South Africa
Karel Pienaar
Agenda
2
•
Overview of South Africa market landscape•
MTN SA strategic intent for Full Service ICT Sector•
Key Technology overview on enabling the Full ICT strategic intent• Network Investments and Broadband Enablement
3
Competition has enabled a dynamic market
•
Electronic
Communications
Act (ECA)
•
Neotel licensed
•
ECA implementation
•
Altech Court Case
•
Growth of investment
in infrastruture
•
New infrastruture
providers / investors
•
Emergence of new
business models
•
Growing competition
•
More choice - expansion of
products and services
•
Downward pricing pressure
•
Alternative business models
enabled
4
Changes and new players in the SA telecoms
industry
Mobile Operators and new adjacent players ISP Data Centre, Tower and Fibre PlayersOther VANS
Players in the ISP & Business Space
Other Broadband Players
5
Africa analysis view
Key Challenges
•
Increasingly competitive market•
Regulatory intervention•
Manage in a mature market•
Manage convergence and service integration (fixed, mobile and data) Key Challenges•
Manage business in a maturing market•
Marginally declining ARPU•
Manage convergence and service integration (fixed, mobile and data)•
Manage customer quality, maintain service and network qualityKey Opportunities
•
Defend / Grow customer base•
Differentiate within target market segments•
Deployment of infrastructure•
Bundled services Key Opportunities•
Market growth (dual SIM ownership distortion)•
Maintain mobile voice revenue•
Data and VAS servicesMobile Market
Fixed Market
Increased competition with increased focus
6
Africa analysis view
Broadband
0 400 800 1200 1600 2000 0 10 20 30 40 Mobil e Fixed Key Challenges•
Increasingly competitive environment (services and new infrastructure)•
Product differentiation•
Manage wholesale / retail markets•
Fixed differentiation from the mobile broadband offeringKey Opportunities
•
Differentiation of bundled offering•
Bandwidth-intensive applications hence specific event tariffs•
Alternative broadband infrastructure (e.g. rollout of LTE) (but spectrum dependent)•
Speed /QoS linked offers with fair usageDifferent trends are driving the fixed and mobile broadband markets. The uncapped fixed
product is changing the roles of service providers where as mobile broadband pricing strategies remains key
Mobile Market
Fixed Market
Source: SA Telecoms Model 3.0, Africa Analysis
Mobile surpasses fixed growth
7
Smartphone forecast 2010 - 2016
•
Smartphones are expected to grow to 19.6 million in SA by 2016•
Proportion of handset models which are considered smartphones will continue to increase•
A smartphone is defined as a mobile phone which can install 3rd party nativeapplications (not Java apps).
•
Base figures are obtained by looking at the annual reports of service providers, as well as user data from BMI-T publications.•
Future growth rates are estimated by looking at recent growth rates, global smartphone forecast, other BMI-T forecasts and the technology product lifecycle•
3 million smartphones currently on MTN network 4,751,071 7,531,154 10,167,058 12,810,493 15,244,487 17,683,605 19,628,802 56% 35% 26% 19% 16% 11% 0% 10% 20% 30% 40% 50% 60% 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 2010 2011 2012 2013 2014 2015 2016 Smartphones Growth Source – BMI-T8
Tablet forecast 2010 - 2016
•
Tablets are expected to reach 1.7 million in SA by 2016•
Bundling with data contracts will make tablets more affordable•
Ultra cheap models will also accelerate growth into the market•
A tablet is defined as a touch screencomputer, which runs an operating system other than Windows, and has a size of more than 5 inches
•
Base figures have been estimated based on smartphone penetrations, and theration between smartphones and tablets in the market
•
Future growth rates are estimated by looking at recent growth rates, global smartphone forecast, other BMI-T forecasts and the technology product lifecycle•
MTN tablets – currently 21 859 34,000 189,040 446,134 731,660 1,038,958 1,412,983 1,709,709 456% 136% 64% 42% 36% 21% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500% 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2010 2011 2012 2013 2014 2015 2016 Tablets Growth Source – BMI-TMTN’s vision on broadband
