MTN: Connecting Rural Africa

I wrote about MTN on the Small Cells Blog last year, where Babak Fouladi, Technology and Information System (Group CTIO) at MTN delivered an insightful talk. In addition to providing a lot of valuable insights on how they plan to tackle rural connectivity, they talked about their RFP for Rural, Ultra-rural and Ultra-ultra-rural sites.

In the latest TowerXchange, Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group explained this and a lot of other details. The article is available here. I will just look at what he said specifically about this RFP below:

The RFP is an attempt to source full turnkey vendors for our different categories: rural, ultra-rural and ultra-ultra rural. The RFP should close in September. 

We are interested in the role that independent telecom tower companies (towercos) can play in enhancing rural connectivity. Leasing space on towers could be an important enabler of investment in rural and ultra-rural areas. However, the leasing model is unlikely to be operable in ultra-ultra rural areas where low ARPUs will be unable to support more than one operator. Sharing infrastructure is an option for reducing the cost of roll-out and opex too. 

I cannot comment on how the pricing structure and economics of the sites will work, as we are waiting to see what is proposed in the responses to our RFP.

There are a few ways we identify and categorise sites, such as determining the distance from the urban areas we already serve. We can use satellite imagery to complement that and identify the best areas to serve, as we cannot rely on census information in these areas. 

For backhaul we expect to use a variety of technologies. In rural sites we have specified microwave backhaul as these sites should not be too far away from our existing network. For ultra-ultra-rural sites, we have specified optimised Very Small Aperture Terminal (VSAT) backhaul. Ultra-rural sites will see a mixture of the two solutions. 

The towers will also differ from site to site. At normal rural sites, shareable macro towers will be used; at ultra-rural sites we expect shorter towers of between 10m and 20m. While at ultra-ultra rural sites, we are leaving the details of the structure to our vendors to propose depending on what they think will work best.

We don’t only need sites which have a low-cost bill of materials, but we need structures with minimal maintenance and a quick implementation timeline. It should take up to a week to erect a rural site, but our ultra-ultra rural sites should be complete in a day or two. 

Site availability will differ to what we expect for our core sites. At rural sites we are proposing > 98% availability; at ultra-rural sites > 95%; and we will wait to see what our vendors propose for ultra-ultra rural sites. At these most rural sites we need to keep maintenance and repair visits to a minimum, so while we expect to use solar power and battery back-ups at our rural and ultra-rural sites, we may opt for solar-only sites at our most remote sites. Eliminating diesel generators cuts maintenance and refuelling, cutting batteries from our most remote sites further simplifies the maintenance of the sites and eliminates sites going down due to battery theft. 

Most rural sites, with their larger towers and more demanding initial specification could be upgraded, but ultra rural and ultra-ultra rural would require complete rebuilds. But that would be an excellent problem to have.

We think offering data and internet connectivity is essential. Even at our ultra-ultra rural sites we want to be able to offer at least 3G levels of connectivity. 

Our CHASE programme helps us focus on what matters for our users: Coverage, Handsets, Affordability, Services and Education. We have to ensure sufficient data coverage in low-income areas; affordability of handsets and data services; bundle together the correct services for our customers; and enhance digital literacy and awareness so that people can make the most of the services we deliver. 

The complete article is here.

Related Posts:

• Operator Watch Blog - Africa: The Race For No. 2 Operator
• 3G4G Small Cells Blog - MTN sees future in 3G
• 3G4G Small Cells Blog - MTN: Connecting Rural & Remote Africa

Africa: The Race For No. 2 Operator

MTN is the largest mobile operator group in Africa with roughly 168 million subscribers, but who is number 2?

Airtel just crossed 100 millions subscribers in Africa and many news sites have started calling them the second largest operator group in the region. Livemint for example reported:

Bharti Airtel’s Africa arm has crossed the 100-million customer mark across its operations in the continent, the company said in a statement on Wednesday.

This is significant for the company, which entered the continent in 2010. Airtel Africa is currently the second-largest mobile operator in Africa by the number of active subscribers; South Africa’s MTN is the largest.

Airtel Africa is the holding firm for Bharti Airtel’s operations in 14 countries in the continent across three regions — Nigeria; East Africa, comprising Kenya, Uganda, Rwanda, Tanzania, Malawi and Zambia; and the rest of Africa, including Niger, Gabon, Chad, Congo Brazzaville, the Democratic Republic of the Congo, Madagascar and Seychelles. Nigeria alone accounts for almost half of its earnings before interest, taxes, depreciation and amortisation (Ebitda).

