South African multinational mobile telecommunications company, MTN Group at the tail end of 2020 restructured its senior management in a move aimed at strengthening support towards achieving the group’s business strategy. In the restructure saw the telco appoint Ms. Yolanda Cuba as the new Vice President for the Southern and East Africa (SEA) MTN Markets, taking office effective Jan 1st, 2021.
Cuba is now steering the continued growth and strategic progress of the SEA region which is critical to MTN’s growth ambitions as it presents good opportunity for growth in mobile financial services as well as the largest potential for further expansion. The SEA region which covers the MTN markets in Rwanda, South Africa, South Sudan, Swaziland, Uganda and Zambia.
Since Uganda is part of the MTN SEA markets, Cuba shared her thoughts and insights on MTN Group’s plans for Uganda, as well as the region under her.
MTN group restructured its senior management to give it better growth opportunities in Africa. What does the Group see in Africa that has elicited this kind of move?
Africa still provides vast opportunities for growth with a lot of potential growth in sub-Saharan Africa given its young population, low data penetration across most markets and growing Fintech services.
Uganda is similar to other countries in the region save for South Africa. Data penetration is very low. Mobile penetration is around 70 per cent and in other countries, it is over 100 per cent. There is need to look into how we can get the penetration to over 100 per cent to ensure more people are connected. On the data front, there is a lot of potential because it is around 30 per cent.
There is evidence that more people are using our services. However, there are not so many data enabled devices and our focus is on how we enable more people access this service. We are focusing on further roll out of 3G and 4G with at target of at least 90% geographical coverage in Uganda as per our licence obligation.
There are also still vast opportunities in diversifying into other areas as well such as;
- Fintech and digital services technologies.
- There are opportunities in clean technology.
- Data centres which are driving demand for digital content, mobile money, cloud services and more.
As the landscape continues to grow, these are emerging as new frontiers for which MTN, the largest Pan African telecommunication company are providing the lead on.
What is your assessment of the telecom landscape in Uganda and the region that you oversee?
Uganda has a young, fast-growing population, with mobile and data penetration below 70% and 30% respectively, which creates a massive growth opportunity in the medium to long term as the addressable market grows Year on Year. The needs of these customers will be mainly data and digital to support their lifestyle, this youthful population coupled with steady GDP growth and an under penetrated market, creates potential for sustainable revenue growth over the years.
Today we see more people using data services and yet the penetration is still low. More people are using mobile money, but there is room to transform it into the e-commerce platform to drive business in Africa. Ugandans are open to all these things, but as a telecom provider, we need to bridge whatever gaps still exist in terms of reach and pricing.
What is your planned investment in Uganda to realize all of this?
From a network perspective, we will continue to invest heavily over the next five years in infrastructure development which will give the customer a better experience and help the company further enhance our leadership position in this market.
Network expansion for both voice and data has started and will be scaled up over the next few years with the expectation to cover at least 90% geographical coverage of the country with the best infrastructure ensuring quality voice and data services.
We are the leaders in innovation and we shall continue innovating and bringing Ugandans even closer to the rest of the world. We shall continue working with other stakeholders to see how to bring the costs of data further down. We believe that within that time, we shall also have deployed our 5G technology which we tested and showcased recently.
We are enhancing our mobile financial services to enhance the cashless economy.
When will these investments translate into cheaper data for example?
You will get more data today at the same cost you spent to buy a gigabyte of data last year. From an effective pricing perspective, the price is steadily going down. For us to drive the price even lower, we need more spectrum which makes it more efficient for us to deliver services to our customers. The less spectrum you have, the more physical infrastructure you need on the ground which is more costly and vice versa. The spectrum also has to be priced correctly. The right spectrum at the right price will lead to faster speeds. If we can also get more people using 3G and 4G spectrum for voice, it means it is cheaper to carry the traffic than on 2G.
As technologies move on, we are seeing a more efficient deployment in our infrastructure which benefits the customers. The customers also have to have the handsets. In Uganda, less than 30 per cent of our customers have data enabled devices. But MTN Uganda now has a deliberate strategy to bring to the market good smartphones at prices that are much lower.
We have also launched a device financing scheme (Pay Mpolampola) that allows customers to pay for handsets over a period of time. All these initiatives will definitely help drive prices down as we grow connectivity.
Regulation plays a critical role in the growth of the industry. Do you think that the current regulatory environment in the region supports the Groups ambitions?
In Uganda, the programs of the regulator are quite facilitative. We continue to engage and collaborate more to ensure sustainable digital progress.
But in most markets, policies are often reactive and not always well adapted to the digital age. Technology is moving faster than policymakers which can sometimes slow down progress. Many countries will miss out on the benefits of the Fourth Industrial Revolution (4IR) if they don’t quickly adopt a clear strategic plan. In some markets, there is also need to collaborate more to ensure sustainable digital progress.
What would you like to see happening in the regulatory environment in Uganda for example to make it easier for you to succeed in your new portfolio
As the African market offers unprecedented opportunity to leverage technological advances, without the burden of expensive legacy infrastructure policymakers can help drive this growth in a number of ways,
More collaboration between policymakers and industry players, such as making lower-spectrum bands available, promoting infrastructure sharing, providing rollout incentives, and even possibly by lowering license fees.
In Uganda, there is a regulatory requirement to sell part of the company on the securities market. Is this something the Group is happy with?
MTN is already listed in several markets where we operate. So it is not something new to our group. We are happy to give Ugandans an opportunity to take ownership in a company that has served them for over twenty years.
Ugandans have trusted MTN from the very first day it came here and have been responsible for making MTN number one. So let them get a piece of it. As for the details of this, that’s something that’s being handled with the government and the regulators and at the appropriate time, this information will be availed to the public. But for me, what would be important is that when this eventually happens, winning means that the ‘guy on the street is able to participate’. We must make it that easy for them to participate.
There are new, smaller but competitive players particularly in the data segment of the industry. How does MTN react to this emerging competition?
At MTN, we are happy to have smaller firms coming up. Competition is healthy. As a policy, we work with a lot of smaller players. A lot of smaller fintech firms for example have enabled value addition on our products and services. We have actually allowed some of them to integrate into MTN API platforms.
There will also be deliberate support from MTN to fintech and data partners that work in areas of national development plan priorities such as healthcare, agriculture, job creation, and education. So we are happy to have them playing alongside us.
Editor’s Note: This is an excerpt provided to PC Tech Magazine for publishing.