South African mobile service provider MTN has been operating in Nigeria since 2001. While it has an established presence in the country, the company feels that there is still a lot of room for growth. MTN only has about a 50% market share in the telecommunications industry in Nigeria, and Khumo Shuenyane, MTN’s chief for strategy, mergers and acquisitions, feels that they can capitalise on this.
“We are obviously a very large player in Nigeria and we have pretty extensive coverage, but there is still scope to grow in a number of the rural areas in particular… and increase the growth potential in some of the urban areas as well. So our view is that there continues to be very significant growth potential. It is the largest market in Africa. It will very soon be the largest economy in Africa… I suspect. It’s definitely a very important market for us and one that we focus on very strongly,” he said in an interview with Business Day.
He also added that it will be a challenge, as there are no pre-made plans for growth. “It is probably the biggest lesson throughout our operations, which is that there isn’t a cut and paste (business model). There isn’t a South African model that you simply roll out across the rest of the operations. It’s very important to look at each of the countries on their own merits and apply ways of working that are specific to that country.”
MTN has also expanded into other African countries over the last couple of years, most notably Rwanda and Uganda, but Shuenyane was quick to add that East African nations such as Kenya and Tanzania are not targets for expansion.
“It has been more challenging to get into some of the other markets, so, obviously the key market in that region would be Kenya, followed by Tanzania. The issue with us is obviously we are in a regulated industry and it all comes down to whether there is a licence available and also whether one looks at the market and sees the potential to be a significant player, either number one or a strong number two”.
“Our view is that in Kenya clearly those positions are taken up. Safaricom is a very dominant operator in that market and there is a strong number two player. Similarly in Tanzania we have got some of the very biggest operators on the continent, outside of MTN, operating in that market so the scope for the opportunity to get in there and actually become a reasonably sized operator, is low. So we are not actively looking at opportunities in the other countries in East Africa at the moment, but as I say we are a very significant player in Uganda and in Rwanda,” he concluded.
Charlie Fripp – Consumer Tech editor