Mobile giant MTN is set to sign a $3 billion (N470b) loan with a consortium of banks.
The telecom operator said in an invitation to the ceremony that the medium-term facility will be signed today. MTN officials declined to give details of which banks are involved or what the money is to be used for.
MTN has been borrowing to upgrade its network in Nigeria, as competition hots up in its most lucrative African market.
Bukola Afolabi recently had an encounter with Wale Goodluck, Executive Director, MTN Nigeria, where the telecoms expert talked about the challenges the sector has experienced with infrastructure development, achieving set goals and network modernisation
Quality of service in the telecom sector has been a hot button issue since 2001. Why is the problem so intractable?
I think the issues around quality of service borders on two things: one, there isn’t enough capacity; and secondly the availability of that capacity. The issue of capacity essentially lies in the hands of the operators. It is for us as operators to get a good understanding of the demand and put in the capacity to meet that demand. The good news is that operators have the resources to install the required capacity but the reality is that it is extremely difficult to put infrastructure in the ground in our environment. The same sorts of infrastruture challenges that have bedevilled the power industry also affect the telecomunications industry. Telecoms infrastructure cannot exist in vacumm and there has to be parallel growth in other sectors for the full realisation of the benefit of increased rollout.Beyond that, when we are even able to put the infrastructure in the ground, the challenge then becomes making it available to carry traffic. The litmus test is then to ask if that additional capacity is available to relieve the congestion in the network. We are finding ourselves in a situation where operators are building base stations, integrating them into our networks, but because of circumstances beyond our control, that infrastructure is not carrying traffic. And if that infrastructure is not carrying traffic, it is not relieving congestion. Then we begin to see the challenges in terms of quality of service. Definitely, customers’ experience will be very sub-optimal.
When you say they are not carrying traffic, what exactly do you mean? Why are they not carrying traffic?
When you are building a network, you need to make that network available to carry traffic. It needs to be integrated; it needs to be carrying traffic, and subsequently relieving congestion. We find ourselves in a situation where, because of a lot of extraneous circumstances, a lot of infrastructures are not carrying traffic for no fault of the operators. If you look at the North-East, we have about 200 base stations that are not available to carry traffic today because of the problem of insurgency, and the attacks on our base stations. We also have a lot of base stations that are sealed up by different agencies of government. Again, this is contributing to lack of capacity. Then, you have the day-to-day problems like community lock outs, area boys’ agitations, etc. All those things are also negatively impacting networks. I would say in a nutshell, those are the two major factors impacting quality of service, and we need all stakeholders to resolve those issues.
Looking at MTN specifically, what are the major challenges hampering your efforts to achieve your set goals in the area of quality of service?
It’s a challenging environment, but I dare say that to whom much is given, much is expected. As the biggest operator in Nigeria today, in fact, the biggest operator in Africa today in terms of subscriber number, there are a lot of expectations from our subscribers, our regulator, legislators, our friends in the media and other stakeholders about the quality of service. Nigerians are tired of excuses, and they want good quality. Asides from the things I spoke about earlier on, we’ve seen in this market in the last 18 months, a significant reduction in tariffs. This, coupled with all sorts of promotions, has led to a greater demand for our services. So we have seen minutes of use go up as a result of tariffs coming down. People are talking a lot more and it means that we require a lot more capacity to deal with that. I think that perhaps some of the competition has been a little exuberant and there is need for the industry to self-regulate and ensure that as the industry chases subscriber number, we do not mortgage quality. So we find that the way prices have come down in the last 18 months has also led to greater demand and as such we are having to play catch-up all the time.There is work for everybody, including the regulator, to ensure that the business environment or the competitive environment is a lot saner so that we can preserve the long term sustainability of our industry.
Let’s go back to the issue of non-availability of infrastructure. Can we put a figure to the facilities not currently engaged in the MTN network?
