MTN Group unveiled its re-positioned strategy – Ambition 2025 – in March 2021, a plan to accelerate growth and unlock value in its infrastructure and platforms. As we head towards the end of 2022 it is a good time to reflect on the progress made in light of macro-economic factors creating an increasingly challenging market environment.
At a high level, MTN’s priorities include many elements common to its African peers. As we outlined in our report,
Sub-Saharan Africa Wireless Market Outlook: Operator Growth Strategies, growth opportunities and key challenges for mobile operators in the region have centered around stimulating mobile (and to a lesser extent, fixed) broadband adoption and revenues, extending 4G coverage and starting 5G journeys, and maximising value from FinTech and other value-added services. With Ambition 2025’s goal of pan-African digital solutions leadership, the strategic priorities outlined in the graphic below relate to platform development, best-in-class connectivity, ESG improvements, and portfolio transformation and optimisation.
For a CSP, connectivity is obviously at the core of much of this strategic focus. Ambition 2025 is built on a
scale connectivity and infrastructure business with a clear focus on driving network and operational efficiencies. This is embodied in its mantra “One network. One API layer. One data lake.” MTN has made meaningful progress on its goals in terms of data adoption and revenue, perhaps more in terms of the latter with data accounting for 35% of service revenue in H1 2022 (up from 28% in 2020) and growing at 33% per annum in Q3, though active data users only increased from 114 million in 2020 to 135 million in Q3. A key driver of data adoption, smartphone ownership has been relatively resilient through the pandemic and current inflationary environment, though the 154 million smartphones on MTN’s networks in June 2022 still exceeds the 130 million active mobile data users.
The priorities around connectivity have a number of important elements to them, that are worth reviewing:
- CUSTOMER EXPERIENCE enhancements with a focus on 4G expansion and network modernization on the path to 5G. MTN has increased its 4G network footprint from 334 million people in 2020 to 411 million in June 2022, around an extra 14 percentage points of coverage. MTN Nigeria has accounted for half of this increase as it pursues the group model of modernising existing sites and expanding rural telephony/connectivity programs.
- GBPS MOBILE NETWORKS with 5G development to support mobile services, fixed wireless access, and enterprise use cases. Network initiatives here involve enabling 5G ready BBU as part of ongoing RAN modernisation, sweating EPC assets to launch 5G, leveraging the large fiber infrastructure deployed for 4G (MTN has over 100,000 km of fiber assets in June 2022 on the path to 135,000 km in 2025, discussed in a presentation by Mohammed Aliyu, Chief FiberCo Officer at MTN GlobalConnect here), and targeted rollout in high-value traffic locations.
- GBPS FIXED NETWORKS with fixed broadband service evolution towards gigabit services. MTN has developed a strong portfolio of broadband technologies to target fixed applications, as part of its plan to connect 10 million fixed broadband homes by 2025 (of which, around 75% will be in south Africa and Nigeria). This strategy covers MBB modems for the top 30% of households, FWA for the top 10% of households (with 4G fixed LTE evolving to 5G FWA) and fibre for the top 1% of households, with Tarana’s Air Fibre FWA solution also in the mix, delivering a low-cost high-performance solution.
- NETWORK AND SERVICE AUTOMATION to drive operational efficiencies. On the operations side, this involves greater deployment of self-optimizing networks within major local operating companies in the short term, adoption of predictive network operations, and AI/ML use in contact centers. For customer facing functions, the ambition is to reach 70% digital sales and service transactions in 2025 (from 10% in 2020) with chatbots rolling out across the group from the initial deployment in Nigeria as part of the proactive digital-first care approach and a move towards unified and integrated CRM across all contextual channels. Unified AI and automation is coming to all platforms, ranging from decision and credit scoring for FinTech, cognitive bots for process automation, and AI/ML-enabled revenue assurance and fraud management. All of these initiatives will be well advanced by next year.
- INTELLIGENT NETWORKING AND COMPUTING through transformation to a data driven organisation with one data lake supporting this highly automated evolution. MTN began deploying its data and analytics platform, EVA (Enterprise Value through Analytics), in 2021 and will complete the roll-out next year. EVA consists of over 1,300 data feeds and delivers over 25 advanced analytics use cases across customer experience, network performance, customer engagement, anti-money laundering and fraud. MTN is also a leading pan-African cloud provider, a key element feeding into its targets to almost double its enterprise ICT revenue by 2025, building on a customer base of over 80% of the top 500 companies in Sub-Saharan Africa.
- ESG is at the core of MTN’s belief that “everybody deserves the benefits of a modern connected life”. Alongside the network expansion plans outlined here that are key for driving digital inclusion, MTN’s network approach is built on a sustainability strategy that will see it reduce greenhouse gas emissions by 47% by 2030 (off a 2019 base) and reach net-zero by 2040. It achieved a 16% reduction in emissions in 2021 with an increased use of renewable energy at sites (targeting 15% of sites powered by renewables by 2030) and use of AI-automated sleep and shutdowns of ran sites during low traffic periods. MTN is targeting a 77% reduction in energy consumption per subscriber by 2030.
Ambition 2025 reflects many of the elements essential for the business transformation of network operators this decade. With a focus on the evolution of 4G, 5G, and fixed broadband technologies to enable gigabit service experiences, alongside AI/ML-based network and service automation, all informed by a need to deliver higher-value, higher-volume connectivity using less energy, MTN’s strategy is in step with many other operators around the world. It is a strategic model that operators in both developing and developed markets are following.