Wednesday, 7 November 2018

MTN sees future in 3G

I blogged about MTN last year after their presentation at Facebook's TIP Summit. This year again, another MTN Group executive, Babak Fouladi, Technology and Information System (Group CTIO) at MTN delivered an insightful talk. I have my summary below with video embedded at the end.


MTN has 223 million subscribers. Out of that only 72 million are data users, the rest are primarily voice users. The problem with that is their monthly spend is very low.


The typical entry and emerging segment customers in rural areas spend 30% of their incomes on food and often have limited access to reliable basic services. Its very tricky to convert these users to use high amount of data or any data at all in many cases.

5 Challenges known as CHASE need to be overcome to reach the volume segment. These are:

  • Coverage: Data Coverage is insufficient in rural or low income areas and costly
  • Handsets: Limited affordability and access to data enabled devices
  • Affordability: Data services are unaffordable in some markets
  • Service Bundling: Bundling and selling of data are unnecessarily complex and not regionally relevant
  • Education: Lack of digital literacy & awareness of the potential of broadband content

To overcome these challenges, a dual data strategy is needed. Newer technologies, ultra high speed & superior customer experience for high value segment. Ubiquitous low cost data coverage for volume segment.
There are many rural coverage barriers. These practical challenges hinder the rollout. The main being that there is no infrastructure in place, the roads are inaccessible, there is no power, the security is poor, etc.
To solve the challenges due to rural coverage barriers, MTN has defined three solution categories for rural:

  1. Rural Site - 50 to 100 km from urban
  2. Ultra Rural Site - Very low population densities locations
  3. Ultra-ultra Rural Site - Very small remote villages

MTN are already doing field trials with AMN and Huawei. With Huawei, they are using the RuralStar (see earlier post here). Other vendors listed above are working with them in the labs and will be trialed for Ultra and Ultra-ultra rural sites.

Their main motivation for working with Facebook and TIP is to find affordable solutions for Ultra and Ultra-ultra rural locations. There is a large scale trial happening soon in 2 countries, 120 sites in total.
One of the challenges in African market is that the average lifespan of handset is 7 years. What this means is that many people still on 2G today will be migrating to 3G in near future. As a result, 3G will be the most dominant technology in Africa in 2025.

While most operators and vendors are focusing on 4G and 5G, there is still going to be a big market for 2G and 3G in 2025. These users cannot be ignored and the operator that serves them well will eventually be the winner.



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