The effect of the attacks we suffered in the north is two-fold. One, there were sites that were directly attacked and destroyed. And then, some of those sites have dependent sites. So if it is a hub site that has gone down for instance, it means that all the other sites relying on that for their microwave transmission will also go down. They will be blind to the network. They will be unavailable to carry traffic. You will not be able to terminate traffic into the communities they serve. Off the top of my head, I can tell you that at the peak of the insurgency attacks, we probably had up to 450 or 500 base stations that were thrown out of the network. Now, this has a major impact on the quality of service. And also, because people are investing resources and those resources are not generating any revenue, it puts your business model in jeopardy. It also means that one, people are cut off from the network. And then there are people who are also trying to reach them, who keep trying and then contribute to further congestion. So it’s a double blow.
Let’s look at the network modernisation project that MTN is implementing. How is it going?
I’d say it’s going quite well. Of course like any other major project, it has run into a few hitches here and there. We set out to do about 5,500 base stations. I would say that today, we have close to 4,700 that have been modernised and upgraded. We are in the last quarter of the project now. We envisage that we will be done in a couple of months, barring any unforeseen circumstances.
You announced that about $1.3 billion would be spent on the MTN network last year. How much of this has been spent?
I am happy to report that we were able to capitalise that entire budget. It was unprecedented in the history of telecommunications in Nigeria for anybody to take that amount of investment and put it in the ground. You are seeing it in the ground in terms of new base stations, in fibre roll-out and a lot of other things. In addition to our budget in 2012, we also had a carryover from 2011, which was about 300million dollars. We were also able to capitalise that. So, looking at 2012, I can say that our capitalisation was close to about $1.65 billion.
What is MTN looking at spending this year?
We will be spending $1.583 billion in 2013. We are going to be building a lot more base stations than we have ever done in the history of this organisation. The numbers are verifiable. We are keeping our regulator updated. We are sharing information as soon as the sites are up with the regulator. We are not a company that counts sites that are in build. We count sites that have been integrated and are carrying traffic. So, it’s fact and figures.
What is MTN doing about local content?
The reality is that nobody can operate in an environment without using local resources. For us as a business, we have also gone beyond patronising people just for the sake of patronising them. We believe that there is significant value-add by using local contractors. They are very competent and able Nigerians. We have worked with a few partners, and as our business has grown, their own businesses have grown tremendously. We see them in different areas of our business- in the areas of network build, information systems, marketing, sales and distribution. We are working with Nigerian partners. Recently, there has been a lot of clamour for more Nigerian participation and local content. I can share with you that while a lot of our competitors have handed over their entire network build to foreign OEMs, (we have also handed over a considerable part to the OEMs, which in this market are typically the Ericssons, Huaweis and ZTE). But what we’ve also done is that a significant amount of the build for 2013 will be done by local contractors, by companies beneficially owned by Nigerians. So there is a lot of value-add in that space. And if you look at a lot of our partners, in the IS space for instance, Computer Warehouse Limited is a company that has grown its business, and I dare say with every sense of responsibility, because of its relationship with MTN Nigeria. Computer Warehouse is now recognised as an African powerhouse in the IS space. These are the sort of things that give us a lot of pleasure.
Do you agree that promotions compound service quality issues?
I would say that in an industry where we don’t have enough capacity, there is a need for us to be a bit more responsible on the kinds of promotions that operators are undertaking. We need to be reasonable and not mortgage quality of service for subscriber acquisition. It’s important that we do not destroy value in the industry. If not, we will end up where the operators in Europe are, or where the operators in India are; whereby a lot of the businesses are on the brink of collapse, or their fundamentals are very weak. And the reality is that when trouble starts in the telecom industry in any part of the world, it has a ripple effect on all the operators; it will impact your vendor cost, it will impact your financing, etc. These are the things that one has to be concerned about. Yes, it is important that operators compete rationally and prevent network degradation.
To solve the problem of sub-par quality of service, what advice do you have for critical stakeholders, especially the government, community residents, industry regulator and customers.
