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MTN Nigeria Records Further Revenue Decline in Q3 of 2016

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MTN Nigeria reported a smaller revenue decline in the quarter ended 30 September, as subscriber numbers continued to recover in the West African country.

After reporting a year-on-year decline in revenue in the first and second quarters of 2016 of 6.2% and 3.3% respectively, in the third quarter MTN Nigeria’s revenue decline was limited to 1.2% year-on-year.

The group says it is confident MTN Nigeria will deliver positive year-on-year revenue metrics in the fourth quarter. In Nigeria, constant currency data revenue increased by 6.7% and contributed 20.4% to total revenue.

“Despite a tough operating environment as a result of weaker macro-economic conditions, particularly in oil-dependent economies, as well as the regulatory challenges experienced, we are confident the fundamental changes implemented over the past year position the group well to participate efficiently and effectively in the data evolution and ensure sound stakeholder relationships and governance processes,” Phuthuma Nhleko, MTN Group executive chairman says in a statement.

“This is largely the result of a weaker macro-economic environment negatively impacting consumers, a decline in the effective data tariff because of competition and regulatory requirements impacting out-of-bundle billing.”

In SA, data revenue increased by 15.1% year-on-year and contributed 34.4% to total revenue.

The number of smartphones on the SA network also increased by 9.3% year-on-year, to 9.2 million. Average revenue per user increased by 10.4% quarter-on-quarter.

Nigerian data traffic increased by almost 44% year-on-year and the MTN Nigeria network saw the number of smartphones on the network increase by over 59% to 19.2 million year-on-year.

Nhleko says MTN is pleased to report it has commenced the repatriation of cash from MTN Irancell to the group and expects to conclude the process over the next six months.

MTN Irancell’s constant currency data revenue increased by over 61% quarter-on-quarter and contributed 41.5% to total revenue despite a decrease in data tariffs. The number of smartphones on the Iranian network increased by 35% to over 29 million.

MTN says it also embarked on a material transformation project during the third quarter, focusing initially on its key operations of Nigeria and SA.

“A dedicated transformation office was established to drive this transformation to maximise revenue growth, enable a distinct customer experience and ensure operational efficiencies, including concerted initiatives to drive optimal return on investment, with hard targets set for the next 12, 18 and 24 months.”

Nhleko says the operations are expected to deliver the first results on clearly defined targets in the first half of 2017.

MTN grew its group subscribers by 0.9% quarter-on-quarter to a total of 234.7 million, as Nigeria’s numbers recovered slightly despite a small drop in subscribers in SA.

MTN South Africa reported a marginal decline in subscribers of 0.5% quarter-on-quarter to 29.7 million. This was as a result of a 0.7% decline in the prepaid subscriber base to 24.5 million, largely due to churn from low revenue-generating customers. The postpaid subscriber base, however, increased by 0.7% to 5.2 million.

The rest of the SEA region – which includes Uganda, Zambia, Rwanda, Botswana (joint venture), Swaziland (joint venture) and South Sudan – saw the number of subscribers increased by 1% to 23.3 million. This was mainly driven by growth of almost 3% in Uganda, which now has 10.2 million customers.

MTN Nigeria reported a 2.5% quarter-on-quarter increase in its subscriber base to 60.5 million. The rest of the WECA region – Ghana, Cameroon, Ivory Coast, Benin, Congo Brazzaville, Liberia, Guinea Conakry and Guinea Bissau – saw overall subscriber numbers grow by 2.3% to 47.6 million. This was driven by 2.7% subscriber growth in Ghana to 18 million, and 3.7% growth in the Ivory Coast to over 8.5 million subscribers.

MTN Irancell increased its subscriber base by 1.1% quarter-on-quarter to 47.8 million “in a highly penetrated market”. However, the rest of the MENA region – made up of Syria, Sudan, Yemen, Afghanistan and Cyprus – saw subscriber numbers drop by almost 4%, to 25.8 million, owing to a 13% decline in Sudan due to the subscriber registration process.

SEA has 52.9 million subscribers; WECA remains the largest contributor with over 108 million subscribers while MENA has 73.6 million customers.


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Google fires 28 employees involved in protest over $1.2B Israel contract

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Google has fired 28 employees who participated in a 10-hour sit-in at the search giant’s offices in New York and Sunnyvale, California, to protest the company’s business ties with the Israel government.

