock new revenue streams.

The licences include an Internet Service Provider (ISP) license, a National Long Distance license, and a Sales and Installation Major license. All three licences were awarded to Airtel Nigeria Telesonic Limited, a subsidiary of Airtel. 

While Airtel Nigeria could have operated in the ISP market using its Unified Access Service Licence (UASL), securing a standalone ISP license appears to be a strategic move to bolster its dwindling revenue in the Nigerian market–Airtel Africa reported a $13 million loss in H1 2024. 

The National Long Distance license, valid for 20 years, will allow Airtel Africa to provide telecommunication service over a long distance network – MTN already got into the business through its subsidiary Bayobab. The Sales and Installation license, valid for five years, permits the subsidiary to sell, install, and maintain telecommunications infrastructure.

Although Airtel Nigeria Telesonic Limited was incorporated on August 26, 2022, and launched on February 13, 2024, it has not officially begun operations. One person familiar with the matter said internal processes, including mapping the size of the investment and the logistics needed, must be completed before operations begin.

“Getting the licences is like a bank launching a fintech subsidiary,” said a telecom executive who asked not to be named. 

“By keeping it separate, Airtel Nigeria can act as a wholesale supplier to Telesonic, which holds the ISP license. This arrangement allows Airtel to report revenue as a wholesale supplier, while Telesonic reports the bandwidth costs, effectively reducing their tax liabilities by lowering gross profits.”

Airtel Nigeria did not respond to a request for comments. 

Airtel Nigeria is the latest entrant into the competitive ISP market. Competitors like MTN Nigeria and Globacom have made significant inroads since launching their ISPs in 2022 and 2024, respectively. The market is dominated by players like Spectranet, FiberOne, and Starlink. Airtel’s move could invigorate a market that has seen numerous exits due to the harsh operating environment driven by inflation and FX volatility.

However, this expansion may be constrained by its cost-reduction measures. The company is reportedly renegotiating contracts with tower companies to reduce its foreign exchange exposure, suggesting that it may not have substantial funds to invest in its new subsidiary.

“All mobile network operators are increasingly focusing on last-mile services because they offer higher profitability,” a CEO of an ISP company who asked to remain anonymous to speak freely told TechCabal. 

“Take voice services, for example—the interconnect rate is still ₦7 per minute, a rate set around 20 years ago. Consider what the dollar and diesel prices were back then, which are essential for powering their base stations. This is the rate MTN Nigeria pays them per minute for calls that MTN routes through their network.”

Airtel Nigeria’s move to enter the ISP market, though belated, could potentially shake up the sector which has shrunk over the past year with many operators shutting down due to high inflation and foreign exchange crisis in the country. However, to make a dent in the market it needs to grow the current size of the ISP market which stands at 262,207 active subscribers with an average revenue per user (ARPU) of ₦10,000 to ₦15,000. 

]]>
https://techcabal.com/2024/09/04/airtel-nigeria-secures-licences/feed/ 0
586% tax increase for telcos threatens Nigeria’s drive to provide high-speed internet https://techcabal.com/2024/08/30/telcos-tax-increase-internet/ https://techcabal.com/2024/08/30/telcos-tax-increase-internet/#respond Fri, 30 Aug 2024 14:30:41 +0000 https://techcabal.com/?p=141981 In the first half of 2024, MTN Nigeria, the country’s biggest mobile network operator, paid ₦232 billion in taxes—an astonishing 586% increase from the same period last year. It paid 54 separate taxes in 2024 alone across various federal, state, and local government agencies.

The tax burden on telcos like MTN Nigeria will rise further by the end of 2024 as the number of taxes continues to grow. According to the Association of Licensed Telecommunication Operators of Nigeria (ALTON), state governments collect the majority of these taxes.  

These taxes include building permits, sewage fees, convulsion levies, storage licenses, and more. Gbenga Adebayo, ALTON’s President, told TechCabal that these taxes increased operational costs of telcos by 50% in 2024. 

