south africa - mtn group · 2019-02-15 · smartphone forecast 2010 - 2016 •smartphones are...
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South AfricaKarel PienaarCEO MTN South Africa
Agenda
2
• Overview of South Africa market landscape
• MTN SA strategic intent for Full Service ICT Sector
• Key Technology overview on enabling the Full ICT strategic intent
• Network Investments and Broadband Enablement
• IT – Preparing for ICT
3
Competition has enabled a dynamic market
• Electronic Communications Act (ECA)
• Neotel licensed
• ECA implementation
• Altech Court Case
• Growth of investment in infrastruture
• New infrastruture providers / investors
• Emergence of new business models
• Growing competition
• More choice - expansion of products and services
• Downward pricing pressure
• Alternative business models enabled
4
Changes and new players in the SA telecoms industry
Mobile Operators
and new adjacent players
ISP
Data Centre, Tower and FibrePlayers
Other VANS
Players in the ISP & Business Space
Other Broadband Players
I3 africa
5
Africa analysis view
Key Challenges
• Increasingly competitive market
• Regulatory intervention
• Manage in a mature market
• Manage convergence and service integration (fixed, mobile and data)
Key Challenges
• Manage business in a maturing market
• Marginally declining ARPU
• Manage convergence and service integration (fixed, mobile and data)
• Manage customer quality, maintain service and network quality
Key Opportunities
• Defend / Grow customer base
• Differentiate within target market segments
• Deployment of infrastructure
• Bundled services
Key Opportunities
• Market growth (dual SIM ownership distortion)
• Maintain mobile voice revenue
• Data and VAS services
Mobile Market Fixed Market
Increased competition with increased focus on customer value as differentiator
Competitors will / are targeting Telkom’s revenue stream
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Africa analysis viewBroadband
0
400
800
1200
1600
2000
0 10 20 30 40
Mobile
Fixed
Key Challenges
• Increasingly competitive environment (services and new infrastructure)
• Product differentiation
• Manage wholesale / retail markets
• Fixed differentiation from the mobile broadband offering
Key Opportunities
• Differentiation of bundled offering
• Bandwidth-intensive applications hence specific event tariffs
• Alternative broadband infrastructure (e.g. rollout of LTE) (but spectrum dependent)
• Speed /QoS linked offers with fair usage
Different trends are driving the fixed and mobile broadband markets. The uncapped fixed product is changing the roles of service providers where as mobile broadband pricing strategies remains key
Mobile Market Fixed Market
Source: SA Telecoms Model 3.0, Africa Analysis
Mobile surpasses
fixed growth
2003 2005
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Smartphone forecast 2010 - 2016
• Smartphones are expected to grow to 19.6 million in SA by 2016
• Proportion of handset models which are considered smartphones will continue to increase
• A smartphone is defined as a mobile phone which can install 3rd party native applications (not Java apps).
• Base figures are obtained by looking at the annual reports of service providers, as well as user data from BMI-T publications.
• Future growth rates are estimated by looking at recent growth rates, global smartphone forecast, other BMI-T forecasts and the technology product lifecycle
• 3 million smartphones currently on MTN network
4,751,071
7,531,154
10,167,058
12,810,493
15,244,487
17,683,605
19,628,802
56%
35%
26%
19%
16%
11%
0%
10%
20%
30%
40%
50%
60%
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2010 2011 2012 2013 2014 2015 2016
Smartphones Growth
Source – BMI-T
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Tablet forecast 2010 - 2016
• Tablets are expected to reach 1.7 million in SA by 2016
• Bundling with data contracts will make tablets more affordable
• Ultra cheap models will also accelerate growth into the market
• A tablet is defined as a touch screen computer, which runs an operating system other than Windows, and has a size of more than 5 inches
• Base figures have been estimated based on smartphone penetrations, and the ration between smartphones and tablets in the market
• Future growth rates are estimated by looking at recent growth rates, global smartphone forecast, other BMI-T forecasts and the technology product lifecycle
• MTN tablets – currently 21 859
34,000
189,040
446,134
731,660
1,038,958
1,412,983
1,709,709
456%
136%
64%
42%36%
21%
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2010 2011 2012 2013 2014 2015 2016
Tablets Growth
Source – BMI-T
MTN’s vision on broadbandEverywhere You Go