The pro-Palestinian staff at Google had donned traditional Arab headscarves as they stormed and occupied the office of a top executive in California on Tuesday, April 16.

They were fired late Wednesday, April 17, after an internal investigation, Google vice president of global security Chris Rackow said in a companywide memo.

“They took over office spaces, defaced our property, and physically impeded the work of other Googlers,” Rackow wrote in the memo.

“Their behavior was unacceptable, extremely disruptive, and made co-workers feel threatened.”

In New York, protesters had occupied the 10th floor of Google’s offices in the Chelsea section of Manhattan as part of a protest that also extended to the company’s offices in Seattle for what it called “No Tech for Genocide Day of Action.”

“Behavior like this has no place in our workplace and we will not tolerate it,” Rackow wrote.

“It clearly violates multiple policies that all employees must adhere to – including our code of conduct and policy on harassment, discrimination, retaliation, standards of conduct, and workplace concerns.”

Rackow added that the company “takes this extremely seriously, and we will continue to apply our longstanding policies to take action against disruptive behavior – up to and including termination.”

The fired staffers are affiliated with a group called No Tech For Apartheid, which has been critical of Google’s response to the Israel-Hamas war.

The impacted workers blasted Google over the firings in a statement shared by No Tech For Apartheid spokesperson Jane Chung.

“This evening, Google indiscriminately fired 28 workers, including those among us who did not directly participate in yesterday’s historic, bicoastal 10-hour sit-in protests,” the workers said in the statement.

“This flagrant act of retaliation is a clear indication that Google values its $1.2 billion contract with the genocidal Israeli government and military more than its own workers — the ones who create real value for executives and shareholders.”

“Sundar Pichai and Thomas Kurian are genocide profiteers,” the statement added, referring to Google’s CEO and the CEO of its cloud unit, respectively.

“We cannot comprehend how these men are able to sleep at night while their tech has enabled 100,000 Palestinians killed, reported missing, or wounded in the last six months of Israel’s genocide — and counting.”


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Imperative of Upholding Nigeria’s Telecoms Lifeline  

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By Ikemesit Effiong    

It is neither profound nor insightful to state that Nigeria is living through a near-unprecedented cost-of-living crisis.

Imperative of Upholding Nigeria's Telecoms Lifeline  

Aminu Maida, executive vice chairman, NCC

Core inflation touched 33.2% in March with food inflation now an eye-watering 40% – the highest in post-1999 democratic Nigerian history.

It may sound a bit apocalyptic but we are heading towards our all-time high of 47.6% recorded in January 1996.

We have already burst past March 1996’s reading of 31.7%. In a note on future inflationary trends in Nigeria, Aaron O’Neill at Statista made two salient points: our inflation has been higher than the African average for more than a decade now and a significant decrease is unlikely for quite some time.

The International Monetary Fund’s expectation that annual inflation this year will average out at 22.96% is increasingly looking a tad too optimistic.

The bigger challenge though, in his view, is our inflation’s unsteadiness. Food inflation is now at levels not seen since August 2005.

Plantain prices have increased by 129%, rice by 98%, onion prices by 97%, bread by 71% and beans by 64% – between January 2023 and January 2024 alone according to the National Bureau of Statistics.

An inflation rate that is all over the place is usually a sign of an economy that is huffing and puffing, causing prices to fluctuate, and unemployment and poverty to increase.

Nigeria’s economy – a mixed economy where state participation in economic life is higher than most free-market economies – is not entirely in bad shape.

More than half of its Gross Domestic Product (GDP) is generated by the services sector – chiefly telecommunications and finances, typically a feature of advanced economies.

Notwithstanding, the private sector is teetering.

The Financial Times reports that Nigerian Breweries (NB), which is part-owned by Heineken, has increased prices three times this year.

“So dire is the economic distress in Africa’s most populous nation that the brewer’s chief executive, Hans Essaadi, complained on an investor call that “customers can no longer afford Goldberg, a cheap and well-loved lager,” the London-based publication highlighted this as illustrative of the travails of some of the country’s biggest corporates.

Fixed foreign currency-denominated costs, import restrictions, uncertain policy-setting, a weak Naira and insecurity in many operating areas have forced most like NB to raise prices; some like Procter & Gamble to quit manufacturing in-country or others like GSK and Bayer to contract third parties to distribute their products.