Some taxes are statutory, but others are imposed arbitrarily. For instance, the newly formed National Association of Telecom Landlords in Bayelsa has imposed levies not recognized by state law. While federal taxes are mostly legally grounded and number less than 20, state and local taxes include a mix of legally-backed and arbitrary levies.

“The multiple taxes are driven primarily by revenue,” Adebayo said. “There is a perception that the telecoms industry is highly profitable and so can be treated as a cash cow.”

MTN Nigeria did not immediately respond to requests for comments. 

The current tax environment threatens the expansion of broadband infrastructure, which is crucial for integrating millions of Nigerians into the digital economy. As of December 2023, 27.91 million people in 97 communities still have no reliable high-speed internet, according to data from the Nigerian Communications Commission (NCC). In states like Niger, there is no high-speed internet.

One major issue is the inconsistency in right-of-way fees, which allow telcos to lay fiber optic cables on state-owned land. Most federal government agencies charge ₦145 for fiber laying on highways, while the Nigerian Inland Waterways Agency (NIWA) charges ₦2,500 per linear square meter for laying fiber along waterways and bridges. 

State charges vary widely, from Kwara’s ₦1 per kilometer to as much as ₦9,000 in Oyo State.

States like Osun, Lagos, Cross River, and Abuja have invested in fiber ducts that protect cables and lease these ducts to operators. However, the requirement to charge separate fees for the lease and right of way make this arrangement more expensive. Operators like MTN, Airtel, and Globacom use these ducts but still face high costs. 

“States have limited revenue sources, so they continually squeeze telcos,” Manish Kochhar, a former chief technology officer at Globacom, told TechCabal. He added that even after paying lease or RoW charges, states frequently fail to protect the cables from damage caused by construction projects. This results in degraded cable quality and poor connection across Nigeria.

The Presidential Fiscal Policy and Tax Reforms Committee, established in 2023, promised to review and harmonize these taxes. However, there has been no update on their progress regarding telecom taxes. 

Taiwo Oyedele, the committee’s chairman, did not respond to requests for comments.

Some telecom operators are taking matters into their own hands by negotiating directly with states, according to two people familiar with the matter. In 2023, Lagos State granted MTN Nigeria a right-of-way waiver in exchange for free high-speed internet in public institutions. Edo State offered a waiver and tax incentives to operators that engaged with it.

During a telecom stakeholder meeting organised by the Association of Telecommunication Operators of Nigeria (ATCON), State ICT commissioners in Niger, Kogi, and Cross River suggested that telecom operators need to engage more actively with them to resolve these issues.

There is a concern that engaging individually is not a sustainable solution as it gives bigger operators the opportunity to negotiate juicy deals over smaller operators.

Get Moonshot tickets 20% off with the code MSVIP. Offer valid till 5th SeptemberHere is the link.

Telcos.
]]>
https://techcabal.com/2024/08/30/telcos-tax-increase-internet/feed/ 0
Safaricom can push for restrictions on satellite ISPs, says communications regulator https://techcabal.com/2024/08/27/safaricom-communications-regulator/ https://techcabal.com/2024/08/27/safaricom-communications-regulator/#respond Tue, 27 Aug 2024 11:43:51 +0000 https://techcabal.com/?p=141719 The Communications Authority of Kenya (CA) has said Safaricom was right to raise concerns about the licensing of independent satellite providers including Starlink. 

“Licensees or service providers are at liberty to raise any issue in the market with the ICT regulator,” CA told TechCabal.

On July 15, Safaricom asked the regulator to block satellite ISPs with operations in other countries, a move that could lock out Starlink which is the biggest satellite internet provider in Kenya. The Elon Musk-owned company relies on resellers to distribute its kits and install the service.

CA will now investigate and address Safaricom’s concerns, even as telco experts warn that the telco’s move could reverse gains Kenya has made in increasing internet access and reducing data costs.

Safaricom also alleged security risks to the country if the companies are allowed to operate without a physical presence or partnerships with local firms. It said licensing such companies “would mean negligible control for the government to ensure accountability for any non-compliance issues.”