According to this Bloomberg article, back in July 2019, Airtel was the 4th largest by subs numbers.

• MTN 167.7 million 
• Orange 120 mil 
• Vodacom 110 mil 
• Airtel 98.9 mil

There is a small caveat though. While MTN does not include Middle East, Orange does. Again, Vodacom includes Safaricom in which it has around 35% stake. Vodafone, Vodacom’s parent (64.5% stake), had an additional 49.3 million customers in its operations in Egypt and Ghana at the end of June. If we include Vodafone, Vodacom and Safaricom, it would be going head-to-head with MTN for the top place.

The Guardian, Nigeria has a good summary of the top 4 mobile operators in Africa here.


Related Posts:

• Maroc Telecom's African Presence
• Lesotho: First 5G launch in Africa

World's largest mobile networks by subscriber numbers - Jan 2019

Here is a list of top 10 mobile networks by subscribers. The list is very dynamic as some operators grow while others shrink. The best example of operator that has been growing rapidly, overtaking others is Reliance Jio.

1. China Mobile, China, 925 million [1]

2. Vodafone Group, UK, 536 million [6]
Note: Vodafone Idea, India has 422 million subscribers [2]

3. Bharti Airtel Group, India, 413 million [4]
Note: Airtel India has 329 million subscribers [3]

4. China Unicom, Hong Kong, 315 million [1]

5. China Telecom, China, 303 million [1]

6. Reliance Jio, India, 280 million [6]

7. América Móvil Group, Mexico, 279 million [5]

8. Telefónica Group, Spain, 272 million [7]

9. MTN Group, South Africa, 221 million [9]

10. Veon Group, Netherlands, 211 million [8]
10. Orange Group, France, 211 million [10]*

* = added later

[1] https://www.mobileworldlive.com/asia/asia-news/china-telecom-narrows-subs-gap-to-unicom/
[2] https://discover.vodafone.in/about-us/home?section=consumer
[3] https://www.airtel.in/about-bharti/equity
[4] https://www.airtel.in/about-bharti/about-bharti-airtel?icid=footer
[5] http://q4live.s22.clientfiles.s3-website-us-east-1.amazonaws.com/604986553/files/doc_financials/quarterly/2018/3Q18.pdf
[6] https://www.mobileworldlive.com/asia/asia-news/jio-profit-surges-on-continued-subs-gains/
[7] https://www.telefonica.com/en/web/shareholders-investors/financial_reports
[8] https://veon.com/Global/Files/Reports/3Q18/Q3%202018-Full%20announcement.pdf
[9] https://www.mtn.com/MTN%20Service%20Detail%20Quarterly%20Quarterly%20Trading%20Upd/MTN_Q12018_Results.pdf
[10] https://rai2017.orange.com/orange2017-content/uploads/2018/05/orag_1802135_ra_150x210_gb_mel.pdf

Ethiopia: Finally opening up

Ethiopia’s state owned telecommunications company, Ethio Telecom is currently Africa's largest mobile operator.

According to IT Web’s report with over 57 million mobile subscribers as at November 2017, Ethio Telecom had beat MTN Nigeria to become Africa’s largest in terms of its mobile customer base.

A sector expert was quoted to have said:

“Ethio Telecom of Ethiopia is now the largest mobile operator in Africa in terms of subscriptions, with 57.34 million mobile subscriptions at end-2Q17. Ethiopia is also one of the very few African countries that has not liberalised its telecoms market and introduced competition, so Ethio Telecom has a monopoly,” 

An expansion drive costing over $1.6 billion in the last few years has contributed greatly to this success. According to a statement on their website: 

"The expansion project has also significantly improved quality of services, with customers enjoying 3G wireless services by upgrading the 2G network across all regions covering all over the country; with also 4G LTE, super-fast services, launched in Addis Ababa. Over the past few years, Ethio Telecom has been transforming itself to meet its vision of becoming a world class operator and our journey so far shows we are on the right track.”

The company reports that 64.4 million of its customers are mobile phone subscribers, and 1.2 million are fixed line users. The company's internet service users have also reached 16 million. Ethiopia is Africa’s second most populous nation behind Nigeria and the numbers are believed to have played a significant part.

The other reason for this success is the strictly regulated economy of Ethiopia and the government til date has not liberalized the telecoms sector resulting in Ethio Telecom having a monopoly as the state-owned and only operator. 

