MTN Côte d’Ivoire: Mobile Operator in Côte d’Ivoire

Interview with Wim Vanhellenputte, Managing Director of MTN Côte d’Ivoire

Could you present to us the MTN Côte d’Ivoire company?

MTN CI is a local mobile phone operator. The South African group MTN bought the local mobile operator Telesales in 2005 and transformed it into what MTN Côte d’Ivoire is today.

This company started off as a mobile phone operator, but has been evolving ever since in different types of IT services such as the internet, fixed lines and mobile banking, to name a few. These new activities have transformed MTN Côte d’Ivoire into a global telecom player in Côte d’Ivoire.

Furthermore, MTN Côte d’Ivoire is a leader of the mobile market with about 40 % market share and is constantly developing new applications. At MTN Côte d’Ivoire, we believe that with our African vision and origins in South Africa, the company should contribute to the broader development of the countries where it operates, and this is the main reason why we keep on developing new applications and competing with other companies on the market.

The government’s ambition is to transform the country within the next 10 years into a knowledge-based economy. You are one of the players leading this transformation. Could you talk a bit about your innovation and what you are bringing into the market?

The government’s ambition is completely clear. Their plan is to bring Côte d’Ivoire back into the same state that it was in 15 years ago. It is evident that the 21st century’s focal point is information technologies, and just like every emerging world economy has gone through this cycle, Côte d’Ivoire needs to follow the same footsteps. In order to be within the same logic as all other emerging economies, we need telecom infrastructures just as much as we need roads, airports and harbors. However, the telecom infrastructures need to come first; only then can the rest follow.

MTN Côte d’Ivoire has invested in a submarine fiber-optic cable. It is going to be commercially launched in the next few months. We have deployed hundreds of kilometers of fiber-optic within Abidjan – the heart of the country – and we are also deploying a few thousand kilometers inside the country to make the internet accessible to a broader public. The country’s transformation into an emerging economy depends on the information technology which represents the access to the internet – a basic information technology of our era.

We share the same ambitions as the government and our goal is to make the internet widely available and affordable so that everybody can join the World Wide Web. By choosing this path, we believe Côte d’Ivoire will become an emerging economy in the 21st century.

How are you going to compete with internet services, when there is only one submarine cable limiting competition?

The cable you are referring to is called SAT 3 and MTN Côte d’Ivoire is now finalizing the investment of the deployment of the WAX cable. This cable goes all the way from Portugal down to the West African coast and will eventually end in South Africa.

It is clear enough that, since MTN Côte d’Ivoire as a group is present along that coast, it has to be participating in this consortium of telecom companies in the deployment of this fiber-optic submarine cable. Therefore, as mentioned earlier, the cable will be commercially launched and should allow us to lower the transmission prices which connect Côte d’Ivoire to the rest of the world. This launch will also allow the end user to have a better connectivity at a lower cost.

Apart from a submarine cable, MTN Côte d’Ivoire has a hundred thousand mobile broadband users in the biggest WiMax network within sub-Sahara Africa. As for the WAX cable, we applied the same model that was a success story for our mobile phone explosion that occurred a decade ago.

Today, we have launched pre-paid packages for our customers; they can use the MTN scratch cards air time and buy up to a month subscription to the internet. These applications have allowed us to have more than a hundred thousand users. Also, with the launching of the WAX cable and the 3G development, we expect the number of internet users to increase dramatically. This reality will help Côte d’Ivoire become the emerging economy that everyone wants to be part of.

Côte d’Ivoire’s market is a peculiar one. It has 20 million people and 15 million mobile subscribers. The fixed line compared to mobile is not extensively in use. There are 5 operators and 7 licenses. How do you structure your competitive strategy?

In order to survive in this type of market, one needs to invest. The 7 licenses were a little ambitious for the size and potential of this country. The market will eventually regulate itself and only a few strong players, who will offer the first class converged services, will remain in the game. MTN Côte d’Ivoire wants to remain as the leader within that space and this is the reason why we are regularly investing into our company.

In order to deliver the quality of service required, one needs to invest into the company. It all starts with the proper investments and strategies. Since we have purchased Telesales in 2005, we have not stopped investing into MTN Côte d’Ivoire.

We are continuously deploying new networks and we are now eagerly awaiting our 3G license so that we can deploy equipment for that new network. We focus on the continuation of what we have done for many years. We are a mobile phone operator evolving in the space of a global community. We are bringing fiber to larger offices of Abidjan so they can connect directly to whichever office needed in the rest of the world via a reliable fiber-optic connection.

Moreover, we are also developing systems in the banking area. Africa’s banking penetration is extremely low. Ten times more people have a mobile account than a banking account. The opportunity for mobile phone players to enter that banking space and offer mobile banking services is very attractive at the moment. We want our customers to use their mobile phones to transfer or cash out money.

We have just launched a very innovative project with the United Nations World Food Program. The World Food Program of Côte d’Ivoire has come to an agreement with the MTN. We are using 15 000 telephone lines to transfer a monthly allowance that WFP has made available for families which cannot afford to buy sufficient food. They are doing cash transfers using our mobile money services and 50 000 people in Côte d’Ivoire are going to benefit from this program for the next two months. They can recover the money in our mobile money cash out points. Altogether, it is about 75 US dollars a month that allows them to buy food for their family.

The agreement MTN Côte d’Ivoire has with WFP is one of the many innovations we do and it shows that we are trying to change lives. Adapting technologies to the local situation and local needs and making them available at a reasonable price to the population is what MTN Côte d’Ivoire is all about. MTN is African. It is present in 21 countries from Africa to the Middle East. Our objective is to make MTN a player who contributes to the development and the success of this continent.