“The authority independently examines such issues within its mandate and regulatory framework and responds appropriately. It is a normal practice as the Authority seeks to facilitate the development of the dynamic and rapidly evolving ICT sector,” CA said.

Safaricom did not immediately respond to a request for comments.

Safaricom dominates Kenya’s data market with a 36.7% market share, followed by Jamii Telecommunications and Wananchi Group at 23.2% and 22.7% respectively. It has laid 14,000km of fiber optic cables, connecting over 400,000 subscribers.

Starlink’s expansion, which offers faster speeds and relatively lower prices, could slow Safaricom’s data business growth. In 2023, the company’s mobile money service M-Pesa and data services pushed it to the first profit in three years.

Safaricom’s data revenue rose 18% to $1.4 billion, as call revenues shrank 0.6% to $608.4 million–continuing a trend observed in recent years.

Starlink’s new satellite updates could further upset local telcos’ call and messaging services if allowed to continue operating in Kenya. The satellite ISP announced on Monday that its upgrades will now bring call services, allowing users to bypass local providers.   

Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!

]]>
https://techcabal.com/2024/08/27/safaricom-communications-regulator/feed/ 0
Inside Osun state government’s complex ₦945 million right-of-way dispute with MTN https://techcabal.com/2024/08/21/osun-mtn-right-of-way/ https://techcabal.com/2024/08/21/osun-mtn-right-of-way/#respond Wed, 21 Aug 2024 14:08:14 +0000 https://techcabal.com/?p=141306 On Friday, a dispute over right-of-way fees between MTN Nigeria and the Osun state government hogged the headlines. The Osun State government claimed MTN owes ₦945 million in right-of-way fees—payment for laying high-speed internet cables

That demand was based on a calculation of ₦3,500 per linear meter (the maximum fee applicable) of fiber-optic cable laid. The government also imposed a ₦100 million fine. 

MTN’s letter to Osun State, published by several publications, provides a glimpse into what appeared to be a shakedown. Several people with direct knowledge of the matter say the dispute, which the telecoms regulator is now mediating, is more nuanced.

Five people with direct knowledge of the matter say the government’s demands are rooted in the belief that MTN Nigeria and O’odua Infraco Resources Limited acted in bad faith in a complex web of partnerships that began in 2022. 

A September 2022 agreement between O’odua Infraco Resources Limited and MTN is at the heart of the dispute. The agreement gave MTN an “indefeasible right of use” to lease O’odua’s fibre ducts—protective housing that prevents vandalism and wear and tear—to lay fibre optic cables. As part of that agreement, MTN paid O’odua right-of-way fees. 

The government contends that O’odua was not authorised to collect fees on its behalf. It also argues that it was not a party to the agreement between MTN and O’odua and is not bound by it. 

“In addition to clause 6.13, the Service Provider (O’odua) shall also provide a no-objection letter from the Federal Ministry of Works and Housing and the relevant state authorities stating it is not opposed to its entry into this agreement with MTN,” read an excerpt from an advance copy of a press statement citing portions of the agreement seen by TechCabal. 

Three people familiar with the government’s position said the fees paid by MTN represent ₦650 per linear meter, less than half the minimum ₦1,300 Osun state charges. They also claimed the government never received those payments. 

“The agreement purportedly executed between O’odua Infraco and MTN on 22nd September 2022 far predated the existence of any purported contract for Right of Way between the Osun State government and O’odua Infraco, which was purportedly executed on 6th March 2023,” said an advance copy of an Osun state government press statement seen by TechCabal. 

MTN did not respond to a request for comments.

O’odua Infraco did not immediately respond to a request for comments.

Osun state and right-of-way fees

The press release references Osun State’s decision to cancel right-of-way fees in March 2023. At least two government officials who asked not to be named as they were not authorised to speak on the matter claimed the 2023 cancellation was based on promises by telcos and infrastructure providers to provide internet to underserved areas. They claim infrastructure providers reneged on the agreement. 

Right-of-way fees, an important source of revenue for struggling states, are cited as one reason telcos have struggled to provide high-speed internet nationwide. While the Federal Government recommended that states charge ₦145 per linear meter, that recommendation has been difficult to enforce. 

