CdF innovation Dinner Neeraj de... · It has mobile licencesacross 21 countries in Africa and the...

Innovation challenges and opportunities in emerging markets

February 2011

©2009 Mobile Telephone Networks. All rights reserved.

Agenda

1. MTN Profile

2. MTN Innovation firsts

3. The need for Innovation

4. Current Innovation Projects in MTN

5. Innovation Opportunities

6. Innovation Challenges


MTN Profile and geographic footprint

Launched in 1994, the MTN Group Limited (MTN Group) is a multinational telecommunications group

offering cellular network access and business solutions.

It has mobile licences across 21 countries in Africa and the Middle East and as at the end of Sep 2010,

recorded more than 134 million subscribers.

MTN Group operates in three regions:South and East Africa (SEA): MTN South Africa, MTN Swaziland, MTN Zambia, MTN Uganda, MTN Rwanda and Mascom Botswana.MTN Business: SA,Kenya,Zambia,Botswana,Namibia

West and Central Africa (WECA): MTN Nigeria, MTN Cameroon,MTN Congo-Brazzaville, MTN Côte d’Ivoire, MTN Benin, MTN Ghana, MTN Guinea-Bissau, MTN Guinea Conakry and Lonestar Liberia.

Middle East and North Africa (MENA): MTN Irancell, MTN Afghanistan, MTN Cyprus, MTN Sudan, MTN Syria and MTN Yemen.


MTN Innovation firsts

Prepaid in SA

•MTN Customers can enjoy cellular services without entering into a contract or undergoing credit checks

GSM Payphones

•Cellular based payphone that supports voice , fax and data

SMS Chat

•Allows several people to communicate concurrently using SMS

Fax Mail

•Allows Users to receive and store faxes on their phone and later download to a fax machine

MTN Zone

Dynamic tarriff discounting


Convergence

Convergence is happening in multiple forms

Industry convergence

( IT, Telecom, media)

Voice and data

(e.g. voice comms. in IP data networks)

Terminal and device (iPad, smart

phones, MP3 players, cameras, PDAs, PC’s)

IP Convergence (voice, video, data, and images over a single network)

Digital convergence

(media and information in digital

format)

Network Convergence (fixed and

mobile) Services and

applications (combining app types together)

Convergence

5


2nd Battle for convergence

Watch

Internet

Computers

Banking

Gaming

Music

BroadcastPrint

Credit

Mobile

Mapping

Telecoms

Advertising

Camera

The aggregate value of all these industries in 2009: 5 Trillion dollars


Radical Consumer empowerment


Cross-Industries Attack

Apple, Google & Social Media players are after advertising and premium services revenue and putting network revenues under pressure

VoiceNetwork

ConnectivityMedia

AggregatorsContent

DistributionApplicationProvider

Device Manufacturer

Community Messaging

AndroidMobileMarketGoogleTalk, Gmail, SMS

Music Store OviOviMNO Ovi Chat

Publisher & UGC

AppStoreiChat

MTNPlay

Core Business

Aspirations

noknokMobile Broadband, 3G

SkypePhoneIM Open APIs


Bit Pipe vs. Smart Pipe

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

Developers

APIs

+ Channels+ User Profile+ CRM data+ Presence + Charging+ Hosting Environment+ Location & movement

Mobile

Marketplace

Service Providers

Enterprise

Developers

Content Providers

= Bit Pipe

= Smart Pipe

End User

End User

Network

Network

Developers

APIs

Developers

APIs


Cloud Computing - The re-born of the 90’s ASP business concept

Security services/skills (on top of network quality) will be key to enable the growth of cloud computing services

Key issues in the Cloud Market

ASP – Application Service Provider

• Lower upfront investment

• Accelerated deployment

• Flexibility and scalability

• Focus on core business

• Security concerns

• Legacy IT investments

• “Internal” CIO resistance

• Software providers minimizing cannibalization

What may drive a fast expansion?

What may stop / slow down the growth?

Driven by more tangible drivers

Driven by more intangible drivers


Cloud Computing - Value chain players As key players enter the market in different places of the value chain, thecloud computing market is poised to be very competitive in the future

Hosting

Business model

Target

Main players

Enterprises and Government

SMEs

• Develop standard and tailor-made cloud computing solutions

• Deployment of public clouds for Cloud Service providers and private clouds for enterprises

• Integration with enterprise networks

• Management and hosting of private clouds for enterprise

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Infrastructure Platform/Software

Cloud Service Provision

• Offer end-to-end solutions based on cloud computing that allow companies to have reliable, scalable solutions with minimum upfront and complexity

Software Deployment

Cloud Service Enabler


Saas opportunity for SoHo/SMEs

• Opportunity for Companies to acquire the most current software “cheaply” with a faster implementation time.