What are your assessments of the telecom market in Côte d’Ivoire? Is financing a problem for you? If not, what are your biggest challenges?

We obtained the biggest syndicated loan ever issued in Côte d’Ivoire in 2009. We received a 150 million US dollars loan in the local currency with the consortium of several local banks, which made it easier for us to handle our debts and revenues. In the end, financing depends on the trust the banks or the investors have in your brand.

With this regard, MTN Côte d’Ivoire cannot complain. On the contrary, we have a proven tract record that the trust is there. It is actually the banks who come and visit us on a monthly basis and ask us if we need more money for investments into our company.

However, our main challenges revolve around the country’s security and the transparency policies. Foremost, all investors are looking for security. We went through a difficult period during the past months – from October 2010 to May 2011 – and anybody can assure you that, beyond anything else, security is the most important factor for a company to grow.

Since April 2011, Côte d’Ivoire is back in a secure environment that allows for foreign or domestic investments. It is important to note that if the country was not secured, even individuals with money would rather invest outside the country. Today, I can testify that Côte d’Ivoire belongs to the category of countries with a secure environment.

Furthermore, investors are always looking at transparent interactions, whether they are political or juridical. They need to be sure that the rules of the game will be applied, whether they are favorable to their company or not. Investors want to make sure that the investment codes and legislations are respected.

These two aspects, security and transparent policies, are in place in Côte d’Ivoire at the moment, and thus allow for massive investment in this beautiful country.

You claimed that instability is one of the major preoccupations for a company when connecting people. How do you stay involved in connecting people and crossing the bridges?

It is a known fact that the country has experienced trauma due to months of insecurity and short-term thinking. Back in this period, MTN Côte d’Ivoire would daily come up with new development ideas, but we did not have our mind set on long-term plans.

The population has proved to be extraordinarily strong. If you moved around Abidjan only few days after the war, you would not believe that here had been a serious unrest in the city. The ability of these people to get back on their feet is amazing. This strength and determination can be also found within the MTN Côte d’Ivoire staff.

It is a matter of perception and belief. You can look at the negative or the positive side of events. Is the cup half-full or half-empty? MTN Côte d’Ivoire strives to contribute in turning things and dreams into positive realities.

A few weeks after the war, we invested more than 1 million euro in corporate social responsibility programs. We donated food and mosquito nets to a wide range of NGO’s and they distributed them to the population. We showed to our nation, to our customers and to everyone else – inside and outside of the country – that we do care.

MTN Côte d’Ivoire wants to invest into the country and help its customers when they need it most. I am very proud that MTN Côte d’Ivoire has managed to act within that and that the feedback we have received from authorities and the wider population has been very positive. We have proven that we care and this is the most important goal we have set for our company.

Each year in June we organize yellow care days to which all the staff is invited – on a purely voluntarily basis – to participate in certain activities such as NGO’s, cleaning schools, fixing roofs, planting trees, sitting down with orphans and reading books to them.

Last week, we participated in a campaign in the biggest suburb of Abidjan, where 50 staff members were planting trees. We are all willing to contribute and share. These kinds of initiatives shift the balance between half-empty and half-full. I think the people understand and appreciate this. Once again, the strength and determination of these people will make Côte d’Ivoire a true success story.

The government is going to award the 3G license at the end of the year. What do you expect from this and are you planning to bid for this license?

We are interested in the 3G license. It is one of the things that have been a setback in the development of the telecom or the ICT industry in Côte d’Ivoire for the past 3 years. We definitely need it in order to be able to offer this massive internet access to the population. We do have a WiMAX network, as mentioned earlier, but it is not enough to offer the internet to millions of subscribers. We have a hundred thousand subscribers but, if we want 15 million – all our mobile users, we need the 3G network to make this happen.

We are working with the authorities to see if, when and under what condition we can invest. We definitely want that license. We would like to lift up the telecom industry from the 2G network in which we have been stagnating a bit. We will continue with our pre-paid model and hope to invest into pre-paid content and access. Having an access to international content is one thing, but we also want to focus on local content.

In Nigeria, we have a massive industry of local content such as movies and this is also starting in Côte d’Ivoire. We do have small movies that are gaining popularity. In a couple of years, local content will be the success of the internet in Côte d’Ivoire. Our goal is to stimulate all local initiatives that will automatically pop up as the internet industry is developing. We are aiming for the same effect as when the mobile phone voice revolutionized Africa 10 years ago. The internet will have that effect.

Can you summarize your strategy in terms of your plans for the next 3 years?

Growth has to come out from innovation. As you have noted, we have at present 15 million mobile subscribers which stands for 70% penetration into this market. However, the growth from the voice only is flattening out.

Everyone can confirm that we are limited by demographics. If a company wants to continue growing, it needs new applications. We need to get the internet expansion and attack the mobile money applications; these can help to promote MTN Côte d’Ivoire’s growth in the long-term. We might not be able to get the 30% annual growth that we have continuously achieved in the past 10 years.

Yet there is still a very positive growth in terms of revenues and profitability because they will support the arrival of new applications. The ICT industry can support the development of a lot of small and medium enterprises which need reliable access to the internet, additional services and security services. They also need a possibility to possess a cheap accounting system. These enterprises cannot invest in big servers. When we glance at our neighbors – China, Taiwan or India –, we realize that we can make thing happen, too! MTN Côte d’Ivoire’s core value is ”Can Do!” and we will do that, because we know we can.