If you look at the challenges that this industry is going through now, and the contributions to the economy, I mean it is imperative for the federal government of Nigeria to take measures to protect the telecommunications industry. One area that jumps to mind is to continue to give the necessary assurance as per the sanctity of investment. We are glad to report that Nigeria is one of the top four destinations for investment now according to KPMG. People are beginning to talk about the MINT countries which are Mexico, Indonesia, Nigeria and Turkey. It is a testimony to the growing recognition of Nigeria and the federal government must continue to provide the necessary assurances to investors that your investments will be protected and contractual obligations will be respected.
What is the status of WACS now?
WACS is live and carrying traffic for MTN and a lot of other operators. A lot of people have both live and redundant capacity on WACS. WACS has delivered on expectations. The Bandwidth pipe coming into Nigeria has increased.
Why has there not been any dramatic difference in Internet experience?
Your bottleneck is not at the WACS end. Your bottleneck is between where WACS terminates on the beach and where you are using Internet service. If we had a situation where all my backhaul was done by fibre and all the base stations were connected by fibre, and then connected to the base station controllers (BSC) by fibre and then to the switch by fibre, the speed would be awesome. Although we are able to land the speed at the beach, to distribute it inland as effectively as we would like remains a challenge.
Given this situation, what would you be saying to the NCC and other stakeholders?
For us to achieve what we are all trying to in the area of broadband, we need a lot of fibre in the ground. We need a concerted effort; NCC to support the operator, to support the private sector to roll out this fibre. We need the involvement of the state and local governments. We need to take away the hand-cuffs and chains impeding roll out of fibre, such as prohibitive right-of-way costs, etc. We need the cost for right-of-way in Lagos or in Kano or any other city in Nigeria not to be more expensive than the cost for the right of way in New York. We need to have affordable fibre in the ground. That will translate to affordable bandwidth and a much better experience.
Would you say Nigeria is enjoying latest technology in the mobile world?
In our industry, yes. In fact, we are probably always at the cutting edge. Because of our volumes here, and the large appetite demonstrated by operators in Nigeria, we are typically being offered best-in-class technology and we are always given top priority in terms of queuing for the latest equipment. What we need to put on top of that is to ensure that we have an environment that can receive the infrastructure, so that we can see the benefit of the latest technology that the operators in Nigeria are deploying.
Some operators have fallen by the wayside, while some are struggling. What would you say is responsible for MTN’s success in Nigeria’s challenging business environment?
I wish I could tell you everything we are doing, but I would be helping the competition. I think the bottom-line is that we took a decision to invest and reinvest, and we haven’t stopped investing. When a lot of people were scared and sceptical about Nigeria, we took the bull by the horns. When some of our competitors were changing ownership regularly, we stayed the course. We are seeing the benefits of the investments that we have made. Today, we have the biggest subscribers, serving in excess of 45 million Nigerians. With that amount of scale, your business will be big. We are also a very frugal and prudent organisation. In the first five years of MTN Nigeria, we took a decision not to externalise any dividend. So no shareholder got any dividend for five years. Instead, we put all the money back into the system and they are now beginning to reap the fruit of their labour.
What will be the focus of MTNF this year?
For us, our focus remains education, health and economic empowerment. What we have also done in the Foundation is that we have introduced competition among the three major portfolios. We have also added a sort of special intervention portfolio which deals with pressing national issues and emergencies around flooding, displaced persons and other national interest interventions. We shall see smarter projects, greater benefits and better use of our resources in 2013.
Any new projects?
Most definitely. There are a lot of exciting projects that we are going to be starting very soon. I’m particularly excited about the Eyesight Restoration Intervention Scheme (EyeRIS). It’s an eyesight restoration project by the MTN Foundation. We have selected partners and we will be carrying out 12,000 cataract operations to be paid for by MTN Foundation. There will be both pre- and post-surgery support. We are working with six state governments and we hope this will be a very successful project.