Some governments believe telcos should consider the fees as a necessary cost of doing business, arguing that many telcos will not lay fibre-optic cables outside of commercial areas.  

MTN, which has suffered from the naira devaluation and record inflation in Nigeria, will be reluctant to pay these steep fees. Yet the government’s position seems to be informed by the idea that there’s no point in canceling right-of-way fees if telcos will simply pay them to third parties anyway.

]]>
https://techcabal.com/2024/08/21/osun-mtn-right-of-way/feed/ 0
Mass disconnection of MTN SIM cards linked to incomplete or mismatched NIN registration https://techcabal.com/2024/07/29/mtn-blocks-sim/ https://techcabal.com/2024/07/29/mtn-blocks-sim/#respond Mon, 29 Jul 2024 08:45:13 +0000 https://techcabal.com/?p=139137 On Sunday, MTN Nigeria, the country’s largest telco, barred the lines of thousands of subscribers yet to link their National Identification Number (NIN) three days before a July 31, 2024 deadline set by the Nigerian Communications Commission (NCC).

MTN began blocking non-compliant SIMs in December 2023, said two people with knowledge of the matter. However, several MTN users claimed that their SIMs were blocked on Sunday despite linking their NINs. 

“I submitted my NIN twice, but my SIM was blocked without prior notice. I have been using this number for over ten years. Where do I start from?” one person told TechCabal. One person with direct knowledge of the situation said possible reasons could include incomplete NIN registration or a mismatch with SIM registration details. 

“The name on the SIM registration is different from the one on the NIN. So I need to go and update it,” one MTN customer said, confirming that the telco sent multiple notifications before blocking her number.

A spokesperson for MTN did not immediately respond to a request for comments. 

The disconnection comes as Nigerian regulators pressure telcos to implement the NIN-linkage policy introduced in December 2020. In February 2024, the Nigerian Communications Commission (NCC) told telcos to bar subscribers who failed to link their phone numbers to their NIN on or before February 28, 2024. The deadline was extended to April 15, 2024, and later July 31, 2024. 

Telco operators have now shared easy steps for affected customers to unblock their lines.

Airtel customers are expected to dial *121# and input their eleven digit NIN number. For Glo, the code is *109*NIN number#. MTN users should visit nin.mtn.ng to check the NIN status and link it if not already linked, while Smile customers should send their valid NIN to customercare@smile.com.ng or call 07020444444. Spectranet customers should call toll free line 8002345678 and submit NIN but will have to get your KYC done at a Spectranet store, and Ntel customers should visit any Ntel store with their NIN to update their lines.

Gbenga Adebayo, President of the Association of Licensed Telecoms Operators of Nigeria (ALTON), responded to insinuations that the SIM bans were linked to the call for protest, saying the telcos were not deliberately barring lines. 

“If there is anything, it is the mismatch in NIN- SIM registration and customers who have received messages from operators to come and register and link their SIMs. It is just coincidental it is coming at this point,” he told TechCabal.

In March 2024, MTN Nigeria CEO Karl Toriola said the company barred 8.6 million subscribers in compliance with the NCC directive. Many of these lines were reactivated leading to a reduction of 2 million in total subscribers for Q1 2024. 

“We have 8.9 million subscribers going through the verification process, and these subscribers fall within the cohort of less than five SIMs linked to an unverified NIN,” Toriola said. 

Editor’s note: This article has been updated with measures to unblock barred lines.

]]>
https://techcabal.com/2024/07/29/mtn-blocks-sim/feed/ 0
Hit by steep operating costs, Nigerian internet service providers gasp for air https://techcabal.com/2024/07/25/hit-by-steep-operating-costs-nigerian-internet-service-providers-gasp-for-air/ https://techcabal.com/2024/07/25/hit-by-steep-operating-costs-nigerian-internet-service-providers-gasp-for-air/#respond Thu, 25 Jul 2024 15:20:03 +0000 https://techcabal.com/?p=138980 As of April 2023, Nigeria had 258 internet service providers (ISPs) and the industry’s regulator, the Nigerian Communications Commission (NCC), was looking to issue more licences to new operators to drive 70% internet penetration by 2025. One year later, the number of operators is shrinking; 12 companies have failed to renew their five-year licences on expiry in June, and more are likely to leave the market when their licence expires, as per four telecom experts. 