Everywhere You Go
9
•
Broadband connectivity will be a catalyst for socio-economic development and willenhance South Africa’s global competitiveness
•
Bringing Mobility and High Speed internet access•
Bridging the Digital Divide – bringing broadband to the rural/under-served areas•
Supporting education, socio economic upliftment and innovation•
Enabling MTN’s customers to access information, entertainment, applications and services with much more richness and computing capacity10
Content delivery embracing South Africa
11
Driving the consumption of data
Applications Mobile Social
Networking Mobile Multimedia
Enhanced Location Awareness
To become the Leading ICT Service Provider in our market
by being indispensable to our Customer Segments
(Consumer, SME and Corporate) and Partners
12
MTN SA strategic intent for full service
Africa analysis view
13
In becoming a Full ICT Service Provider for Consumer, SME and Corporate MTN will focus on complimenting its mobile and fixed offerings with the “Growth Zone” and expanding into fixed voice and extended value chain
Future Growth Areas Current Revenue Sources Low High Low High Importance Im p or tan ce
Expansion into fixed line / fixed data and IT Services through :
MPLS networks
Data center investment
Cloud Computing Services Business Model
SaaS
Fibre
LTE
Driving converged offerings (mobile voice, mobile data, fixed data and fixed voice and services )
Delta Partners view
14
Needs to deploy both a selective fixed play and offer mobile driven convergent services
• Advertising Play
• Media/content Play (Music, LBS)
• Consumer gateway (“Portals”, SN) • Network as a Service
• M-payments Play
• M2M & Mobility Solutions • Conferencing – VoIP, Email
• IT Services (For selective Bespoke) • LAN (for end-to-end SLAs)
• Conferencing – HQ Image • Cloud Saas, Iaas
• Data Center & Security services • Fixed Connectivity
• Mobile Data Network quality (3G, HSDPA++, LTE) Infotainment (smartdevice and feature phone) “Mobile ICT” (Smartdevices driven) “Fixed ICT” (PC driven, fixed line or dongle HSDPA+, LTE) Pipe (Low cost) Smart Pipe Consumer Consumer Gateway Business Strategic Options •Multiple services
to hook the High Value Clients •Some M2M and mobility solutions require HSDPA+, LTE •Battle ground of Google, Apple, SNs •Requires local content and partnerships with key global players
•Requires fixed connectivity, or HSDPA+, LTE •Leverage Network Assets •Enables base to develop platforms for Mobile ICT
Recommended Option CORE Mobile
Rationale
Being indispensible to our customers
15
•
Service consistency is central to service satisfaction.•
Customer expectations have also increased and they expect more value from aservice interaction with a company. The consumer base of South Africa is becoming like minded with regard to their service expectations.
•
Accolades such as the recent Ask Afrika Orange Index® survey in theTelecommunication as the best Telecommunications Provider and the best Internet Service Provider in the country
•
2010 Africa.Com : MTN won two categories - Best Network Improvement•
MTN’s Brand strength - MTN has invested in the growth of the brand and its recognition in the country and the continent’s most valued brand reflects thisinvestment -Brandirectory (Feb 2011) and Brand Africa (Sept 2011) - MTN as most valuable on continent
•
Sunday Times Top Brands Survey (Aug 2011) - Best Telecoms Service Provider in the Consumer Category16
Evolution to date
2G
(98% population coverage) GPRS 114Kbps (2002 onwards) EDGE 240Kbps (2003 onwards)3G
(
55% population coverage) R99 384Kbps (2005 onwards) HSPA 1.8-14.4Mbps (2008 onwards) HSPA+ 21-42Mbps (2010 onwards)LTE
(
100+ pilot sites)LTE
73Mbps- 10MHz (2X2)
17
Spectrum re-farming – 900 MHz & 1800 MHz
10 MHz 1800 re-farming for LTE
•
Device eco-system exists•
Coverage•
Multi Standard Radio5 MHz 900 re-farming for UMTS
•
UMTS900 rural data volume out growing GSM data on live sites● Higher Current Spectrum re-use & Modulation efficiency
18
MTN LTE sites approach
Planning for the Future....