MTN Nigeria Communications Limited has been honoured by the Consumer Protection Council (CPC) for its consistent efforts at improving customer experience on its network and for its corporate social responsibility initiatives.
In a statement the telco expalined that the award which was given at the maiden edition of the Nigeria Consumer Awards (NiCA) organised by the CPC, followed a very rigorous selection process which included electronic voting by members of the public, surveys and focus groups and painstaking collation and moderation of results by a panel of judges, which included representatives from the Standards Organisation of Nigeria (SON), CPC, the Nigerian Communications Commission (NCC) and other industry regulators.
MTN emerged winner in the categories of “NiCA Award for Service Excellence” in the Telecoms category and the “NiCA Award for Corporate Social Responsibility.”
Speaking on the awards, MTN Corporate Services Executive, Mr. Wale Goodluck, said, “Short-listing and eventual selection of MTN as the winner of the Award for Service Excellence in the telecoms category at the NiCA Awards marks a significant recognition and endorsement of our ongoing efforts to continue to improve the entire scope of service delivery to our esteemed customers despite the constraints of our operating environment.”
“The CSR Award, on the other hand, is another salient recognition of MTN’s efforts to selflessly give back to society in a sustainable manner through carefully designed projects with measurable long-term impact.”
He said the awards are a validation of MTN’s efforts at enriching the lives of the Nigerian consumer, adding that the company would continue to engage with its stakeholders to have a consistent view of their expectations and continue to work on exceeding them.
NiCA was instituted last year to recognise and honour worthy contributions by businesses, non-government organisations and individuals that play important roles in protecting consumers in Nigeria. The CPC also hopes that the NiCA will remain the highest award for service and product excellence in Nigeria.
Anambra State Governor, Peter Obi has commended Telecommunication giant, MTN, on its contribution towards the development of indigenous culture across the country.
Speaking at this year’s Ofala Nnewi Festival held recently at the Palace of HRH Igwe Dr K.O.N Orizu III, the governor noted that the value of any society lies in its rich cultural heritage, since no society exists without a culture.
“One of the reasons for the breakdown of laws and regulations is because of the lost of cultural values. A society that seeks to grow in values and morals maintains and celebrates its culture. This is what the people of Nnewi are doing with the Ofala Nnewi Festival and it is quite commendable to have a brand like MTN support the festival. This only shows its commitment towards identifying with the interest of the community where it operates,” Obi stated.
The Igwe of Nnewi also thanked the telecommunication company for its sponsorship in the last six years. “Over the years’ MTN through its contributions has elevated our Ofala Festival to a much higher level of attraction,” he remarked.
Expressing MTN’s commitment to the development and promotion of indigenous culture, Dan Nwankwo, the Regional Marketing Manager, South East stated that the “MTN is committed towards enriching the lives of its customers”.
“And how do we do this? By identifying and connecting to their passion points. Ofala Nnewi is one of the cultural heritages, that is, very dear to the good people of Nnewi. MTN sponsorship of the event is to enable Nnewi indigenes do more of what they love especially as regards the Ofala Nnewi festival. This is in line with our theme which is Talk more, Laugh more and Love more.”
The 49th annual Ofala Festival recorded a large turnout of top government officials within the state alongside highly placed industrialist in the state, among who include Dr Obinna Uzoh, CEO Gocuz Group.
Drop calls and general poor reception on mobile telephone will continue for a while, MTN Nigeria, the nation’s biggest telecom company said yesterday.
The MTN said its ambitious expansion work – for which the substantial part of its $1.3billion capital expenditure for this year has gone into – has been stalled by the massive flooding and general insecurity in the country.
MTN Corporate Service officials Akinwale Goodluck and Funmi Omogbenigun yesterday appealed for understanding from its subscribers.
They described the network modernisation and swap-out exercise being carried out as important so as to replace obsolete equipment with modern ones.
The MTN has the largest customer here in Nigeria with 43 million subscribers.