Among the 242 ISPs left in Nigeria, only 106 are operational, according to NCC data for the first quarter. These 106 active ISPs serve a total of 262,206 subscribers, less than 3% of the total internet market. The largest ISP, Spectranet, has over 43% of the total industry subscribers with 113,869 subscribers.

TechCabal found that 22 ISPs have licences that will expire this year. A company like InterWeb Satcom Limited, founded by Nigerian senator Monday Okpebholo, is no longer active online; its licence will expire at the end of July

“The smallholders are all likely to just fizzle out one by one. The mid-sized may try merger if there is a regulatory environment change to offer protection from the MNO‘s onslaught on predatory pricing. This may encourage investors to promote mergers and infuse more capital. Else, they may soon start to die off the way of the smallholders,” Biodun Omoniyi, CEO of VDT Communications, told TechCabal.  

ISPs which act as bridges between homes, businesses, institutions, and the internet, provide the infrastructure necessary for users to access websites, communicate, and consume media and entertainment, are grappling with multiple challenges including energy costs which shot up more than 250% in the past year. The energy cost affected facilities and colocation costs which grew to 200%, according to Omoniyi. 

The capital expenditure (equipment spending) of local ISPs went up more than 200% in the past year due to foreign exchange increases. The companies are also battling with increased staff costs as a result of a growing wave of workers relocating abroad and creating gaps that take ISP companies a longer time and more money to fill, according to Temitope Osunrinde, a telecom expert and vice president at Tizeti, an internet provider. Other challenges include inflation and a declining market value due to increased competition. 

The ISP market is divided into three broad segments, including the mobile network operators (MNOs) and multinationals; the mid-tier broadband companies that offer fixed broadband comprising wireless and fibre optics operators; and the small-holder operators.

“ISPs need an ISP licence. If they have the equipment they are selling and installing, they also need a Sales and Installation licence,” an NCC spokesperson said. An ISP licence costs ₦500,000.

The four MNOs MTN Nigeria, Airtel, Globacom, and 9mobile lead the internet market in Nigeria. However, because of their UASL licence which allows them to operate voice and other services, the MNOs are often not described as ISPs because they are mobile-dependent. 

“ISP”, the term, is loosely used for mid-tier fixed broadband companies and smaller operators whose internet service licence only permits them to provide internet services. The companies include Spectranet, FiberOne, Tizeti, MainOne, iPNX, VDT Communications, Starlink, and many others. 

Internet Service Providers earn income from the purchase of large and redundant internet connections. They resell these as smaller connections to consumers and businesses. ISPs usually have a fixed price for providing a certain speed and bandwidth amount. They can also offer multiple pricing tiers depending on how fast a connection you want and how much bandwidth you want to use over a month. 

The problem with this revenue model is the competitive advantage it gives the MNOs who make money off the ISPs from the sale of redundant internet connections as well as the income they make from selling the internet directly to consumers.  

Competition from telcos and new players like Starlink and the West Indian Ocean Cable Company (WIOCC) appear to have sealed the fate of many local internet providers. 

“The entry of major players like Starlink, WIOCC, Glo, and MTN introduces intense competition. These companies have significant resources, broader networks, and the ability to offer competitive pricing due to economies of scale,” Manish Kochhar, former head of fibre networks at Globacom, told TechCabal. 

Starlink, which began operations in 2023 in Nigeria, did not waste time to become the fourth-largest operator in the ISP market before the end of that year. It climbed to third-largest ISP with 23,897 subscribers in May 2024. Starlink could claim more market share by collaborating with telcos, Kochhar said. 

MTN Nigeria and Globacom have also been involved in the ISP market with the deployment of Fibre To The Home (FTTN both serving 7,641 and 2681 subscribers respectively. 