• Secure , efficient business processes/workflow

• Service level improvements for SME to his Customers

• Subscription or PAYGO pricing options

• SME’s will capitalize on this trend to reduce capital risk which may result in better cash flows


Benefits of Cloud based SaaS

Increased DataRevenues

Opens up newsales channels

Competitive advantage

One stop shop

Reduce Churn

SaaS Grow Market Share & penetration in SMEs

Source : Adapted from ABI Research

13


• Financial services development significantly aids economic development

• Mobile networks facilitate reaching the unbanked and provide them with affordable banking services

M-money - Market opportunity Mobile money is a means to extend financial services beyond the banked population and contribute significantly to economic development of emerging markets

1.2-1.5

5.5-5.82.5-2.8

7.0

Mobile money Potential(people Bln, 2012)

Impact on GDP growth of emerging markets(increase in GDP growth if 10% increase in penetration)

0.8%

1.2%

>1.5%

Mobile Broadband Financial

Services

Mobile users

Mobile users1

4.0

Source: The Economist article published in October 2009, WCIS, Delta Partners Analysis 1 Accounts for distinct individuals with mobile phone, hence eliminating dual SIM effect


M-money - OptionsOne operator can provide different models of m-Money but M-Payments is the only one that truly enables to strengthen client relationship and generate revenue

Money Storage mechanism

M-remittances1 M-bank accountVirtual

Debit/Credit cardM-payments1

• Wallet provider • Wallet provider • Debit/credit card

• Bank account

• Bank account

A DCB

Description

• Transfer money nationally & internationally from your mobile wallet

• Pay for goods/services using a wallet stored & accessible via mobile phone

• Pay faster at POS terminals (eg: via NFC) by linking you mobile phone to your bank account/credit card

• Subscribe to a limited bank account accessible only via mobile phone

• Secure access to normal bank account

Opportunity for operator

Potential role

• Wallet• Distribution

• Wallet• Distribution • Distribution • Distribution

Customer relationship ownership • Medium/high • High • Limited • Limited

True differentiator1 Based on wallets


M-money – PlayersKey benefit for operators is in differentiation and distribution channel cost reduction

Rationale Competitive edge

• Generate revenues from mobile / online payments

• Cooperate with banks & operators to offer new services

• Financial services as well as technology know-how

Virtual payments/ transfer providers

• Increase customer loyalty & share of wallet of existing base

• Acquisition of new customers• Obtain savings in distribution

• Customer base• Distribution channel (emerg.

mkts.)• Contact interface with the client

Mobile operators

Examples

• Mobile as a channel to increase number of transactions – Drive the cash world into a cashless world

• Establish the strongest “switch” in a market

• Financial knowhow & established efficient and reliable processes

• Trust-worthy brand• Existing customer relations

Banks/ FS players

• Replicate in the mobile world the fixed Internet value chain (Revenue driven by advertising/affiliate marketing and payments (transforms operator into pipe)

• Online scale and mobile interfaces • Global trusted brands• Capability to offer better VP to

retailers (lower payment charges)

Internet players

• Strengthen device distribution –“block the access to the client”

• Become the airtime retailer of operators

• Existing customer trust / brand• Distribution network in emerging

markets

Handset hardware manufac-turers


Innovation Opportunities

• 100m customers unconnected to the internet

• 40m (partially) connected customers

• Very strong in Corporate Social Responsibility and Green

• Large market share and brand awareness

• Distribution - retail footprint and SIM card distribution

• Connectivity and data centre infrastructure

• Device manufacturer relationships

• SIM card with features

• Declining prices of smartphones & feature phones


Innovation challenges

• Low disposable income of customer base

• Low PC penetration and deployment of mobile broadband

• Segmentation and business intelligence

• Revenue dependent on small number of customers

• Spectrum licences and challenges

• Regulatory challenges

• Opex rising faster than Revenue

• Bank penetration & credit cards


Thank You

CdF innovation Dinner Neeraj de... · It has mobile licencesacross 21 countries in Africa and the...

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