Goodluck said: “We regret, however, that the pace of work has been considerably challenged by the spate of insecurity coupled with the unprecedented flooding being experienced in many parts of the country,” he said.
He added that the network optimisation programme will affect over 4,000 base stations out of its over 10, 000 across the country.
According to Goodluck, ‘The task that we are undertaking is tantamount to building a new network .We are seeking to replicate what we achieved over a six-year period in nine months,” he said, lamenting that in several communities, the base transmission stations (BTS) of the firm were submerged, a development that will inevitably affect service qaulity in the affected areas as subscribers across the network will find making and receiving calls difficult.
“Several swap-outs have reached very advanced stages of completion. The entire network modernisation process is a very logistic-intensive one and the problem of insecurity has seriously affected the pace of work in some parts of the country,” he added.
According to him, insecurity has compounded the problem in at least 13 states, lamenting that flooding has created additional logistic impediments such that the pace of the ongoing network modernisation efforts has slowed down.
Acknowledging the fact that the telco’s customers have been experiencing some disruption over the last few weeks, he thanked them for their patience. “We sincerely express our thanks to our customers for their patience. We sincerely appreciate the enthusiastic support which our engineering teams continue to receive from different communities in many parts of the country,” Goodluck said, adding that such support is often a much-needed tonic in the face of the enormous logistic-challenges the project regularly encounters. He pledged that MTN would stick to its original plan of carrying out the network procedures only at night, in order to minimise disruptions to services and assured that MTN is doing everything possible, including doubling its work teams, to complete the project as quickly as possible.
“MTN’s current network modernisation and swap-out exercise which began in July is expected to cover the entire country and was originally expected to span a period of nine months. Its objectives are to considerably enhance capacity on the MTN Network and improve service quality. Under the project, which is being implemented by a combined team of MTN engineers and technical partners that include Ericsson, Huawei and ZTE, key network components are being swapped with the latest upgrades in the industry. In addition, current power systems are being replaced with hybrid power systems which are more environment-friendly.
“It’s a massive investment we are making to boost not only the quality of telephone services, but also to enhance the back-end information and communication technology support which we provide for banking and financial services, the oil industry and several other industries across Nigeria,” he said.
Telecom services provider, MTN has appealed for understanding from its customers and other key stakeholders as it continues its Network Modernization and swap-out exercise.
The company’s Corporate Services Executive, Mr. Wale Goodluck at a press briefing on Tuesday in Lagos said the various activities related to MTN’s Network Modernization are progressing steadily. but noted that it was being affected by recent flood nationwide and insecurity.
“We regret, however, that the pace of work has been considerably challenged by the spate of insecurity coupled with the unprecedented flooding being experienced in many parts of the country,” Goodluck stated.
The network optimization exercise will affect over 4,000 base stations out of over 10, 000 across the country.
According to Goodluck “the task that we are undertaking is tantamount to building a new network .We are seeking to replicate what we achieved over a six year period in nine months”.
He explained that considerable progress has been recorded with regards to the ongoing network improvement plans adding that several swap-outs have reached very advanced stages of completion.
“The entire network modernization process is a very logistic-intensive one and the problem of insecurity has seriously affected the pace of work in some parts of the country.”
In at least 13 states, Goodluck added that flooding has created additional logistic impediments such that the pace of the ongoing network modernization efforts has slowed down.
While acknowledging that MTN’s customers have been experiencing some disruption over the last few weeks, the Corporate Service Executive said as much as possible, the company would stick to its original plan of carrying out the network procedures only at night, in order to minimize disruptions to services.
MTN’s current network modernization and swap-out exercise which began in July 2012 is expected to cover the entire country and was originally expected to span a period of nine months.
Its objectives are to considerably enhance capacity on the MTN Network and improve service quality. Under the project, which is being implemented by a combined team of MTN engineers and technical partners that include Ericsson, Huawei and ZTE, key network components are being swapped with the latest upgrades in the industry. Current power systems are also being replaced with hybrid power systems which are more environment-friendly.