Biodun Omoniyi recommends protection of the mid-tier and smaller operators from “predatory” pricing. 

“Strict nationalisation of service pricing to consumers is another dynamic cost-reflective pricing that allows operators to adjust in weeks and not years, which would also help,” Omoniyi said. 

]]>
https://techcabal.com/2024/07/25/hit-by-steep-operating-costs-nigerian-internet-service-providers-gasp-for-air/feed/ 0
Airtel Africa reports $31 million in Q1 2024 profit, but macroeconomic headwinds persist in key market https://techcabal.com/2024/07/25/airtel-africa-reports-31-million-in-q1-2024/ https://techcabal.com/2024/07/25/airtel-africa-reports-31-million-in-q1-2024/#respond Thu, 25 Jul 2024 11:13:09 +0000 https://techcabal.com/?p=138959 After a difficult 2023 in which losses mounted after currency devaluation in some of its key markets, Airtel Africa returned to the blue in the first quarter of 2024. The telecoms firm, which operates in 14 African countries, reported $31 million in profit after tax, compared to a loss of $151 million in Q1 2023.

Still, macroeconomic headwinds persist. The company’s revenue declined 16.1% to $1.15 billion due to currency devaluation and rising fuel costs in Nigeria. The telco will work on cost reduction and energy-saving initiatives to reduce network costs. 

 Key takeaways:

  • Airtel Africa reported revenue of $1.15 billion for the quarter ended 30 June 2024
  • It gained $31 million in profits, up 120% 
  • Mobile money customers grew 14.9% to 39.5 million

Its strong bottom line was driven by data and mobile money services revenue, which increased Average Revenue per User (ARPU). Data customers grew 13.4% to 64.4 million, while mobile money users in the telco’s East, Central, and West Africa segments increased to 39 million.  

Data revenue grew to $409 million, and voice revenue to $476 million. Mobile money revenue grew to $22 million,  with a continued strong performance in East Africa of 31.7% and Francophone Africa of 18.4%.

Airtel’s customer base grew to 155.4 million as the company continued its investment in data by laying over 5,600 km of fibre cables.

The company’s share price is down 10% in pre-market trading, hours ahead of its Q1 earnings call on Thursday.

“A key priority for us is to look for new opportunities to further grow our business, especially in the enterprise, fibre and data centre businesses across our footprint in Africa,” said new CEO Sunil Taldar, who succeeded Olusegun Ogunsanya in June 2024.

In March 2024, the telco began work on a data center that will be live by Q1 2026.

]]>
https://techcabal.com/2024/07/25/airtel-africa-reports-31-million-in-q1-2024/feed/ 0
Inside MTN’s race to become a “techCo” https://techcabal.com/2024/07/04/inside-mtn-race-to-become-a-techco/ https://techcabal.com/2024/07/04/inside-mtn-race-to-become-a-techco/#respond Thu, 04 Jul 2024 16:32:23 +0000 https://techcabal.com/?p=137057 After years of multi-billion fines, regulatory uncertainties, and economic volatility MTN is embarking on a new adventure outside of its core business: – telecommunications.

“We are moving from a telecom company to a techCo (technology company)’” Joshua Chijioke Henry, head of business development, for Chenosis a big data company by MTN, told TechCabal. 

That sentence has become a song every executive in MTN knows by heart. It has also spurred the company’s increasing focus on the growth of its existing verticals such as MoMo, a fintech unit valued at over $5 billion; Ayoba, a chat platform rivaling WhatsApp that will soon be turned into a super app; and Bayobab, a fibre-cable-facing unit. 

The transition is inevitable for the company whose growth in the telecom industry in Nigeria, its largest market on the continent by subscriber count, seems to have reached a stage where it is no longer growing at a fast pace and is starting to decline.  

The company’s subscriber base has struggled with growth since it reached a peak of 92.7 million subscribers in February 2023. The latest report by the Nigerian Communications Commission (NCC) shows that the telco’s subscriber count dropped to  81.7 million in March 2024.