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• Broadband connectivity will be a catalyst for socio-economic development and will enhance South Africa’s global competitiveness
• Bringing Mobility and High Speed internet access
• Bridging the Digital Divide – bringing broadband to the rural/under-served areas
• Supporting education, socio economic upliftment and innovation
• Enabling MTN’s customers to access information, entertainment, applications and services with much more richness and computing capacity
• MTN will provide technology & communication solutions in the “cloud”
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Content delivery embracing South Africa
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Driving the consumption of data
Applications Mobile Social Networking
Mobile Multimedia
Enhanced Location Awareness
Touch Web Virtual GoodsAugmented
Reality
To become the Leading ICT Service Provider in our market by being indispensable to our
Customer Segments (Consumer, SME and
Corporate) and Partners
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MTN SA strategic intent for full serviceICT Sector
Africa analysis view
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In becoming a Full ICT Service Provider for Consumer, SME and Corporate MTN will focus on complimenting its mobile and fixed offerings with the “Growth Zone” and expanding into fixed voice and extended value chain
Future Growth Areas
Current Revenue Sources
Low High
Low
High
Importance
Import
ance
Expansion into fixed line / fixed data and IT Services through :
MPLS networks Data center investment Cloud Computing Services Business Model SaaS Fibre LTE
Driving converged offerings (mobile voice, mobile data, fixed data and fixed voice and services )
Delta Partners view
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Needs to deploy both a selective fixed play and offer mobile driven convergent services
• Advertising Play
• Media/content Play (Music, LBS)
• Consumer gateway (“Portals”, SN)
• Network as a Service
• M-payments Play
• M2M & Mobility Solutions
• Conferencing – VoIP, Email
• IT Services (For selective Bespoke)
• LAN (for end-to-end SLAs)
• Conferencing – HQ Image
• Cloud Saas, Iaas
• Data Center & Security services
• Fixed Connectivity
• Mobile Data Network quality (3G, HSDPA++, LTE)
Infotainment(smartdevice and feature phone)
“Mobile ICT”(Smartdevicesdriven)
“Fixed ICT”(PC driven, fixed line or dongle HSDPA+, LTE)
Pipe (Low cost)
Smart Pipe
Consumer
Consumer Gateway Business
Strategic Options
• Multiple services to hook the High Value Clients
• Some M2M and mobility solutions require HSDPA+, LTE
• Battle ground of Google, Apple, SNs
• Requires local content and partnerships with key global players
• Requires fixed connectivity, or HSDPA+, LTE
• Leverage Network Assets
• Enables base to develop platforms for Mobile ICT
Recommended Option
CORE Mobile
Rationale Being indispensible to our customers
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• Service consistency is central to service satisfaction.
• Customer expectations have also increased and they expect more value from a service interaction with a company. The consumer base of South Africa is becoming like minded with regard to their service expectations.
• Accolades such as the recent Ask Afrika Orange Index® survey in the Telecommunication as the best Telecommunications Provider and the best Internet Service Provider in the country
• 2010 Africa.Com : MTN won two categories - Best Network Improvement
• MTN’s Brand strength - MTN has invested in the growth of the brand and its recognition in the country and the continent’s most valued brand reflects this investment -Brandirectory (Feb 2011) and Brand Africa (Sept 2011) - MTN as most valuable on continent
• Sunday Times Top Brands Survey (Aug 2011) - Best Telecoms Service Provider in the Consumer Category
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Evolution to date
2G (98% population coverage)
GPRS
114Kbps
(2002 onwards)
EDGE 240Kbps (2003
onwards)
3G (55% population coverage)
R99
384Kbps
(2005 onwards)
HSPA
1.8-14.4Mbps
(2008 onwards)
HSPA+ 21-42Mbps
(2010 onwards)
LTE (100+ pilot sites)
LTE
73Mbps- 10MHz (2X2)
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Spectrum re-farming – 900 MHz & 1800 MHz
10 MHz 1800 re-farming for LTE
• Device eco-system exists
• Coverage
• Multi Standard Radio
5 MHz 900 re-farming for UMTS
• UMTS900 rural data volume out growing GSM data on live sites
● Higher Current Spectrum re-use & Modulation efficiency
● Re-use of current MTN infrastructure
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MTN LTE sites approachPlanning for the Future....