A United States court has delayed ruling on a $4.2 billion suit by Turkish mobile operator Turkcell against South African rival MTN Group, pending a Supreme Court decision on a separate case, the two companies said.
Reuters says Turkey’s largest cell phone operator sued MTN in a U.S. federal court in March, alleging the Johannesburg-based company used bribery and attempted trafficking of political influence to win a mobile licence in Iran that was first awarded to Turkcell.
MTN has asked for the case to be dismissed, saying the suit has no legal merit and a U.S. court does not have jurisdiction over the case.
The court has put the suit on hold, the two companies said in separate statements late on Friday, to await a Supreme Court decision on a different case using the Alien Tort Statute – the human rights law on which Turkcell’s suit is based.
This month the U.S. Supreme Court heard oral arguments in Kiobel vs Royal Dutch Shell, a high-profile case where 12 Nigerians accuse the Anglo-Dutch oil company of complicity in human rights abuses in the country.
The Supreme Court will decide in the Kiobel case whether the Alien Tort Statute – an 18th century law that has usually been reserved for human rights abuses – can be used to sue foreign corporations in U.S. courts.
Whether or not the Turkcell can proceed in its U.S. lawsuit is likely to be dependent on the ruling in the Kiobel case, legal experts have said.
MTN Nigeria has launched Nano-sim card for iPhone 5 to explore stakes in expected subscriber uptake of the iPhone 5 introduced recently into the handset and device market by US technology company, Apple.
Nano-SIM is the fourth generation of Subscriber Identity Module (SIM) card that has been used since the introduction of GSM phones in the early 1990s. The first three are the 1FF, Micro SIM or 2FF, and the Mini SIM or the 3FF.
The Nano-SIM, which is the only SIM compatible with the newly released Apple iPhone 5 and other new generation and future phones, has no different functions with the Micro and Mini SIM cards except the size.
Unveiling the new SIM, MTN Nigeria said: “The Nano-SIM is 40% smaller than micro SIM and about 0.67mm thicker than Micro SIM made for the new iPhone 5 and other new generation phones.” It added that the Nano-SIM is available at MTN Walk-in Centres nationwide.
According to PC Advisor, “This new nano-SIM card measures just 12.3 x 8.8mm, and its thickness has also been reduced fractionally, from 0.76mm of the 1FF, 2FF and 3FF cards, to 0.67mm.”
The release of the new Nano-SIM by MTN will enable Nigerians purchase and use the newly released iPhone 5 in Nigeria.
SENEGALESE-AMERICAN recording artiste and business mogul, Akon, will be screened in a gripping interview as MTV Base and MTN are to round off a fascinating second season of youth empowerment series MTV Base Meets… with MTN.
MTV Base Meets Akon with MTN will premiere on terrestrial TV stations across Africa including: TV2 (Cameroon), Wednesday 26 September at 21:00; (Ghana), Thursday 27 September at 21:00; NTV (Uganda), Friday 28 September at 18:00; Muvi TV (Zambia), Friday 28 September at 17:00; STV (Nigeria), Sunday 30 September at 17:00. The episode will premiere on MTV Base (DStv Channel 322) on Wednesday 3 September 2012 at 20:30 CAT.
Akon met with MTV VJ Vanessa Mdee and five passionate young Africans from all over the continent on Rodeo Drive, Los Angeles, California in September 2012.
Among those lining up to meet with Akon were Zambian computer science student, Catherine Nkonjera (20), Rwandan commerce student, Marc Gwamaka (24), 20-year-old computer science student, Xolani Kunene from Swaziland, Ugandan economics student and music promoter, Kenneth Tamali (22) and South African designer, Annah Mabasa (26).
Among the topics discussed by Akon and the group are fame, ambition, education, how to find and develop your talent, cultural cross-over and the importance of fighting for what you believe in.