MTN’s revenue has also been pummelled by financial headwinds in Nigeria where 28-year-high inflation has subscribers making unplanned survival choices while the cost of business operations hit an all-time high. Several startups have closed shop and many foreign nationals have packed up and left the country. 

However, the burden of making MTN’s ambition to become a tech company a reality mostly rests on Chenosis, a startup MTN launched in Nigeria in September 2023 as a marketplace where developers within the continent can build technology solutions and infrastructures, and APIs without spending dollars on foreign alternatives. 

Beyond the marketplace, the primary responsibility of Chenosis is to harness the massive data MTN has accumulated over 25 years of doing telecom business in Africa and build innovations by analysing the data. 

MTN houses the data of about 300 million active subscribers across the African continent which includes 80 million active users in Nigeria who make calls, send SMS, browse, do airtime, and MoMo transactions. Chenosis studies the data points to identify behavioural patterns which could spur a new company or new line of products from the MTN family.

“Chenosis was born out of the strategy to build the largest data platform within the continent,” Joshua Chijioke Henry said. 

Although it is less than one year in the market, Chenosis has key products like APIs, the low-code and no-code platforms that allow companies to design and develop apps using intuitive drag-and-drop tools that reduce or eliminate the need for traditional developers who write codes. There are two categories of APIs on Chenosis including MTN’s API and third-party APIs which allows companies to integrate their API with MTN’s open API. MultiChoice, a satellite television service provider, currently consumes a third-party API solution on the platform. There is also a partnership with Impression AI where Chenosis gives technology businesses the ability to get signature of customers using USSD codes.

While Chenosis is not thinking of building a generative AI tool with the trove of data at its disposal, according to Henry, there are many other activities it is using the big data MTN has to do. One of them is credit scoring for the financially excluded. How it does this is to study their spending pattern, especially with airtime, since most of them use feature phones. 

“MTN can capture certain things about the customer like where they live, how much airtime they purchase, we know whether people bought airtime for the customer or the customer is the one doing the buying, with that data we can say for sure what her credit score would look like,” he said. 

Karl Toriola, the company’s CEO in Nigeria, is the champion of the techCo transition and is pulling all the stops to ensure that the vision is achieved.  

During an interview with Tomiwa Aladekomo, CEO of TechCabal on Arise TV in February, Toriola explained that to transform the company from a telco to a technology or digital company takes “a total transformation in DNA.”. 

“It is a huge transformation in terms of the personality of MTN. When a company is large and successful, the primary focus for shareholders and people who govern those businesses is protecting that revenue base. At times you transform yourself so radically you almost have to destroy your old identity and recreate a new one,” Toriola said.  

While Chenosis is up its neck in data, MTN also has another unit called the MTN Group Tech, which is specifically focused on exploring opportunities in artificial intelligence. 

The companies that will be born from the transition will be funded by MTN. Nevertheless, MTN acknowledges that external funding is required if the transition project is to scale. Currently, MTN’s telecom business doesn’t make enough money to support its ambitious growth plans. 

“It is one step at a time,” Henry said, indicating the company would address the issue of additional funding when it gets there.

]]>
https://techcabal.com/2024/07/04/inside-mtn-race-to-become-a-techco/feed/ 0
Airtel Africa cuts debt, lowers costs through share buyback from Citigroup https://techcabal.com/2024/04/11/airtel-buys-back-8-6m-shares-from-citigroup/ https://techcabal.com/2024/04/11/airtel-buys-back-8-6m-shares-from-citigroup/#respond Thu, 11 Apr 2024 11:33:55 +0000 https://techcabal.com/?p=132027 Airtel Africa has bought back 8.6 million ordinary shares from Citigroup Global Markets Limited as part of a share buyback plan that began in February 2024. 

The second largest mobile network operator in Nigeria said the programme’s primary objective was to reduce share capital which in turn cuts down Airtel’s debt obligations and cost of operations which has grown in recent times. 

Segun Ogunsanya, CEO of Airtel Africa, claims Airtel’s businesses have generated significant cash hence the decision of the board to launch a share buy-back programme. 