However the currently government under Prime Minister Abiy Ahmed is attempting to open up the economy and has announced plans split state-run monopoly Ethio Telecom in two and gradually sell shares in both entities to top telecoms companies in a bid to increase competition.The PM has said: 

“…If Somalia with 12 million population has four telecom operators, Ethiopia with over a hundred million population has to also open its doors to multiple telecom operators,” 

Under the plan, a total stake of between 30 per cent to 40 per cent in Ethio Telecom will be sold to operators, provided they are rated as top ten players globally.

The Ethiopian government also routinely cuts the internet mainly for political but also academic reasons.To forestall the leakage of key university entrance exams, the authorities blocked the internet in the past. Activists have slammed the government repeatedly for cutting off the internet because they wanted to control the spread of information and materials relating to anti-government protests and human rights abuse.

A more privatized sector and less governmental interference will hopefully prevent this. 

Both MTN and Vodacom see potential for growth in the Ethiopian market. An MTN spokesperson states:

"MTN has long held the view that Ethiopia offers great opportunities for growth, both for the people of Ethiopia and for the businesses that could serve them, through the liberalisation of the telecommunication market in that country. MTN is excited by the potential opening up of the Ethiopian market as it would be a natural fit for MTN's existing and extensive Pan-African footprint. MTN's licence to provide value-added services in Ethiopia was recently renewed and we continue to maintain an office in Addis Ababa. Ethiopia presents many exciting telecommunication opportunities and we look forward to further discussions with that nation's authorities on potential partnerships and opportunities."

MTN operates in 22 countries across Africa and the Middle East, and Vodacom operates in five African nations.

While Vodacom have said: 

"Ethiopia is an attractive market so it follows that there would be interest. Naturally, this is dependent on what might become available and if it fits within our investment parameters." 

However PM Ahmed Abiy also clarified the conditions for selling shares in the state telco: 

“Certain amounts of shares will be sold gradually in 10, 20, 30 years. We are not giving it up in one go, it is not possible.”

Ethiopians will be offered 5% in the new companies, and between 30% and 40% will be sold to telecoms operators that are top-10 players globally. There’ll be at least a year or two of “intensive study”, he said in televised comments. 

South Africa: Progress and Problems

South Africa’s mobile networks are all growing their subscriber numbers, with Telkom the latest network to reveal its most recent figures.

Telkom’s interim results for the six months ended 30 September 2017 show it had 4.3 million active mobile subscribers.

This comprises 3 million prepaid and 1.3 million post-paid users.

The table below details the latest available subscriber numbers for South Africa’s mobile networks.

Vodacom	40.0 million
MTN	30.9 million
Cell C	“Over 16 million”
Telkom	4.3 million

Source

According to Telkom their operating revenue was down by 0.6% compared to last year, reaching R20.1 billion.

“The first half of the year was characterized by a tough economic environment and increased competition. Even though South Africa exited the technical recession in the second quarter of the year, business confidence remains very low.”

 Despite the tough conditions, Telkom’s mobile division showed strong growth.

“The mobile business growth trajectory continued in the period with strong growth in active customers and stable ARPUs, resulting in an increase of 43.2% in mobile service revenue,” said Telkom.
“The strong mobile growth which boosted the group’s performance was underpinned by an expansion of our network, distribution, and the launch of innovative products which were well received by our customers.”
“We are pleased that our mobile business received the MyBroadband Best Mobile Broadband Provider of the year award, in the best value for money category.” Source

Market leader Vodacom’s priority must be defending its market share in an increasingly competitive environment. According to Equities analyst Irnest Kaplan  they must offer consumers more value, beyond simply “selling megabytes”. So-called over-the-top players — companies like Facebook and Google — are profiting from the data pipes Vodacom sells; the company needs to develop value-added services of its own, such as quality content, that subscribers are prepared to pay for. Without this, there’s the risk that consumers will simply shop around for the cheapest data rates

He said Vodacom, and the other mobile operators, are in a powerful position in that consumers carry their products in their pocket all day.

 “They should do more to leverage that. It’s hard for them because they are operators and not app developers, but people carry their products all the time, they know where you are all the time — there must be amazing apps they can offer.” Source

Moreoever all the South African operators face issued due to the  impasse over new spectrum allocation. Vodacom may be forced to cut spending in rural areas to densify its network in the more populated urban centres because of this “spectrum crunch”.

This issue needs to be sorted as soon as possible. Technology is the driver of economic growth. Spectrum is vital for the roll-out of new technologies and innovation, which will drive economic growth, create jobs and allow South Africa to take advantage of the Internet of things and the other technologies.

