After years of multi-billion fines, regulatory uncertainties, and economic volatility MTN is embarking on a new adventure outside of its core business: – telecommunications.
“We are moving from a telecom company to a techCo (technology company)’” Joshua Chijioke Henry, head of business development, for Chenosis a big data company by MTN, told TechCabal.
That sentence has become a song every executive in MTN knows by heart. It has also spurred the company’s increasing focus on the growth of its existing verticals such as MoMo, a fintech unit valued at over $5 billion; Ayoba, a chat platform rivaling WhatsApp that will soon be turned into a super app; and Bayobab, a fibre-cable-facing unit.
The transition is inevitable for the company whose growth in the telecom industry in Nigeria, its largest market on the continent by subscriber count, seems to have reached a stage where it is no longer growing at a fast pace and is starting to decline.
The company’s subscriber base has struggled with growth since it reached a peak of 92.7 million subscribers in February 2023. The latest report by the Nigerian Communications Commission (NCC) shows that the telco’s subscriber count dropped to 81.7 million in March 2024.
MTN’s revenue has also been pummelled by financial headwinds in Nigeria where 28-year-high inflation has subscribers making unplanned survival choices while the cost of business operations hit an all-time high. Several startups have closed shop and many foreign nationals have packed up and left the country.
However, the burden of making MTN’s ambition to become a tech company a reality mostly rests on Chenosis, a startup MTN launched in Nigeria in September 2023 as a marketplace where developers within the continent can build technology solutions and infrastructures, and APIs without spending dollars on foreign alternatives.
Beyond the marketplace, the primary responsibility of Chenosis is to harness the massive data MTN has accumulated over 25 years of doing telecom business in Africa and build innovations by analysing the data.
MTN houses the data of about 300 million active subscribers across the African continent which includes 80 million active users in Nigeria who make calls, send SMS, browse, do airtime, and MoMo transactions. Chenosis studies the data points to identify behavioural patterns which could spur a new company or new line of products from the MTN family.
“Chenosis was born out of the strategy to build the largest data platform within the continent,” Joshua Chijioke Henry said.
Although it is less than one year in the market, Chenosis has key products like APIs, the low-code and no-code platforms that allow companies to design and develop apps using intuitive drag-and-drop tools that reduce or eliminate the need for traditional developers who write codes. There are two categories of APIs on Chenosis including MTN’s API and third-party APIs which allows companies to integrate their API with MTN’s open API. MultiChoice, a satellite television service provider, currently consumes a third-party API solution on the platform. There is also a partnership with Impression AI where Chenosis gives technology businesses the ability to get signature of customers using USSD codes.
While Chenosis is not thinking of building a generative AI tool with the trove of data at its disposal, according to Henry, there are many other activities it is using the big data MTN has to do. One of them is credit scoring for the financially excluded. How it does this is to study their spending pattern, especially with airtime, since most of them use feature phones.
“MTN can capture certain things about the customer like where they live, how much airtime they purchase, we know whether people bought airtime for the customer or the customer is the one doing the buying, with that data we can say for sure what her credit score would look like,” he said.
Karl Toriola, the company’s CEO in Nigeria, is the champion of the techCo transition and is pulling all the stops to ensure that the vision is achieved.
During an interview with Tomiwa Aladekomo, CEO of TechCabal on Arise TV in February, Toriola explained that to transform the company from a telco to a technology or digital company takes “a total transformation in DNA.”.
“It is a huge transformation in terms of the personality of MTN. When a company is large and successful, the primary focus for shareholders and people who govern those businesses is protecting that revenue base. At times you transform yourself so radically you almost have to destroy your old identity and recreate a new one,” Toriola said.
While Chenosis is up its neck in data, MTN also has another unit called the MTN Group Tech, which is specifically focused on exploring opportunities in artificial intelligence.
The companies that will be born from the transition will be funded by MTN. Nevertheless, MTN acknowledges that external funding is required if the transition project is to scale. Currently, MTN’s telecom business doesn’t make enough money to support its ambitious growth plans.
“It is one step at a time,” Henry said, indicating the company would address the issue of additional funding when it gets there.
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Copyright for syndicated content belongs to the linked Source : TechCabal – https://techcabal.com/2024/07/04/inside-mtn-race-to-become-a-techco/