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MTN’s Record Fine, Others to Shape 2016

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Gareth Mellon, ICT Programme Manager at Frost & Sullivan Africa provides a run-down of the top six technology trends to watch in Africa as we edge closer to 2016.

Accordi to Mellon, while MTN Nigeria’s massive fine has naturally attracted the most attention, regulators in Kenya and Uganda have also imposed recent penalties, and the fall-out from each of these points to the potential impact that both the government and regulators have on the telecommunications market.

1. Public Sector Actors Become more Involved
As governments increasingly see connectivity as a critical means to encourage economic growth, we can expect them to become more involved in the market, helping to stimulate telecommunications investment in some cases, but also threatening to add increased uncertainty in volatile markets.
While MTN Nigeria’s massive fine has naturally attracted the most attention, regulators in Kenya and Uganda have also imposed recent penalties, and the fall-out from each of these points to the potential impact that both the government and regulators have on the telecommunications market.
As debates concerning the allocation of spectrum, the implementation of national broadband plans and the provision of eServices continue unabated (not forgetting, of course, the constant delays in digital migration), expect the role of public sector bodies to become even more influential.

2. Fixed-Line Makes a Comeback
While technically not a ‘comeback’ in many African countries, where fixed-line hardly got out of the starting blocks, demands for fibre connectivity have soared.
Across the continent, submarine cables have boosted international connectivity and, while terrestrial coverage remains a challenge in most countries, investments in fibre backhaul and access layers have picked up.
As this proliferation continues, high capacity last-mile access is becoming more viable and FTTX services have become established in key markets such as Kenya, Nigeria, and South Africa.
While individual services remain relatively expensive for early-adopters, ongoing investment will lead to price reductions, making fixed-line more attractive for both businesses and consumers.

3. Industry Consolidation to Meet Infrastructure Costs
Etisalat’s recent acquisition of a majority stake in Maroc Telecom means that five major multinational operators now account for more than 60 percent of all telecommunications subscribers in Africa.
Consolidation in the telecommunications market is driven by a desire for scale to help overcome margin pressures.
The provision of network infrastructure is enormously costly and all operators have been subjected to the worrying reality of increasing infrastructure costs versus declining average revenue per user (ARPUs). With increased pressure on operators to provide LTE services – which requires further investment in existing infrastructure – Frost & Sullivan expects this drain to continue.
While large-scale mergers typically attract most of the attention, it is also worth noting changing market dynamics as smaller telecommunications players find it increasingly difficult to remain competitive.
South Africa’s Cell C has made headway in claiming some portion of the market from the two dominant players, but its sustainability remains questionable.
Meanwhile, mutterings in Kenya point to Orange’s troubles in achieving profitability in a market dominated by Safaricom.
 And, across the continent, even start-ups promoting new technologies (LTE or fibre for example) struggle to break the dominance of the big players reflecting how difficult it remains for late-entry operators to establish any kind of foothold. 

4.Content is King in the Battle for access to Customers
The other driver of telecommunications consolidation concerns the battle to retain access to customers. In the customer’s eyes, the question is now: “Who can provide me with the best access to everything I need?”
And, while operators currently occupy an enviable position in this respect, other telecommunications providers – including hardware providers, device manufacturers, and OTTs – are all seeking to offer aggregation services.
The key differentiator will be content –in particular high-demand content – whether it is local or global, live or recorded. DStv remains the undisputed leader in content distribution across Africa, but its dominance is being challenged by the growth of alternative channels such as fibre to the home (FTTH) and 3G or 4G.
Over the past year, the battle lines have been drawn in key markets such as Kenya, Nigeria and South Africa, and the first casualties have already been incurred.
The year 2016 will quickly reveal which services are critical to customer requirements and, ultimately, how profitable they can be.

5. Telcos showcase digitalisation
Typically, telecommunications distinguish between their consumer and enterprise offerings, and the latest fad in the enterprise market is digitalisation; identifying all areas of a business that can be transformed by ICT in order to offer integrated and enhanced products and services.
The starting point will be to show how connectivity can improve profitability in sectors as diverse as oil exploration, agri-processing, and the clothing industry; but expect ICT providers to start positioning themselves as complete, end-to-end partners with the ability to transform their clients into digital pioneers.