[ad]

“The board believes that repurchasing its shares is an attractive use of its capital in light of the Group’s strong long-term growth outlook,” said Segun Ogunsanya, CEO of Airtel Africa. 

The buy-back programme kicked off on March 1, 2024, and involves the repurchase of $100 million worth of the company’s shares in 12 months. 

The programme is divided into two tranches with the first tranche worth $50 million running for a period of 7 months – from March to August 2024.

The latest transaction between Airtel and Citigroup involves the repurchase of 487,985 ordinary shares at a weighted average price of £103.94 ($131.70) per share. 

Airtel Africa has struggled to stay profitable due to macroeconomic challenges in Nigeria, its largest market on the continent. The company’s financial statement showed revenue dropped by 21.96% to $1.24 billion in December 2023, from $1.59 billion due to the fall of the naira affecting Airtel’s conversion rates. Airtel recently took steps to reduce its high operating costs like outsourcing most of its tower operations to IHS Towers. The buy-back programme also helps the company reduce its debt obligations as it seeks other ways to maintain profitability. 

]]>
https://techcabal.com/2024/04/11/airtel-buys-back-8-6m-shares-from-citigroup/feed/ 0
Somalia plugs 5G into its economic rebound https://techcabal.com/2024/04/03/somalia-plugs-5g-into-its-economic-rebound/ https://techcabal.com/2024/04/03/somalia-plugs-5g-into-its-economic-rebound/#respond Wed, 03 Apr 2024 09:49:15 +0000 https://techcabal.com/?p=131678 Somalia has received its first 5G installation, cranking up a series of reforms to revamp its economy after joining the East Africa Community (EAC).

Hormuud Telecom Somalia Inc., its largest telco, rolled out faster internet speeds last month, signalling budding growth in the country’s digital services industry.

“As Somalia strides towards stability, the launch of 5G services by Hormuud Telecom emerges as a critical milestone. This initiative is more than just a technological advancement, it’s a symbol of our nation’s commitment to growth and constant improvement,” said Somalia’s Telecommunications Minister Jama Hassan Khalif.

The immediate benefit of this rollout, according to Hormuud, is the seamless upgrade for its 4G customers to 5G at no additional cost, ensuring that a broad base of users instantly enjoy improved internet speed and reliability. A 5G service promises to enhance connectivity and efficiency, aiding the country’s integration into the regional economy and stimulating trade and investment.

The network will initially be accessible in major cities, offering 81% coverage, indicating the extensive reach of the new technology nationwide, the service provider said.

“The network will initially be accessible in Mogadishu, Kismayo, Galkayo and Baidoa, as well as Dhusamareeb, Beledwayne, Afgoye, Merca and Dhobley,” Hormuud said in a statement.

After years of investor reticence and minimal foreign direct investment flows, Somalis themselves have taken significant steps to alter their economic destiny.

Hormuud Telecom, a domestically established firm since 2002, promotes itself as a company “built by Somalis for Somalis.”

Operating from Mogadishu, the company is Somalia’s leading telecom provider, the largest private-sector employer, and the first Somali private enterprise to attain international ISO certification.

With over 12,000 shareholders, all of whom are Somali nationals, Hormuud has grown from the 283 founders who initially started the company. 

Given the widespread reliance on mobile money services among the Somali population, particularly among those without access to traditional banking facilities, the introduction of 5G is also expected to significantly boost the efficiency and security of financial transactions.

Somalia’s formal integration into the EAC came after its Minister of Commerce and Industry, Jibril Abdirashid Haji Abdi, presented the instrument of ratification of the treaty of accession to EAC Secretary-General Peter Mathuki on March 4, 2023, in Arusha, Tanzania.

Its accession to the regional block comes after decades of hesitance due to factional political conflicts that had engulfed it in civil war. As active participation in EAC activities increases, robust digital infrastructure will be essential for further cross-border trade, investment, and collaboration. 

]]>
https://techcabal.com/2024/04/03/somalia-plugs-5g-into-its-economic-rebound/feed/ 0