Meanwhile Ericsson and MTN will start a 5G trial in South Africa during the first quarter of 2018.

The companies signed a memorandum of understanding at AfricaCom 2017 to collaborate on the rollout of 5G technologies in South Africa.

MTN will trial a range of 5G use cases and applications as a proof-of-concept for South Africa in its laboratory, which will lead to commercial deployment in the future.

The companies said they will collaborate to identify 5G use cases in industries such as mining, transportation, agriculture, manufacturing, and utilities.

“5G gives us the opportunity to rethink our business and address previously-untapped value chains” 

said Giovanni Chiarelli, CTIO at MTN South Africa.Source

Afghanistan Mobile Operator Overview

As of March 2014, the penetration rate in Afghanistan was estimated at 89% over a population estimate of 29.8 million.

The country's telcom regulator is the Afghanistan Telecommunications Regulatory Authority (ATRA). 

Source

Last week at an event in Washington, DC, Amirzai Sagin – Afghan Minister of Communications and Information Technology – said that in the last 12 years Afghanistan has come a long way in terms of developing the ICT sector (Information and Communications Technology). Today, there are five major telecom companies, and approximately 60 internet providing companies operating in Afghanistan. More than 90 percent of the Afghan population has access to mobile services, and 22 million of them own at least one mobile phone. The number of internet users continues to increase as the cost of internet has decreased from $1,000/mb in 2002 to $22/mb today. In addition, the Ministry has started issuing National Electronic IDs, which is a centralized system for avoiding fraud. At the end of his keynote address, the Minister said something very important that Afghanistan has the capacity to carry out the next presidential election, which will be in five years, via mobile phones.

All five mobile operating companies (Etisalat, MTN, AWCC, AfTel, and Roshan) are offering their own mobile money product. In 2008 Roshan began the use of the M-PAISA mobile money service. These products include mobile wallet technology, where customers can store their money digitally as opposed to using cash. Roshan’s M-PAISA operates in 6 major cities with 17,000 active users. The users portfolio is about to reach $79.5 million by the end of 2014. Most Afghans receive their monthly salary through their mobile phones, and relatives send money via phone from one province to another.

Last week at an event in Washington, DC, Amirzai Sagin – Afghan Minister of Communications and Information Technology – said that in the last 12 years Afghanistan has come a long way in terms of developing the ICT sector (Information and Communications Technology). Today, there are five major telecom companies, and approximately 60 internet providing companies operating in Afghanistan. More than 90 percent of the Afghan population has access to mobile services, and 22 million of them own at least one mobile phone. The number of internet users continues to increase as the cost of internet has decreased from $1,000/mb in 2002 to $22/mb today. In addition, the Ministry has started issuing National Electronic IDs, which is a centralized system for avoiding fraud. At the end of his keynote address, the Minister said something very important that Afghanistan has the capacity to carry out the next presidential election, which will be in five years, via mobile phones.

All five mobile operating companies (Etisalat, MTN, AWCC, AfTel, and Roshan) are offering their own mobile money product. In 2008 Roshan began the use of the M-PAISA mobile money service. These products include mobile wallet technology, where customers can store their money digitally as opposed to using cash. Roshan’s M-PAISA operates in 6 major cities with 17,000 active users. The users portfolio is about to reach $79.5 million by the end of 2014. Most Afghans receive their monthly salary through their mobile phones, and relatives send money via phone from one province to another.


Source

Roshan’s network now covers 60% of Afghanistan’s population. A third of the country’s subscribers are Roshan customers, giving it the largest market share of the five mobile network operators in the country. And there is plenty of room yet to grow. Though the Afghanistan Telecom Regulatory Authority puts telephone penetration at 72%, Ladak says the proportion of people with  phones is probably half that. Afghans, like their counterparts in the rest of the poor world, own more than one SIM card to take advantage of different rates and packages. 

That should mean there are millions of Afghans yet to connect.

Foremost among these, perhaps, is that 3G data and services such as ringtones and caller tunes make money, even in a very poor country.  When Roshan launched 3G services last year, the demand took it by surprise. Perhaps it shouldn’t have: Afghans, like anyone else, enjoy entertainment and music. Some 600,000 subscribers, or 10% of Roshan’s total customer base, now use 3G. Their top destinations are—yes—Facebook, YouTube and news websites. 

Mobile networks cover 88.5% of Afghanistan’s population.

Source.

Source.