Machine learning will be critical to this implementation, but watch out for other buzzing terms similar to wearables, the sharing economy and the blockchain.

6.  The Mobile Payments ecosystem Expands
Africa has been the birthplace of mobile payments and one cannot ignore this key feature of the ICT landscape on the continent. In 2016, we can expect growth in three areas.
Firstly, while Kenya is often cited as the forerunner in mobile payment proliferation, this leadership is anticipated to be challenged by countries like Tanzania, Zimbabwe and Zambia, all of which have experienced significant growth in mobile payments.
Secondly, while peer-to-peer transactions currently account for three quarters of all payments, other areas such as merchant payments and international remittances should show healthy adoption, expanding the broader mobile payments ecosystem.
Finally, operators and banks have typically spearheaded mobile money development, but there are a growing number of actors seeking to grab a share of the market. The most prominent amongst these are the major Internet players; namely Google, Facebook, and Apple who, although not necessarily established in Africa, are leveraging their communication platforms to obtain access to customer’s wallets.


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NIA Questions Legality of Reps’ Financial Probe

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The Nigerian Insurers Association has urged the House Committee on Capital Market and Institutions to respect the constitutional separation of powers as it carries out a probe on over 20 insurance firms.

In a statement on Tuesday night, the Director General/Chief Executive Officer of NIA, Mrs Bola Odukale, said the decision of NIA and the affected firms to approach the court was to seek clarity on the constitutional limits of the House Committee’s probe.

It would be recalled that the House of Representatives on Monday is investigating no fewer than 25 insurance companies operating in the country for various financial infractions spanning financial reporting, claims settlement, premium remittance, and issuance of policies.

The Chairman, House Sub-Committee on Capital Market and Institutions, Kwamoti Laori, during a meeting with the management of the insurance companies at the National Assembly Complex in Abuja, said the meeting was convened following the receipt of a petition on infractions by the insurance companies.

In the statement, Odukale said, “The Association wishes to state unequivocally that all actions taken by the NIA and the affected member companies in response to the Committee’s invitations and pronouncements were based entirely on legal advice by its Solicitors. It was on the firm instruction of legal counsel that recourse was made to the courts.

“The objective of approaching the Court is to seek judicial guidance on the legality, propriety, and constitutional limits of the Committee’s intervention in order to safeguard institutional integrity, uphold regulatory independence, and ensure that legislative oversight remains within the bounds of law.

“The Court action seeks to determine whether the current posture of the Committee reflects an exercise of legislative judgment, which, by constitutional design, is the exclusive province of statutory regulators, such as the National Insurance Commission, Securities and Exchange Commission, Nigerian Exchange, Financial Reporting Council, Nigeria Data Protection Commission, and the National Information Technology Development Agency.

“This raises serious questions about legislative overreach and an erosion of the doctrine of separation of powers, a cornerstone of Nigeria’s constitutional democracy.”

Odukale maintained that the NIA was committed to lawful and constructive engagement with all arms of government, provided that such engagement respects the autonomy of statutory regulators and the boundaries established by the Constitution.

“The NIA will continue to provide its full support to all member companies while upholding the principles of legal compliance and sector-wide integrity,” Odukale concluded.

17 of the companies that went to court were represented by their lawyer, Mr Abimbola Kayode, at the meeting with the committee.


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Horn of Africa Leaders Seek Enhanced Digital Integration for Increased Regional Growth

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Finance ministers and development partners from the Horn of Africa have called for enhanced digital integration to boost trade, drive economic growth and promote regional stability during the 25th Ministerial Meeting of the Horn of Africa Initiative (HoAI).

Held in Nairobi, on July 14, the meeting was co-chaired by the African Development Bank’s Vice President for Regional Development, Integration and Business Delivery, Nnenna Nwabufo and Somalia’s Minister of Finance, Bihi Iman Egeh. Discussions underscored the critical role of digital integration in reducing trade barriers, boosting government service delivery and creating employment — particularly for the region’s youth.

“Digital technologies are shaping today’s economy and tomorrow’s industries. By embedding these technologies into our programs, we can not only improve inclusion but also leapfrog outdated development models,” said Nwabufo.

