For MTN, Africa isn't a country

It has taken MTN, Africa’s largest telecom operator, nearly 30 years to get here. Here is the point where it realises it will take more than fibre optic cables running across the Atlantic and connecting 19 African countries, to fix the continent’s digital backwardness.

Africa is the world’s second-largest and second-most-populous continent, after Asia in both aspects. It is also the least developed and bears the unwanted tag of the world’s least technologically advanced continent. In 2022, only 36 percent of Africa’s population had broadband internet access, according to the World Bank. The report explains that although mobile internet availability has increased, broadband infrastructure reach and the quality of available services still lag other regions.

MTN is eager to fix the massive infrastructure deficit, but it would need the people; not just its workers but turning subscribers and political institutions in the digital journey of Africa into collaborators. Hence, the company is no longer getting high on the trendy “Everywhere you go” marketing slogan which merely describes its geographical coverage. It is asking a simple but profound question “What are we doing today?”

Lakinbofa Goodluck, Public Relations Manager, MTN Nigeria, said, “What are we doing today?” represents a call to action, a campaign for doing. African countries have to do more to push the continent digitally forward.

The e-government index of countries like Nigeria, the continent’s largest economy, is abysmal at 140 out of 193 countries in the world. The country does not even show up in the top 16 countries on the continent with the best e-government ranks, according to the United Nations E-Government Survey 2022.

It indicates that the government is paying lip service to calls for urgent reforms in technology adoption. For connectivity to become widespread, experts say the government needs to actively invest and consume technology.

But the UN report says the biggest challenge is the cost of mobile broadband subscriptions as a percentage of gross national income per capita which remains higher in Africa compared to other parts of the world.

Although Nigeria is ranked among the top 12 countries in Africa with cheap internet data, a persistently underperforming economy has ensured that millions of subscribers can not afford data even while they are cheap.

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Nigeria is, however, MTN’s biggest mobile subscriber contributor on the continent. Whilst the South African market brings in more in terms of revenue, the telco takes Nigeria so seriously that it cannot look away. So important is the market that MTN Nigeria describes itself as a Nigerian company. It demonstrated its Nigerianness in 2021 when it sold 575 million shares to the Nigerian public at N169 per unit. It was oversubscribed.

Just as Nigeria and South Africa are important to the conglomerate, so are the other 17 countries where it has a presence. But uniting the continent through fibre cables also means learning to adapt to local politics. There may be 54 African countries clamouring for a united continent with regards to geopolitics, they are uniquely different and often non-aligned in their views about development in Africa. For example, while Nigeria does not have any qualms about issuing visa-on-arrival to most African nationals, South Africa requires visa applications from Nigerian nationals. It is a problem for a company that wants to open up movement within the continent to facilitate trade.

“We understand the uniqueness of the 54 countries in Africa and we are utilising that knowledge to move more people to the internet,” said Atul Dama, General Manager Strategy and Transformation, MTN Group.

MTN is also paying close attention to the currency situation in Africa as it affects cross-border payment. The company recently valued its fintech unit at $5.2 billion following a stake by Mastercard. It is therefore anticipating scaling its operations across the continent but volatility of local currencies against the dollar remains a challenge MTN.

“The weakening of currencies in our markets against the US dollar is also impacting capex, for which guidance for 2023 is revised up to R40.1 billion, based on current currency assumption and driven mostly by maintaining the investment in 4G and 5G rollout in Nigeria. We continue to target capex intensity in the range of 15-18 percent over the medium term,” noted Ralph Mupita, CEO of MTN Group in the company’s half-year results.

One way the telco is looking to solve the problem is to help enable local currency to local currency exchange. In other words, facilitates payment of goods and services within the continent with local currencies. The plan would ensure that businesses would not need to convert their currency into dollars before trading with other businesses within the continent, thereby reducing their exposure to the dollar and the volatility that comes with it.

It is an ambitious plan but the company says the future of Africa depends on collaboration between the government and the private sector. This is one of the priorities of the company’s Ambition 2025 initiative. It is part of the ‘Create Shared Value’ focus in the document.

“We are focused on the continued execution of our Ambition 202 strategy, which remains relevant in the current macroeconomic volatility and presents an attractive scope for growth. As we continue to manage the prevailing challenges in our operating environment and the near-term impacts on our topline and margins, we maintain our medium-term guidance,” Mupita said.

The company is also pushing another continental initiative called the Nation-State Agenda. The details of the agenda are still sketchy as of the time of writing this article but the company said it is collaborating with the African Continental Free Trade Agreement (AfCFTA) purveyors to create a huge African market that benefits every stakeholder including government, private sector and individuals.