There is one sector, however, that has seen little action in this direction.

The Imperative of Telecom Tariff Revision

At the nexus of connectivity and commerce, the telecommunications industry in Nigeria plays a dual role: as an economic engine and a societal enabler.

The sector’s investment profile in the country stood at $75.6 billion as of 2021, according to the Nigerian Communications Commission (NCC). Nigeria’s 221.7 million active voice subscriptions and 160.2 million data subscriptions now support a substantial 14% of GDP.

The country’s rising teledensity is such a critical linchpin for economic growth and infrastructural development that any disruptions exact a heavy price.

A 2021 SBM Intelligence survey found that 53% of respondents were “very” negatively impacted by an NCC-mandated shutdown of telecom services in the North-West due to regional security operations.

Moreover, the sector stands as a significant employer, empowering millions of Nigerians with opportunities for livelihood and advancement.

As such, the industry’s health is not merely a matter of corporate profit margins but a national imperative intertwined with the fabric of its progress.

Central to the sustenance of any industry is a conducive economic environment that allows for sustainable growth and innovation.

However, the existing regulatory framework, which shackles tariff adjustments, undermines this fundamental principle.

While other sectors have adeptly responded to economic fluctuations by revising prices, the telecom industry remains bound by regulatory constraints, impeding its ability to adapt to changing market dynamics.

A Perfect Storm: Challenges Hinder Growth      

While Nigeria’s four Mobile Network Operators (MNOs) relentlessly strive for service excellence through consistent network upgrades, their efforts are stymied by environmental and infrastructural obstacles.

Frequent fibre optic cable cuts due to road construction and vandalism; multiple taxation, coupled with the ever-present challenge of acquiring rights-of-way including charges related thereto, act as significant impediments.

These issues, further compounded by exploitative rent-seeking practices, have long plagued the industry, defying resolution despite concerted efforts.

These challenges are not lost on key stakeholders like the Nigerian Communications Commission (NCC), the Ministry of Communication, Innovation & Digital Economy, and a well-informed consortium of governmental and media entities.

MNOs have proactively engaged through media platforms, highlighting these issues and advocating for urgent government intervention.

The industry’s push for Critical Infrastructure Protection for ICT/Telecommunications and the reduction of exorbitant right-of-way (RoW) charges exemplify this proactive approach. Katsina, Nasarawa and Zamfara now lead the country in eliminating RoW charges but much of the country remains an operational nightmare for MNOs.

The Unsustainable Squeeze: Rising Costs, Stagnant Tariffs                         

Despite the advent of GSM technology 23 years ago, a disquieting public perception persists – that of consistently poor Quality of Service (QoS).

While this perception may have elements of truth, it’s crucial to recognise the mitigating factors beyond the control of the operators.

Economic hardship has led to an exponential increase in the cost of all consumer goods and services, with a glaring exception: telecommunication services.

The reason? Price regulation by the NCC.

This price stagnation stands in stark contrast to the reality faced by MNOs.

The industry is heavily reliant on foreign exchange (FX) for crucial equipment and services.

Most telecommunication equipment are imported with the absence of local alternatives as there are primarily four to five core manufacturers of telecommunications equipment and none is situated in Nigeria, or even Africa.

The depreciation of the Naira has significantly inflated operational costs, further straining already tight profit margins. It is unsustainable to expect ever-increasing network investments in the face of frozen tariffs.

The Current State of Play            

Nigeria’s approach to setting tariffs in the telecommunications sector has evolved through a combination of regulatory frameworks, market dynamics, and economic considerations.

During the industry’s transformation in the early 2000s with the issuance of licenses to private operators, tariff regulation was crucial in ensuring consumer protection and promoting fair competition.

The NCC implemented tariff guidelines to prevent anti-competitive practices and safeguard consumers from excessive charges. Tariff regulation also aimed to balance the interests of consumers with the need for MNOs to generate revenue for network expansion and improvement.

For an industry in its infancy striving to offer Nigerians access to new forms of technology and communications, it was necessary to guide pricing to enhance market adoption.

Competition added extra pressure on prices, a wealth of choices ultimately benefiting the consumer. Through it all, the margins were sufficient to incentivise operators to carry out the most extensive investment rollout in Nigerian history.