• 4 LTE clusters are being piloted in Gauteng
• These clusters comprise of 100+ LTE sites
• Ericsson and Huawei equipment being used for the Pilot
• Aim is to trial the LTE technology & understand its benefits/deployment
• Provide select users the ability to experience the latest mobile broadband technology
• Challenges with full LTE deployment
• LTE Trial on 1800 MHz spectrum using a 10 MHz carrier (FDD)
• Limitation exists with regards to higher speeds and capacity due to insufficient spectrum
• Deployment is limited to small areas where 1800 MHz can be refarmed – actively pursuing partnerships in 1800 Mz band
• Access to 2600 MHz and 800 MHz is critical to ensure that future capacity needs are met and full potential of LTE being reached
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LTE – network tests
Local International
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HD streams- LTE
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Long term fibre rollout
National
• Coverage Area:
• Bloemfontein
• Bloemfontein City Centre
• Port Elizabeth
• Uitenhage
• East London
• Kwazulu Natal
• Amanzimtoti
• Ballito
New Sites:
• ~1840 till 2014 ~ 900 target for 2012
Vendors
• MTN – Metro build & Leveraging NLD, DFA, i3, COJ
Fibre Km (incl. MTN, i3 & DFA)
• ~4500
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New switch centres (Hubs) to enable hosting and cloud computing solutions
• Centres situated across South Africa with plans to connect then to the National Backhaul
• 100sqm available for third parties
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ICT conceptual view
Communications CAAS
Software
Orc
he
str
ati
on
an
d P
rovis
ion
ing
Infrastructure
Platform
Service Catalogue
Securi
tyG
overn
ance
Partners
IAAS
PAAS
SAAS
Development Community
Managem
ent
Customers
Storage Database
Disaster Recovery
Virtualisation Servers
Network Backup
MiddlewareDevelopment
ToolsOperating Systems
MTN SERVICES
Call Center
Mobility Connectivity Bandwidth
Internal Applications
Cloud Applications
Kiosk Store
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Service catalogue examples
Productivity
Communication
Customer Mgt
Enterprise Resource Planning
Finance
Security
OA
Collaboration Portal
Document Management
Process Designer
IP TelephonyUnified Comms
CRMReport
DesignerSubscriber Analytics
SAP Oracle Payroll HR
Accounting
Firewall Backup
Desktop
Procurement
Logistics
Sales Force Applications
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Cloud capability differentiators
Devices
Banking and payments
Telecoms
Mobility
Data Center Hosting
On site technical support
Networking
Reporting
Auditing
SLA Management
Monitoring
Service Desk
SecurityMTNSA
3rd Party Service Offerings
Eg. Health, insurance, education, finance, CRM, ERP, Collaborationetc…
BundledService Offerings
Eg. Hosted PBX with SIM,s, devices, laptops, printers, CRM ‘lite’, Collaboration
MTN Service Offerings
Eg. Virtual servers, storage, backup, application, platform, other white-labeled services
Corporate
SME
Consumer
CUSTOMERS
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Mobile ICT ecosystem
Gearing
the
Organisation
Consolidated Self-service
Convergent Charging Platform
M2M Offerings
• Datazone for off peak rates
• Improve APN service Offering
• M2M Policy control
M2M
Mobile Payments
• App Stores, micro payments
• NFC• STD Bank
M Commerce
Hosted Mobile
• HPBX• Mi-Cloud• Cloud
Computing
Cloud
Network as a Service
• One API compliant network API’s
• Developer Support
• SDP
NaaS
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Long term approach supported by focus on sustainability
• Establish national networks to penetrate deeper into individual markets.
• Invest in fibre networks and international submarine cable connectivity
• Key focus on quality service delivery and driving of efficiencies
• Strong corporate social investment - app 1% of profit (e.g. 1GOAL initiative, 13 MTN Foundations)
• Drive for sustainability (Carbon footprint ) through innovation sustainable solutions (e.g. Tri-Gen Plant)
Thank you
Notice
The information contained in this document has not been verified independently. No representation or warranty express or implied is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Opinions and forward looking statements expressed represent those of the Company at the time. Undue reliance should not be placed on such statements and opinions because by nature, they are subjective to known and unknown risk and uncertainties and can be affected by other factors that could cause actual results and Company plans and objectives to differ materially from those expressed or implied in the forward looking statements.
Neither the Company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (based on negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation and do not undertake to publicly update or revise any of its opinions or forward looking statements whether to reflect new information or future events or circumstances otherwise.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
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