She called for digital integration a “central enabler” in each of the Horn of Africa Initiative’s pillars – trade, infrastructure, resilience, and human capital,

Learning through experience

Drawing from global and regional success stories, speakers highlighted the transformative potential of technology-led development. The ministers pointed to the Philippines as a strong example, where ICT has generated millions of jobs in business process outsourcing. Similarly, Kenya’s fintech innovation—especially the success of M-PESA—was cited as a model for scaling digital financial services across the region.

Participants urged governments to proactively foster digital ecosystems by capitalizing on the demographic dividend, identifying infrastructure upgrades, tighter regulatory reforms, and digital skills trainings as priorities to enable broader participation in the digital economy.

Minister Egeh reiterated the need for more coordinated regional efforts to create the enabling environment required for accelerated digital integration and expansion. He referenced the HoAI Digital Policy Matrix, adopted in 2023 which provides a blueprint on how to address key obstacles to achieving effective digital integration across the region.

Barack Makokha, Kenya’s Cabinet Secretary for National Treasury, underscored the importance of regionally-aligned public private partnerships and advocated for blended financing to reduce investment risk and expand digital access in underserved areas.

World Bank Vice President for Eastern and Southern Africa, Ndiame Diop, called for a comprehensive multi-pronged approach, combining cross-border coordination, large-scale financing, robust policy support, and digital infrastructure investments. He pointed out that such measures could transform digital integration into, “a powerful engine of economic transformation” for the Horn of Africa—ensuring no one is left behind in the digital era.

The meeting concluded with a shared recognition that sustained political will and the determination to implement a multifaceted approach are essential to unlocking the region’s economic potential and driving long-term growth.

The event also welcomed observers from the East African Community, Agence française de développement, and Shelter Afrique, reflecting strong regional and international backing for the HoAI in the development community.


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CSCS Inaugurates Custodian Portal to Enhance Digital Access, Operational Efficiency

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Central Securities Clearing System Plc (CSCS), Nigeria’s capital market infrastructure provider, has launched its Custodian Portal, a user-centric digital solution designed to optimise custodian operations through intuitive, secure and efficient features.

Haruna Jalo-Waziri, Chief Executive Officer (CEO), CSCS, announced this in a statement on Monday.

The CSCS is a Public Limited Company with a diversified shareholder base, which serves as the Central Securities Depository for the Nigerian Capital Market.

It serves as the Central Depository for Equities, Commercial Papers, Corporate Bonds, Sub-National Bonds, certain Sovereign Bonds like the FGN Sukuk and the FGN Savings Bond, Equity-traded Funds, Real Estate Investment Trusts, Mutual funds and Commodities.

Jalo-Waziri said that the custodian portal offered a streamlined experience for market participants with powerful tools that facilitate comprehensive portfolio and trade management, document tracking, share transfer operations, client symbol search, and real-time access to vital data.

He explained that the portal, designed to operate through a flexible subscription-based model, empowered users to manage their records effortlessly and securely through convenient payment channels such as GTPay and Paystack.

According to him, “Digital transformation remains at the core of our strategy to enhance the efficiency, transparency and accessibility of Nigeria’s capital market services.

“The custodian portal is a significant leap in that direction, offering custodians a centralised platform to manage critical processes in real-time.

“We are excited about the value this innovation brings to our stakeholders, and we will continue to evolve the platform in line with users’ needs and industry trends.”

The CEO also explained that the portal was designed with user experience in mind with feature tools like portfolio viewing and downloads in PDF or Excel format.

He further said that it also featured tracking of stock movements across date ranges, inbox messaging and request tracking, as well as robust user management capabilities including role assignment and status tracking.

Similarly, the Divisional Head, Business Technology and Digital Innovation, CSCS Plc, Tobe Nnadozie, said that the portal aligned with CSCS’s drive to automate the market.

“In addition to the normal features, the platform is a part of an omnichannel platform for custodians, and includes API services.

“It also connects to the market-wide workflow, which CSCS has built to ensure secured communication and approvals across all major stakeholders in the market.

“The platform is well secured with best-of-breed cybersecurity solutions and our SOC,” he said.

The Custodian Portal reinforces CSCS’s commitment to leveraging technology to streamline back-office functions and support a more agile, data-driven capital market ecosystem.

All custodians in the Nigerian capital market have now been successfully on-boarded on the Custodian Portal, marking a significant milestone in CSCS’s ongoing drive to enhance collaboration, standardise operational processes, and promote digital adoption across the market.


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