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MTN Surprised over Growth in Voice Revenue in Nigeria

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As part of its financial results for 2017, MTN has reported that voice (measured as talk time in minutes) in the Nigerian market increased by 17% year-on-year (y-o-y).

The company has experienced a 7.2 % y-o-y growth in the contribution of voice to overall service revenue in that country. Voice revenue for 2017 stands at 3.2 billion naira.

Ralph Mupita, Group Chief Finance Officer at MTN says the telco was pleased to achieve the growth in voice, although it does not expect this trend to continue for much longer, particularly given the experience in other markets where voice revenue remains flat in constant currency.

“It was really good to see the continued growth in our voice market where we had a pleasing seven percent in growth for the period. Voice represents seventy five percent of service revenue in Nigeria and seeing that level of growth left us pleased. Two big factors added to that growth and those are that we had net subscriber growth and we have returnees to the network. These two factors had an impact during the year. We expect positive growth for voice in 2018 but not at the exceptional level that we saw in 2017.”

MTN defines returnees as subscribers who stopped using their MTN SIM card and moved to another network before eventually returning to the MTN network.

Rob Shuter, Group president and CEO at MTN says the development is a reminder that voice remains a cornerstone of the business at MTN.

“Some in the industry think everything is about data and digital, but let’s remind ourselves that for MTN as a Group we are a sixty percent voice business and for MTN Nigeria it is a seventy five percent voice business. We are certainly building the data and digital businesses, but we better take good care of voice. Voice in Nigeria is still a growth story.”

Shuter adds that while data in Nigeria saw growth of 86.6% in 2017, this was off a low base.

MTN has only 14.1 million active data users in the country. Shutter says data has very low tariffs and modest adoption in Nigeria (digital business declined by 3.5%, according to the latest financial results), but the company says the market remains well-suited to data monetisation going forward and so has invested in 1520 new 3G sites and 538 4G sites.

During the last quarter of 2017 the operator’s Nigerian business recorded net additions of 1 965 518 to bring the subscriber base at year end to 52,3 million.

MTN noted that Nigeria experienced a markedly weaker naira in 2017, as well as tough currency liquidity challenges earlier in the year, but there was an improvement as the year progressed.

The company expects to achieve double‐digit constant currency service revenue growth in Nigeria over the next few years.

It is also confident the IPO will go ahead in the country by the end of the first half of 2018.

Capital expenditure by the telco in Nigeria over 2017 reached R9 billion and was second only to the R11, 5 billion spent in South Africa, among all of MTN’s 23 markets.


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Telecom

FG Plans EO to Criminalise Fiber Cable Damage Costing Telcos Billions

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Nigeria will criminalize the destruction of broadband fiber cables following repeated complaints by MTN Nigeria Communications Plc and other telecommunications companies that they are losing billions of naira, according to people familiar with the matter.

FG Plans EO to Criminalise Fiber Cable Damage Costing Telcos Billions

Federal ministry of works, which supervises federal road constructors, is finalizing the regulation that will be signed as an executive order by President Bola Tinubu, said the people, asking not to be identified as they weren’t authorized to comment.

While there are presently laws against vandalism, the authorities are aiming to regulate construction firms more closely.

The order will enforce stiff penalties on offenders, said the people, declining to provide more details or say when it will be signed.

“Telecom assets are critical backbone that supports the economy across sectors,” said Temitope Ajayi, a senior presidential aide, who noted that the Association of Telecommunications Companies (ATCON) has been demanding the classification for years.

New rules will provide “further assurance that the Nigerian government will protect their investments against vandals and criminal elements.”

The Nigerian Communications Commission (NCC) estimates that the sector will make up more than a fifth of the country’s gross domestic product by the end of 2027, up from 13.5% in the third quarter of last year.

The move will help alleviate pressure on the telecoms sector, which is facing increased operating costs and sales pressures from a sharp depreciation in the currency and a threefold increase in energy prices.

Repairs and revenue losses from damaged cables is estimated to have cost the sector almost 27 billion naira ($23 million) last year alone, documents seen by Bloomberg show.

MTN Nigeria, the biggest wireless operator in Africa’s most-populous nation, and Airtel Africa Plc bore the brunt of the costs, the documents show.

MTN suffered more than 6,000 cuts on its fiber cable last year, the documents show. On Feb. 28, a cut on its network in three different locations by a road construction firm, an oil serving company and someone burning rubbish in a manhole meant customers faced more than five hours of data and voice outages.

The operator relocated 2,500 kilometers (1,553 miles) of vulnerable fiber cables between 2022 and 2023, at a cost of more than 11 billion naira – enough to build 870 kilometers of new fiber lines to areas without coverage.

A presidential order on the matter would be welcomed, said Tony Izuagbe Emoekpere, president, Association of Telecommunications Companies of Nigeria.

“When it comes to communication infrastructure, they are destroyed at will, so we are eagerly awaiting the president’s order,” he said. “It would be a great boost to the industry, and it will also encourage investment.”

 

 


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Telegram Eyes 1Bn Users amidst Political Pressures

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Telegram, the messaging giant founded by Pavel Durov and headquartered in Dubai, anticipates hitting a remarkable milestone of one billion active monthly users within the next year.

Durov’s departure from Russia in 2014, prompted by governmental pressures to stifle opposition communities on his VK social media platform, underscores Telegram’s commitment to neutrality despite geopolitical challenges.

With 900 million active users currently, Telegram stands as a beacon of free speech in the digital realm, particularly influential in former Soviet Union republics and pivotal during conflicts like the Russia-Ukraine standoff.

Durov’s staunch advocacy for freedom of expression and opposition to censorship by tech giants like Apple and Google reinforces Telegram’s status as a neutral platform.

Opting for the UAE as its base, Durov cites its neutrality and openness as conducive to Telegram’s ethos, serving both opposition groups and governments alike while maintaining impartiality.

In Durov’s vision, the pursuit of freedom eclipses material gain, shaping Telegram’s trajectory as a bastion of digital liberation.

 

 


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NITDA, NIMC Announce Collaboration To Strengthen Digital Economy

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To further strengthen Nigeria’s digital economy in line with President Bola Ahmed Tinubu’s Renewed Hope Agenda, the National Information Technology Development Agency (NITDA) and National Identity Management Commission (NIMC) have announced a collaboration on National Public Key Infrastructure (PKI) and Digital Public Infrastructure (DPI) to enhance and create synergy between digital identity, payment ecosystem, and secure & seemless data exchange capabilities for Nigeria.

During the meeting between the Director-General of NITDA, Kashifu Inuwa Abdullahi, and Director General of NIMC, Engr. Bisoye Coker-Odusote, with some management staff of both organisations, they discussed various initiatives, which include building DPI stacks for a secured and seamless data exchange and forming partnerships to transform the national identity system.

This collaboration also aims to harness the potential of the innovative ecosystem and emphasise the use of Public Key Infrastructure (PKI) to drive digital transformation in Nigeria.

To ensure a smooth implementation, a 12-man committee was set up. This committee will play a crucial role in kickstarting and harmonising the initiatives. It is expected to deliver a comprehensive implementation report within the next 4 weeks


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