The market is more mature now and the booming economy of the 2000s is a fading memory.

Mobile phone, and broadband penetration are now at over 100 and 40% respectively, while the entire country is practically covered by 3G and 2G.

The digital economy with the immense success of content creators, e-commerce, software education, financial inclusion, cross-border freelancing and social connectedness has been built on the back of the telecom industry’s investment priorities.

The cost of providing existing services, the competitiveness required to sustain the continued rollout of 4G and eventually 5G technology and wider market dynamics have meant the current tariff structure is less a cushion for customers and more a shackle for operators.

The Path Forward: Rethinking Tariffs                    

In advocating for tariff revision, it is imperative to contextualise the industry’s plight within the broader narrative of economic sustainability and national progress.

Urgent measures must be taken to safeguard an industry that serves as a catalyst for economic growth and societal empowerment.

Tariff revision is not merely a corporate prerogative but a strategic imperative essential for the industry’s survival and a calculated investment in Nigeria’s future.

The additional revenue generated will directly translate into network infrastructure upgrades and modernisation. This translates to tangible benefits for all stakeholders.

A conducive regulatory environment is important in fostering the telecom industry’s resilience and vitality. Responsible government policies that prioritise infrastructure protection and investment incentives are indispensable in fortifying the industry’s foundations. Moreover, enhancing the operating environment for telecoms is not only in the national interest but also a catalyst for attracting Foreign Direct Investment (FDI) essential for sustainable growth.

Many may argue that reviewing tariffs at a time of stagnant wages, decreasing investments and rising prices is unreasonable but ensuring the long-term viability of a critical industry requires a collaborative effort. Regulators need to consider a data-driven and transparent tariff review that reflects the economic realities faced by the sector.

Aminu Maida, the NCC’s Executive Vice-Chairman rightly told the Nigerian Information Technology Reporters Association (NITRA) in February that customers expect excellent quality of service and operators will be held accountable for poor service delivery. Indeed, customers deserve the best possible service, and operators, going by the billions of dollars in present and future investment commitments, appear dedicated to delivering it.

A sustainable and well-regulated telecoms sector is the cornerstone of achieving this shared vision. It starts with rethinking how much operators are allowed to charge their clients.

Effiong is a legal practitioner, Partner and Head of Research at  and Chairman of the Technology Committee of the Nigerian Bar Association Section on Business Law.

 

 


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Samsung Returns to Top of The Smartphone Market – Industry tracker

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Samsung regained its position as the top smartphone seller, wresting back the lead from Apple as Chinese rivals close the gap on both market leaders, industry tracker International Data Corporation (IDC) reported Monday.

South Korea-based Samsung overtook Apple as worldwide smartphone shipments grew nearly 8 percent in the first quarter of this year to 289.4 million, IDC said, citing its preliminary data.

It was the third consecutive quarter of growth in the global smartphone market, signalling that a recovery from a slump in the sector is underway, according to IDC.

IDC Worldwide Mobility and Consumer Device Trackers team vice president Ryan Reith expected top smartphone companies to gain share and small brands to struggle for position as recovery progresses.

Samsung shipped 60.1 million smartphones in the first quarter of this year, claiming nearly 21 percent of the market, according to IDC figures.

Apple shipped 50.1 million iPhones, garnering just over 17 percent of the market in the same period, IDC reported.

Apple smartphone shipments were down 9.6 percent in a quarter-over-quarter comparison, while Samsung shipments slipped less than one percent, according to the market tracker.

Meanwhile, China-based Xiaomi saw shipments grow about 33 percent to 40.8 million and Transsion about 85 percent to 28.5 million, taking third and fourth positions in the overall smartphone market, IDC reported.

“While Apple managed to capture the top spot at the end of 2023, Samsung successfully reasserted itself as the leading smartphone provider in the first quarter,” Reith said.

IDC expects Samsung and Apple to maintain their hold on the high end of the smartphone market while Chinese competitors seek to expand sales, according to Reith.

Nabila Popal, research director with IDC’s Worldwide Tracker team, said: “There is a shift in power among the Top 5 companies, which will likely continue as market players adjust their strategies in a post-recovery world.

“Xiaomi is coming back strong from the large declines experienced over the past two years and Transsion is becoming a stable presence in the Top 5 with aggressive growth in international markets.”

AFP


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