•
4 LTE clusters are being piloted in Gauteng•
These clusters comprise of 100+ LTE sites•
Ericsson and Huawei equipment being used for the Pilot•
Aim is to trial the LTE technology & understand its benefits/deployment•
Provide select users the ability to experience the latest mobile broadband technology•
Challenges with full LTE deployment• LTE Trial on 1800 MHz spectrum using a 10 MHz carrier (FDD)
• Limitation exists with regards to higher speeds and capacity due to insufficient spectrum
• Deployment is limited to small areas where 1800 MHz can be refarmed – actively pursuing
partnerships in 1800 Mz band
• Access to 2600 MHz and 800 MHz is critical to ensure that future capacity needs are met and full potential of LTE being reached
19
LTE – network tests
20
HD streams- LTE
21
Long term fibre rollout
National
•
Coverage Area:•
Bloemfontein• Bloemfontein City Centre
•
Port Elizabeth • Uitenhage • East London•
Kwazulu Natal • Amanzimtoti • Ballito New Sites:•
~1840 till 2014 ~ 900 target for 2012 Vendors•
MTN – Metro build & Leveraging NLD, DFA, i3, COJFibre Km (incl. MTN, i3 & DFA)
22
New switch centres (Hubs) to enable hosting and
cloud computing solutions
•
Centres situated across South Africa with plans to connect then to the National Backhaul23
ICT conceptual view
Communications CAAS Software Or ch estr ati o n an d Pr o v isi o n in g Infrastructure Platform Service Catalogue S ecu ri ty Go ve rn an ce Partners IAAS PAAS SAAS Development Community M an age me n t Customers Storage Database Disaster
Recovery Virtualisation Servers
Network Backup
Middleware DevelopmentTools Operating Systems
MTN SERVICES
Call Center
Mobility Connectivity Bandwidth
Internal
Applications ApplicationsCloud
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Service catalogue examples
Productivity Communication Customer Mgt Enterprise Resource Planning Finance Security OA Collaboration
Portal ManagementDocument DesignerProcess
IP Telephony CommsUnified
CRM DesignerReport Subscriber Analytics
SAP Oracle Payroll HR
Accounting Firewall Backup Desktop Email Procuremen t Logistics Sales Force Applications
25
Cloud capability differentiators
Devices
Banking and payments Telecoms
Mobility
Data Center Hosting On site technical support
Networking Reporting Auditing SLA Management Monitoring Service Desk Security
MTNSA
3
rdParty
Service
Offerings
Eg. Health, insurance, education, finance, CRM, ERP, Collaboration etc…Bundled
Service
Offerings
Eg. Hosted PBX with SIM,s, devices, laptops, printers, CRM ‘lite’, CollaborationMTN Service
Offerings
Eg. Virtual servers, storage, backup, application, platform, other white-labeled services
Corporate
SME
Consumer
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Mobile ICT ecosystem
G e a r i n g t h e O r g a n i s a t i o n
Consolidated Self-service
Convergent Charging Platform
M2M Offerings
• Datazone for off peak rates
• Improve APN service Offering • M2M Policy control
M2M
Mobile Payments
• App Stores, micro payments • NFC • STD BankM Commerce
Hosted Mobile
• HPBX • Mi-Cloud • Cloud ComputingCloud
Network as a
Service
• One API compliant network API’s • Developer Support • SDPNaaS
27
Long term approach supported by focus on
sustainability
•
Establish national networks to penetrate deeper into individual markets.•
Invest in fibre networks and international submarine cable connectivity•
Key focus on quality service delivery and driving of efficiencies•
Strong corporate social investment - app 1% of profit (e.g. 1GOAL initiative, 13 MTN Foundations)•
Drive for sustainability (Carbon footprint ) through innovation sustainable solutions (e.g. Tri-Gen Plant)Notice
The information contained in this document has not been verified independently. No representation or warranty express or implied is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Opinions and forward looking statements expressed
represent those of the Company at the time. Undue reliance should not be placed on such statements and opinions because by nature, they are subjective to known and unknown risk and uncertainties and can be affected by other factors that could cause actual results and Company plans and objectives to differ materially from those
expressed or implied in the forward looking statements.
Neither the Company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (based on negligence or otherwise) for any loss
howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation and do not undertake to publicly update or revise any of its opinions or forward looking statements whether to reflect new information or future events or circumstances otherwise.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
